Small Business Owners Meeting Payrolls Out of Own Pockets
CHETRY: Forty-four minutes past the hour. Well, some of Wall Street's richest were getting paid handsomely for their failures. A lot of small business owners are making huge sacrifices even though their companies are succeeding, cutting their own salaries so that they could keep others on payroll. Our Carol Costello has been looking into this story. She's live in Washington this morning and a lot of, you know, even our producers who know people in small business or have families in small business say this is what happens when times get tough, they're the ones that are cut.</s>CAROL COSTELLO, CNN CORRESPONDENT: I know, they're cutting their own salaries, the owners of the small businesses, all in an effort not to lay off their employees. You know, when I asked them about these big bonuses for Wall Street executives, most of them said they can't even comprehend what's happening on Wall Street. They're just trying to stay afloat.</s>COSTELLO (voice-over): Forget about a big fat check from Uncle Sam. Here survival means the bailout of a different kind. For Accutech's photo machining it means owner Paul Gemellaro is cutting his pay in half from $75,000 to less than $40k. All so can he pay his employees.</s>PAUL GEMELLARO, CEO, ACCUTECH PHOTO MACHINING: Well there is no credit available for us. You know, the bills keep piling up and a lot of people at work here are my friends. But that makes it more difficult but you know, they're loyal to me and you know they helped me through the tough times so I have to return the loyalty.</s>COSTELLO: His employees are not just thankful, but willing to work even harder.</s>MIKE MURRAY, PRES. ACCUTECH PHOTO MACHINING: It's amazing. I don't know anybody else really who would do that, because you know, you have your own responsibilities for your own family and it's very difficult to go from making money to making nothing.</s>COSTELLO: Gemellaro isn't alone in his generosity. According to a December study done by office supply retailer Staples, 50 percent of small business owners have cut their own salaries to avoid layoffs. Meg Hagele...</s>MEG HAGELE, OWNER, HIGH POINT CAFE: Right, right, right.</s>COSTELLO: ... who owns High Point Cafe hasn't paid herself since December and says she's dipped into her own savings to pay her staff.</s>HAGELE: I take huge responsibility for the fact that I have 15 people who depend on me for their living. And that is something that I take very seriously and I think that's what's missing in large business.</s>COSTELLO: Experts say small business owners have little choice. They don't have much fat to trim.</s>JOHN CHALLENDER, CHALLENGER, GRAY AND CHRISTMAS: Small business owners really get to know each and every one of their employees. They live with them and work with them. So it's much different than a big business, where everybody is more anonymous, certainly as you get past say a particular department.</s>HAGELE: Here you go, sweetheart.</s>COSTELLO: Of course, both Hagele and Gemellaro would like some government help but both say they would never accept a bailout. What do they want? For the banks to start lending again so they can make payroll and still manage to bring home a paycheck.</s>COSTELLO: There's the $64,000 question, Kiran. I mean, how do you get the banks to start lending money again? The Obama administration is wrestling with that, says it has a substantial program and to place and get the banks loaning money again but it hasn't quite happened yet.</s>CHETRY: Oh, and the woman you featured, Meg was her name. How is she paying here bills?</s>COSTELLO: She's dipping into her savings. She's dipping into her retirement accounts just so she can pay her employees. She's just like remaining above water. You know, when times were good she opened up a second shop and that's struggling, too. So she's in quite a bind.</s>CHETRY: Hopefully things will turn around soon and the credit markets will loosen. Fingers crossed. They're doing a good thing though. Carol, thanks for highlighting that for us.</s>COSTELLO: Sure.</s>ROBERTS: It's 48 minutes now after the hour. And here are some of the big stories that we're working on for you in the next 15 minutes. Man versus water. Thousands of people bracing for what could be catastrophic flooding in the Dakotas. The amazing effort to hold back the forces of nature. And the president with some frank talk about the topic of race, why he says pride about being the first African-American president lasted only a day.