Category: The View From Your Recession

A reader writes:

I live in San Jose and our traffic, although not as bad as Los Angeles, has always been bad. Lately I've noticed that the commute has gotten a lot easier. I was initially happy about that until I realized that the reason that the drive has gotten easier is because there are fewer cars on the road. With an unemployment rate approaching 10%, that's the difference between traffic jams and smooth transits. So now, whenever I get to work on time without having to sit through stop and go traffic, I find myself reflecting on the grim nature of this particular silver lining.

A reader writes:

While running a work errand that I hate doing, I saw a line of 60+ people lined up around the block in Los Angeles on Ventura Blvd in the middle of the day. I also saw a TV camera and a photographer. LA being LA, I figured it was a line of people auditioning for a reality show of some kind. Turns out everyone was waiting for the opportunity to apply for a server position at a local chain restaurant. As much as I hated the errand I was on, and the job I have, I valued it a lot more at that moment.

A reader writes:

Holla! I'm from Santa Maria myself and everything your reader says is completely true. My mother bought her present home — a 4-bedroom, 2000 sq. ft. house — for $125,000 in 1988, at the tail end of the housing glut of the late '80s. It was "worth" $550,000 at the height of the market in 2005, and now currently "worth" about $350,000, according to Zillow.com.

To my eye, the horrible death of the housing boom is actually a Market Correction, and a badly-needed one. For much of the middle 2000s, we on the Central Coast lamented how cops and firefighters in Santa Barbara, couldn't actually afford to live there; they lived in Santa Maria, commuting 70+ miles each way. Now people can afford to get into the market again, because prices are returning to meaningful levels from their delirious highs.

A reader writes:

The view from my recession is grim. I am an executive recruiter in the construction industry. In recent years I have placed Presidents, CFOs and other senior managers with some of the largest commercial/industrial contractors in the country. I take pride in my work and my company's superb reputation in our industry. But lately things have changed around here; the party's over.

We have experienced dramatic growth over the last ten years, even accounting for the setback caused by 9/11. But last summer the wave crested. In October, ten percent of our company was laid off. And last week our President announced that more layoffs were coming for those who weren't producing enough. This is kind of amazing when you consider that we all work on 100% commission.

But they are making a business decision to protect the core of their company: top recruiters who are proven producers year after year. For example, a VP here who billed nearly a million dollars in south Florida alone for the past few years, during the residential boom, can't even set an interview there anymore.  Like many of his clients and candidates alike, he has pulled up stakes and moved to a region with better prospects.

Many recruiters at my company will ultimately leave before they get laid off, to go work a salaried job with a guaranteed paycheck. We are in fairly uncharted territory here, and most projections indicate that the tide won't start to turn until this fall at the earliest. Many of our best clients, companies doing hundreds of millions of dollars in annual volume, have issued a hiring freeze for the foreseeable future. Privately funded projects slated to begin soon–casinos, hotels, shopping malls–can't start up until the credit market thaws and banks start lending again. Construction is a great engine of the American economy, and that engine will continue to idle until we get it back into gear.

Markets hit hardest by the housing crisis, such as Vegas, Phoenix or the south Florida region, will take years to get back to normal. And in that time many more small and mid-size contractors will move away or simply shut their doors. The only silver lining I can see is that most of our competitors in the executive search industry won't be able to weather this storm either!

As for me, I have my limit too. At some point, if I can't make a decent living anymore, I'll unplug the headset and go travel the world. I hear places like Ireland and Iceland are affordable this time of year.

A reader writes:

In Santa Maria, a modest little community of 130,000 on the central coast of California, the surnames of the seller and buyer of every property in the area are listed in the Sunday real estate section of our local newspaper.  Most of the sellers are banks.  But most of the buyers have Hispanic surnames, and the selling prices are way down from what they were just two years ago.  While I know that every property sold by a bank represents a family foreclosed upon, I'm nevertheless heartened to see that so many of our working and middle class families are finally realizing the American dream of homeownership. 

The Hispanic population of Santa Maria has been over 50% for many years, yet historically their share of property ownership has not been reflected in their numbers. Housing prices between Carpinteria and Paso Robles have always been much higher than in most similar sized cities elsewhere, mostly due to the Goldlilocks climate and natural beauty that abounds here. 
 
As for my own personal recession?  I work for a community college and although my job is secure, there isn’t enough money in the State’s budget to accommodate the rapid rise in enrollments we experienced this year.  So rather than absorbing the unemployed and retraining them for new jobs in the upcoming “green” economy, we had to turn them away.  With my house and car paid for, my credit card debt less than ten percent of my net wages, wages which for an older, single woman with no children are well more than I need to survive, I cannot complain.  I wish I had more in my savings account, but I’d rather be debt free first, so most of my paycheck goes to paying down my debt.  I must admit that I’m not stimulating the economy much these past few months, nor do I plan to until I am debt free and can pay cash for everything. 
 
Having survived several recessions since I first entered the workforce in 1969, this one scares me the most.  I think it’s because I’m older, and the time and flexibility it takes to “bounce back” from a financial setback just doesn’t exist for me anymore.

A reader writes:

I lost my job a year ago after a ten-day stay in the hospital and a two-month leave on disability. The small print shop I worked for had shrank from eight people to just three and the boss couldn't keep me on after all that. The shop is now just the owner and one long-time employee, still losing money.

I kept my COBRA going, but at $538/month, it became unsustainable. I let it lapse four months ago. Last month, I couldn't refill my high-blood pressure medications and I took my last thyroid pill on Saturday. I didn't know what I was to do. Kaiser wouldn't even let me PAY for my medications as I wasn't a member now.

I remembered Wal-Mart had these walk-in clinics. In desperation and fearing the worst, I went on Easter Sunday. The clinic was spotless, the doctor was a retired UCD Medical Center Professor who just wanted to keep his hand in and see patients, there wasn't any wait, the cost was only $59, and my prescriptions were only $9 each for a 100 days supply. Total with Wal-Mart: $86. With my Kaiser, I would have paid a $25 copay for the doctor visit and three $25 copays for each medication. Total with Kaiser: $100, but AFTER I paid $538/month to remain a member. Before Wal-Mart, my blood pressure was 123/186, today it is back down to 84/124.

My recession looks like law school in the Fall and medical care at Wal-Mart.

A reader writes:

As an actor in New York, I've long been accustomed to job insecurity. I've had dayjobs as a long-term temp for investment banks, as an administrator and research assistant in a cancer hospital, and many others. My most recent survival job has been more actor-stereotypical: I've been a waiter, working for a few different catering companies in the city. I've also been fortunate enough to supplement my income over the past few years with residuals earned as a commercial voiceover artist.

The recession is hitting my family where it hurts.

The residuals are drying up. My wife works part-time as a bookkeeper for a small consulting company which is increasingly in jeopardy of going under, and catering jobs are practically nonexistent nowadays. Both of us are trying to balance our work and audition schedules against each other while taking care of our two-year old son, since there's no way we can afford day care. And since my catering work was part-time, there's no chance of getting unemployment benefits. We've been living leaner and leaner, trying to keep our heads above water and failing.

For those who might say, "Why don't you give up acting and get a real job?" I can relate. Nobody forced me to take such an uncertain path, and I'm not really asking for sympathy on that score. Nor am I asking for a handout. But I have recently been blessed with agents who believe in my ability, and the right booking can literally change your life overnight. As the old poker saying goes, you have to be in it to win it. And I'm not sure what message I'd be giving my son if I gave up on the thing which gives me such creative joy, and which also led me to meet and marry his mother.

This week I caught a couple of breaks – I booked a radio spot, which helps a little, and I was hired by the US Census, which helps a lot. The work should be flexible enough to allow me to continue to audition, while paying well enough to allow us to breathe a little easier. Unfortunately the work is also temporary. But I'll take it and smile. Half a loaf is better than none. We are a rich family, even if our riches are not financial ones.

A reader writes:

I'm the first-ever web editor for my company, which is in trade publishing and currently converting all print items to digital. I haven't been laid off (yet) and my company hasn't gone bankrupt (yet), but my fiancee works in bankruptcy and restructuring for an international law firm and gets daily reports on companies that are "on and off the ladder," meaning they could go under at any time – my company is on that list.

The VP of HR "left to pursue other career interests" last Friday, and they just laid off people in our New York, Boston, Cleveland, Duluth, MN and Encino, CA offices today. Fortunately, I made the cut today. But I feel like I'm on a reality show, were every week someone else gets eliminated. I feel as if today I received a rose to move on to the next round as the head of the company said "will you stay here with me and continue to Web my world?" If alliances had any influence, I'd be making them right now.

A reader writes:

What recession? My wife and I, both in our mid-30's, are doing better financially than ever before. 

Three years ago we lived a comfortable "yuppie" life in DC in a neighborhood we loved (Logan Circle area). I work in communications/media, my wife in NGO work. We owned a souped up Honda we only drove on the weekends for fun; an expensive gym membership at Sports Club LA in DC; and we both had frequent international travel for work and ample money for eating out.

We rented, despite the constant drumbeat from friends and family who said renting was "throwing away" money. All the places we liked in DC to buy were too expensive at the time. I did not bother with 401K, as I was unconvinced it was such a great deal everyone was making it out to be. We lived good, but also kept stashing away money in savings account. Three years ago I wiggled my way into being re-located by my company to the largest city in Latin America to open an office. Wife and I jumped at the chance, even though it was a huge risk personally and professionally. My company sent me with little resources, so by necessity, I set up a very cost effective operation. I had no other choice.

Three years later, and my wife and I are still based in same city abroad and are doing better financially than any other time in our lives. We have zero credit card debt. I have job security, because the cost effective operation I set up here is now the "model" my company is using for other international offices as they look to ways to cut costs, as most companies now days. Meanwhile, my two cousins back in the USA who were urging me to buy a home for so many years, have foreclosed on their homes. One declared bankruptcy. All my friends over the years who said I was stupid and throwing money away by not taking part in any 401k plans, have seen their 401k's value crash.

A lot of our situation has been luck, and a little bit skill. I do feel for everyone back in the USA that are suffering now. I do not know what to make of our case. It is what it is. I do not take it for granted. But 40 years from now, when we are sitting around with friends who talk about how bad things were back in 2008 and 2009, we won't have much to add to the conversation. So far.

A reader writes:

I saw the post from the brother of the movie producer.  I run a workforce development and education/training NGO that focuses on entertainment and have some knowledge of the business of “the biz.”  Here are some additional things to consider about the health of Hollywood right now:

“Movies are recession-proof” is an incomplete (rose colored) view of the industry.  It stems from the fact that theatrical motion pictures did well in the Great Depression, so everyone figures they will do well in any recession.  They did well in the Depression for a variety of factors unique to that era—they were inexpensive to see and people had few alternatives.  It was also shortly after the birth of the talkies and the founding of the big studios, so it was an era of industry expansion, much like the high tech and internet booms of the 1980’s and 90’s (in short, not a mature industry).

Nowadays, movies compete with a whole range of cheaper forms of entertainment, such as TV, DVD’s, games and the internet.  At the same time, motion picture producers rely on a more diverse revenue stream to make money, such as those very same TV shows, DVD’s, games and the internet.  So, it’s a two-edged sword because all of those product lines are seeing decreasing sales revenues today.  In addition, certain studios have financial pressures unique to their specific business models—two big examples:  NBC-Universal, as a subsidiary of GE, has been forced to improve its bottom line and make cuts in expenses because the entire parent company is having problems with other divisions, such as GE Financial; Disney gets a big chunk of income from its theme parks, hotels, cruise ships and retail sales, all of which are not doing well right now.

Finally, your reader’s brother may have been impacted by accelerating runaway production here in Los Angeles—the trend to move production to cheaper locations, facilitated by improved remote and portable technology and tax incentives offered by those locales, as well as the increasing cost of production in LA.  That is a megatrend akin to the steel mills leaving Pittsburg, and will not recover much once the economy bounces back.

All that said, the entertainment industry is one of the healthier sectors of the national economy.  There is not a lot of hiring going on, but there are also no mass layoffs like the ones you are seeing in other industries.