The crisis we most talk about revolves around the big banks and the big corporations and our big government. But, of course, the real depression, the true state of the economy is to be seen in the everyday lives of ordinary people.
Shop Owners Shut Doors on Their Dreams | USA TODAY
MUNDELEIN, Ill. — Audrey Frankowski lived her dream for 21 years. It died this month when the sour economy forced her to close Jungleland Pet Center. She sold Betty the boa and the last puppies and kittens, got 10 cents on the dollar for leftover goods and took home Ozzie, a macaw she couldn't bear to sell.Frankowski and her husband, Rick, locked the store's doors for the final time after taking down the "50% off" signs and their handwritten farewell to customers: "More than words can express, we have enjoyed 21 wonderful years of caring for you and your pets. Thank you from the bottom of our hearts."
Frankowski, 53, isn't sure what she'll do now. Rick Frankowski, 47, is working seven days a week as a security guard. Store manager Bill Allen, 58, Audrey's brother, hopes to find a sales job. Walking away from the store they all loved, Allen says, "is depressing, and it's so sad."
The economy is forcing many other small businesses to close — including some owned by families for generations — shrinking shoppers' options and eroding communities' character.
The February economic report by the National Federation of Independent Business (NFIB) warns the recession could force "widespread business failures."
The economic stimulus package probably won't help much, says the NFIB's tax counsel, Bill Rys. The group failed to persuade Congress to suspend payroll taxes for six months to reduce small businesses' labor costs. No federal or trade group tracks closures of family businesses.
Not deep enough reserves
There are about 25 million family-owned businesses in the USA, ranging from Fortune 500 companies to mom-and-pop operations, says Robin Klemm, director of a family-business program at Oregon State University.
"What you're seeing is more of the small ones biting the dust," she says. They are most at risk in tough times because many lack solid business plans and deep reserves, Klemm says. "A rising tide lifts all boats, but when the tide recedes, if you're not over deep water, you're dead." ... MORE
When Barack Obama traveled to Elkhart, Indiana, to push his $800 billion economic recovery package two weeks ago, he made the former "RV capital of the world" a poster-child for the current economic crisis. Over the last year, as the British paper The Independent reported, "Practically the entire [recreational vehicle] industry has disappeared," leaving thousands of RV workers in Elkhart and the surrounding area out of work. As Daily Show host Jon Stewart summed the situation up: "Imagine your main industry combines the slowdown of the auto market with the plunging values in the housing sector." Unfortunately, the pain in Elkhart is no joke, and it only grew worse recently when local manufacturers Keystone RV Co. and Jayco Inc. announced more than 500 additional job cuts.In a speech at Elkhart's town hall, Obama caught the town's plight dramatically: "[This] area has lost jobs faster than anywhere else in the United States of America, with an unemployment rate of over 15 percent when it was 4.7 percent just last year… We're talking about people who have lost their livelihood and don't know what will take its place… That's what those numbers and statistics mean. That is the true measure of this economic crisis."
Elkhart, as it happens, is but one of countless towns and small cities across the U.S. that have proven particularly vulnerable to tough times simply because their economies relied on just a few major employers, or a single industry, or even a single company that has gone under or cut back drastically. Places like Elkhart are feeling the pain in ways most of the country isn't -- yet; and even worse, from the out-of-work to local officials, no one knows how to stop the bleeding. ...
... Most of America's desperate towns and small cities, however, still remain relatively anonymous. Even with their pain quotient on the rise, they lack New York Times profiles or presidential photo ops to draw attention to their woes. But it's important to note that Elkhart, Dalton, and Lehigh Acres aren't American oddities. Other towns and cities in surprising numbers are following fast down the path they have already cleared. Such places are now hurt or possibly, in some cases, even dying -- with little in the way of hope or help in sight. Under the circumstances, they should no longer be treated as individual stories, locally or nationally. They represent a pattern, and putting even a small number of their stories together casts a light on a disturbing countrywide trend that may determine the tomorrows of a remarkable number of Americans. ... MUCH MORE
Employers Hit Salaried Staff With Furloughs | Wall Street Journal
Temporary layoffs, once confined to blue-collar workers, are hitting white-collar culture as employers dig deep to cut costs.More companies are instituting these short-term hiatuses, called furloughs, as a humane alternative to permanent job cuts. But the spread of furloughs to new sectors and a new class of workers has created a host of issues.
"The places that are now exploring this or discussing this are not industries where it's traditional," says Joel Cutcher-Gershenfeld, dean of the School of Labor and Employment Relations at the University of Illinois, Urbana-Champaign. "I think a lot of [human-resources] offices are sort of having to figure this out. There isn't a rule book that they were given." ...
... A Watson Wyatt survey of 245 large U.S. companies to be released this week found that 6% of respondents plan mandatory furloughs over the next 12 months in reaction to the economy, with 11% having already implemented one. Many are taking these actions for the first time. ...
... The Port of Seattle is hoping to save $2.9 million by furloughing all of its 800 nonunion workers for two weeks. Most of them are professionals -- administrators and staff who do everything from financial analysis to executive duties. The CEO "wanted it to be fair and equitable and across the board," says spokeswoman Charla Skaggs. Further cuts will be more complicated for the port because it will have to negotiate with the union to save another $2.9 million. ... MORE
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