The story is depressingly familiar; working in the construction industry, I’ve grown accustomed to cutbacks all around me, from suppliers to the city permit office and everything in between. For the first time in recent memory, multiple empty retail spaces punctuate every walk through downtown, the condo market has completely collapsed, and those projects that had sudden foxhole conversions to apartments now offer everything but a blow job to prospective tenants for signing a lease, yet still sit empty.
For the last twenty years or so, but vastly accelerating in the last ten, Portland has survived, prospered, and blossomed due to a whole lot of people from other places realizing Portland was just better, in tangible ways, than other places, and a lot less expensive than many. The population of the city, stuck under 400,000 for most of my childhood, shot up to 550,000 in that time. The metro area, even hemmed in as it was by our Urban Growth Boundary, increased by more than a million. All through the 90′s, I routinely rented apartments to arriving young couples and singles with no jobs, because I knew they’d get them, and they did. Always. It was enough to make me forget the grinding recession of the 80′s, as we underwent painful shifts in our economy from timber and paper to FIRE industries, health care, advertising and marketing, and of course, what eventually came with it, a real estate boom. Recessions seemed like a distant memory, that certainly couldn’t happen here.
It’s not so distant anymore, and it’s definitely here. Yesterday I got an email from my next door neighbor, Aaron, telling me he’d been laid off, and might be interested in some liquid refreshment. Although I don’t ordinarily drink, I thought that was a fine idea under the circumstances, and I certainly was interested in hearing his story. Of course, the bleeding heart liberal in me also recognized that the first thing a newly unemployed person needs is free food and booze. It’s axiomatic.
Aaron was one of four people laid off, essentially his whole department, and three others were reduced from salary to part-time hourly, this at a company of 21 employees. Those who remain will receive a 5% pay cut. Revenue goals for 2009, pegged optimistically at $900k per quarter, ended up being 758, 808, 692, and then, get ready… 364. That’s about as stark as numbers get. Even more disturbingly, the largely public entities that made up the bulk of Aaron’s work are piling up receivables. When I worked for Hollywood Lights, government customers were already the slowest payers around, and the tightest-fisted, too, but we put up with it because they always did, eventually, pay. (And not with vouchers, either…. Did you hear that, Arnold?)
The problem for Aaron, who in addition to having to leave the swanky CHNN Headquarters building for digs that most assuredly won’t be on Park Avenue, is that there are just way too many others in the same boat, and although there are jobs out there, the magic of the market dictates that employers enjoy a huge and growing advantage over potential hires. And as a healthy 20-something, he can probably go without health care for a while and take a lower salary, but the longer term affect of all this is just a continuation of the upward transfer of wealth, at the expense of everyone else. Heads they win, tails we lose. Again.
I’ll be discussing the Bay Area economy this evening with CHNN correspondent Jo Kumery, who is at Nike today, hopefully picking up some recession scuttlebutt from behind the berm.
More recession news later on this CHNN station. And on CHNN News Overnight.