Economic Woes Getting Worse : Are Hard Times Here to Stay?

Despite predictions that the Westside would escape the recession, long unemployment lines are evidence of the opposite. Dishwashers and lawyers alike are looking for jobs. Welfare offices are jammed. Even the wealthy are starting to cut back.

No one thought it would last this long or get this bad.

After all the rosy predictions that the Westside would quickly pull itself out of the recession, the Los Angeles region’s blue-ribbon section remains down in the dumps--just like everywhere else.

Never mind that the Westside boasts a supposedly resilient and diversified service economy, an enviable quality of life and a sense of security derived from its prime geographic location. People--dishwashers and lawyers alike--just can’t find jobs, and more are ending up out of work every day.

On a recent morning during the Christmas holidays, for example, a line of men and women seeking unemployment benefits snaked around the inside of the West Los Angeles unemployment office.

They were young and old, of all colors, in wool suits and sweat suits. But their faces reflected a common exasperation that comes from standing in such a line for hours, and a shared sense of desperation that comes from not knowing what the future holds.

“You walk in here,” said Dee S., 50, an unemployed entertainment industry bookkeeper, “and you just know the recession isn’t over. It’s actually worse.” Like many others, she asked that her last name not be used, out of embarrassment and because she is looking for work in several fields.

“People are all mumbling that things have just got to change,” she said as the line inched forward. “Some of them haven’t worked since 1989. They’re one step away from being homeless, and it’s scary.”

The recession that arrived on the Westside more than a year ago shows no sign of leaving. And some economists and lay observers are concluding that it may never go away for good. They call it economic restructuring.

Thousands of white-collar jobs have been eliminated.

“That will be permanent,” said John Austin, an economic forecaster. “These jobs are gone.

“I’ve been telling my clients that we are poised for a depression,” said Austin, a partner in Municipal Resources Consultants, which does economic forecasting for Santa Monica, Culver City, Los Angeles and other cities. The protracted downturn, combined with some other factors, has “flattened corporate America,” he said.

Not long ago, many prognosticators insisted that the Westside would escape the brunt of the recession because it is home to some of the state’s most affluent workers and businesses. But this recession has spared almost no sector of the economy, so hardly anyone has escaped its grasp.

Even the wealthy are feeling it. Business stinks on Rodeo Drive too. And estates that would have been snapped up for $4 million in 1989 sit on the market for months, even when the price has been cut to nearly half that figure.

The middle class and poor, meanwhile, are losing full-time jobs and medical benefits at what one Venice Family Clinic official calls “a dazzling rate.”

Indeed, the number of Westsiders receiving general welfare, Aid to Families with Dependent Children and food stamps is up sharply. (Even in Beverly Hills: 43 people received food stamps there during one month last year, compared with only 18 during a comparable month in 1989.)

Some welfare offices are so jammed that caseworkers sometimes deal with several clients at once.

“It’s supposed to be private,” said an unemployed executive named Courtney, nearly in tears as she left her first-ever trip to a welfare office a few weeks ago. “It’s degrading. Hopeless. And I have to come back again tomorrow.”

At the West Los Angeles unemployment center on Venice Boulevard, the line starts forming well before the doors open at 8 a.m., and it does not go away until the office closes at day’s end.

In the past seven months, 32,446 people have come into the office seeking benefits, a 21% increase over the same period a year earlier. In December, more than 5,900 applied, up about 2,000 from December, 1990.

“We have to work overtime these days just to keep up,” said Susan Stevens, an unemployment office supervisor.

Not reflected in the West Los Angeles office’s tally are thousands of Westsiders who were dropped from the rolls after exhausting their 26 weeks of unemployment benefits, or thousands more whose benefits were prolonged thanks to the federal extension granted in November.

The extension of jobless benefits has meant more work for the employees: More than 3,000 such extension claims have been approved at the West Los Angeles center so far. But few workers can complain, they say, after seeing the torment of those who come for help.

“One man looked up and said, ‘Dear Jesus, thank you!’ ” Stevens recalls. “This extension was obviously saving his life.”

To be sure, there are many on the Westside whose affluence and job security have sheltered them from the recession and its vicissitudes.

Bill and Margie Neeley of Mar Vista have been living the good life in spite of the economy because Bill’s computer software development company has given him several fat raises.

“We’re luckier than most,” Bill Neeley conceded, munching a sandwich during a recent shopping trip at Santa Monica Place. But the family has had to postpone a move to San Diego because they can’t unload their house. Worth an estimated $700,000 a few years ago, “we’d have to give it away right now,” Neeley says. “We couldn’t sell it for $500,000 if we tried.”

Some businesses are cashing in on the misery of others. Temporary employment agencies are doing well, filling in as needed for laid-off full-time workers.

“We charge by the hour,” said Diane Brito, manager of Remedy Temporary Services’ Beverly Hills office. “There are a lot of companies--entertainment and insurance--that needed floaters who could go from department to department.”

For bankruptcy lawyers, business “remains fairly vigorous,” said Gregg Ziskind, a headhunter for law firms. Most pawnbrokers are managing to stay busy too.

But shakeouts at law firms and advertising and financial agencies continue, and many real estate agents are dying on the vine.

In the entertainment industry, the recession has fueled a widespread fear of taking creative and financial risks. The resultant corporate belt tightening has been felt from writers and producers all the way down to the film cutters, caterers and the grunts who move the equipment.

“It’s been a rough year for them, 1991,” said Jack Kyser, former chief economist for the Los Angeles Area Chamber of Commerce, who last summer started a private nonprofit agency to keep jobs and businesses in Los Angeles County.

“People are very rattled by what they see,” Kyser said. “They’ve seen jobs disappear that they never thought they’d have to worry about.”

Even agents, those ubiquitous deal makers who get paid commissions to make Hollywood run, have been socked by the network TV and film industry retrenchment.

Another business not faring well is construction. With demand low and financing nonexistent, virtually no one is starting work on any retail or office projects, and activity in the residential area is also anemic.

On some major projects--such as a large commercial complex at the corner of Sunset and Crescent Heights boulevards in Hollywood and the Hyatt hotel on the beach at Pico Boulevard in Santa Monica--work has stopped short of completion. Other jobs already planned and approved have not gotten off the ground.

As a result, work has dwindled for people such as Mike Barron of Culver City who work in related businesses. Barron, 45, is an architectural draftsman, and he’s been out of work for six months. But he says he’s lucky compared with several of his friends who have lost jobs, businesses and even homes.

“It’s scary out there,” he said.

A recent sunny afternoon found Melanie Cannady sitting on her car hood, wondering how she will feed Joey, her 4-year-old daughter, who fidgeted beside her.

Cannady, 25, a former travel agency manager from the Fairfax District, has been unemployed for a year, during which time the travel industry has shrunk steadily. She said she’s getting tired of “listening to bill collectors call every day,” and that she’s up against 40 or more white-collar executives every time she goes for even the most menial job.

With the lean times have come leaner wallets. Restaurants, car dealerships and other businesses that depend on consumer spending continue to suffer.

“I hope ’92 is better than ‘91,” said Kimberly Prasurtying, co-manager of Talking Thai restaurant in Santa Monica, glancing around at a near-empty dining room at what should have been the peak lunchtime period. “It was the worst year for business we’ve ever had.”

At least she’s in business. Gerald Breitbart, a Westside-based consultant for the California Restaurant Assn., says he drives by a newly shuttered restaurant “probably every day.”

Retail stores had a dismal year, and most failed to meet even their lowered expectations this holiday shopping season.

A few bargain stores--The Gap, for example--fared well, but in general, the malls were desolate, even in the weeks before Christmas. At Santa Monica Place and the Beverly Center, most shop owners interviewed by The Times said businesses was off 10% to 30%, and even more in a few cases. Several said they were on the verge of bankruptcy, and others have started off 1992 with a combination of dread and half-price sales.

And the once-roaring Westside real estate market? A small whimper might be heard now, if there are any signs of life at all.

Mammoth office complexes lie half-vacant, with those filling the office space moving in at bargain rates formerly unheard of on the Westside. And the residential real estate boom promised in the bullish aftermath of the Persian Gulf War lasted a month or two, then dropped off to next to nothing.

There are people out there looking for homes and condos, real estate brokers lament, but precious few are buying.

Corporations have frozen hiring; slashed costs, benefits and perks, and are still trimming their employment rolls to save money. Cities and school districts are looking at layoffs, freezes and service cuts too, to offset multimillion-dollar deficits.

For the Los Angeles Unified School District, it has meant cutting services and personnel rolls to the bone and beyond. When Culver City’s school district laid off two nurses in June, Sandy Segal became the only nurse for the city’s seven schools.

“I’m over my head,” she said. “I just can’t get to everybody.”

City leaders feel the same frustrations. Santa Monica is staring at a $3.5-million deficit, a disastrous state of affairs had the city not built up several million dollars for just such a predicament. Beverly Hills has eliminated 50 jobs, and drastically reduced services and spending.

West Hollywood also faces as much as a $3.5-million deficit because of plummeting retail sales revenues and a 10% drop in payments from the city’s six major hotels.

In Culver City, officials slashed services, froze hiring, and eliminated some police, firefighter and other positions last year. By doing so, they managed to cut a projected $4.5-million revenue shortfall to about $1 million. “It was a tough hit,” said Bob Norquist, assistant to the city’s chief administrative officer.

But it wasn’t enough. Tax revenues have continued to plummet.

“We are looking at next year being short in the range of $2 million to $3 million,” Norquist said.

What lies ahead for the Westside? It’s hard to find an optimist these days. David Hensley, project director at the UCLA Business Forecasting Project, said underlying weaknesses in the economy--too much debt, overbuilt office markets, falling real estate values and weak financial institutions--mean that California and the Westside won’t rebound until the end of 1992, at the earliest.

“Someone said the other day that I make Chicken Little sound like an optimist,” economic forecaster Austin chuckled recently. “But there is so much denial of the root causes of all this, a lack of awareness of what is really happening.”

“Everybody is suffering,” said Nelson Pedrozo, a UCLA economic researcher. “It’s going to be a tough year.”

Unemployment Rates

Unemployment is up almost everywhere in the greater Los Angeles area, according to a comparison of October unemployment rates for the years 1989-91.

Cities 1989 1990 1991 Beverly Hills 2.8% 4.1% 5.2% Culver City 2.5% 3.7% 4.6% Santa Monica 3.0% 4.1% 5.6% West Hollywood 5.7% 7.8% 10.4% Los Angeles 4.2% 6.2% 7.8%

Source: State of California, Employment Development Department Employment Data and Research Division