Are Hard Times Here to Stay? : Even the Rich Have Bills to Pay
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.
How bad was 1991? It was so bad that at least one Hollywood writer who couldn’t pay his rent began living in his luxury car. Another hard-pressed worker in the entertainment industry found herself selling sunglasses at swap meets to pay her bills.
Many people have had to cut back on the glitzy goods and services that inspire comedy routines about the Westside. That fact isn’t going to elicit enormous sympathy in parts of the country with worse problems and worse weather. As John P. Marquand once observed, no one feels sorry for a girl on a yacht.
But 1991 was a watershed of sorts, the year that the formerly affluent began pawning their Mercedeses and Lamborghinis in record numbers, according to Tal Shmargal, general manager of the Collateral Lender Inc. Shmargal said that 90% of the vehicles he has on hand are high-end automobiles, up from 40% in the past.
Shmargal said the recession has brought a whole new kind of customer into his Beverly Hills pawnshop. The nouveau poor aren’t down and out exactly, but they have too many financial obligations and too little cash.
“We see a lot of people coming here for payroll money,” Shmargal said. Instead of tiny engagement rings and other modest treasures, they pawn art, family heirlooms and important jewelry. “Instead of the $150 jewelry, now it’s the $150,000 jewelry,” he said.
When The Times talked to Westsiders about the recession last spring, many reported they were experiencing the hardest times they could remember. For most, the picture hasn’t brightened significantly. This time around, at least one interviewee slipped and called the current battered economy, not a recession, but a depression .
“We had a terrible year,” said florist Daniel Demers. “We’re down 30%.”
Even people who believe flowers are an essential part of the good life cut back in 1991, said Demers, 32, who owns Paradise Avenue Flowers in Santa Monica and Marina del Rey. Ordinary day lilies at $3 a stem have been appearing lately in some of the best vases, displacing the exotic $20-a-stem Casablanca lilies Demers no longer bothers to stock.
Demers said he had to let employees go in 1991. And this week, he moved his Santa Monica shop from prestigious Montana Avenue to Wilshire Boulevard, which has less cachet but cheaper rent. “We’re just moving two blocks down for almost half the price,” Demers said.
James Comisar, a comedy writer and collector of TV memorabilia who lives in Beverly Hills, said he has seen a significant change in the way he and other Westsiders live.
“Hollywood people are having to be less Hollywood,” he said. A lot of his friends have unplugged their car phones. “It is no longer necessary to call from the road.”
The recession has also reached into people’s closets. Armani is out, Comisar said, Dockers are in.
Although writing jobs are harder to come by than in the past, Comisar continues to spend significant sums building his $1-million collection of TV memorabilia. Small collectors are liquidating to raise money, he said, and the big boys are getting choice objects at distressed prices.
But in the current economic climate, price is an object, even for a major collector like him. At a December auction at Christie’s in New York, Comisar lost out to another collector in the bidding for Thing’s box from “The Addams Family” TV series. Comisar dropped out at $19,000. The prop sold for $20,000, plus a 10% commission to the auction house.
The Westside’s small businesses have been especially hard hit by the recession.
“1991 was the worst year I ever had,” said Ness Twina, who runs the Housekeeper’s Agency, with offices in Beverly Hills, Sherman Oaks and Pasadena. Last spring, business was off 50% from 1990 at Twina’s agency, which finds nannies and other household staff for clients. It is only this month that business has picked up again, he said.
One consequence of the recession has been a change in the way the agency does business. When Twina was interviewed in the spring, he said several clients had recently tried to cheat him out of the agency’s 10% fee. Now, a client must sign an acknowledgment of his or her obligation to pay the fee before the firm sends prospective employees to be interviewed.
Susan Beer, who owns Bowser Boutique, a popular pet-grooming facility in West Hollywood, said business sagged throughout 1991.
“Generally, November and December are very good for us, and this year they weren’t,” she said.
Beer explained that the holiday season is usually busy for her because owners of beloved poodles and Shar-Peis are getting together with family and friends, “and they want the babies clean and beautiful.” At Bowser Boutique, clean and beautiful costs $25 and up.
Many clients who brought Fido in twice a month are now settling for a monthly shampoo and cut, she said. Beer is ordering far fewer bottles of doggie cologne these days, and pricey doggie trinkets simply gather dust. In fact, gourmet pet food is the only item that clients haven’t cut back on, she said. “The kid’s gotta eat.”
Beer estimated that the boutique made 15% less in 1991 than in 1990. She has had to cut back some employees’ hours. And she, too, is feeling the pinch. “I’m doing my own lawn,” she said, “and the car’s not getting washed.”
The art business, concentrated on the Westside, also took a hit during 1991, although the local art scene was less battered than its New York equivalent.
John Gallo, president of the auction house of Butterfield & Butterfield, said that the industry as a whole is way down. The crash of the international market for Impressionist paintings caused major declines in business at the giant auction houses.
“American contemporary art is also very, very poor, off by about 50% in the last year,” he said. “Furniture and decorative arts are pretty much flat, which is a victory in this market.”
Despite the dip industrywide, Butterfield & Butterfield saw sales rise 13% in 1991. “We actually had a record year,” Gallo said. He attributed the firm’s relative health to the fact that it is based on the West Coast, where the recession has yet to cause the widespread gallery closings and other art disasters the East Coast has experienced.
There is very little sweet-are-the-uses-of-adversity talk in the current economic climate. People with jobs say they feel trapped and under-rewarded by bosses who seem to view them as an economic drain rather than an asset. People who work for themselves are putting in punishing hours and feeling the strain that comes from knowing that you are all that stands between you and fiscal disaster.
Bobbie Everts runs Designer Previews in Marina del Rey, which matches clients with designers and decorators. Business was off 50% for much of 1991. Since November, the phone has been ringing more often, although today’s clients are talking reupholstering, not all-new furniture, Everts said.
Everts said she was trained to live frugally. “It was drilled into my head. Even if you’re earning $1 a day, you put 10 cents away.” But she sees the toll the economy is taking in the faces of her and her friends. “It’s so hard, especially when you’re middle class,” she said. “You don’t get anywhere.”
Rex Beaber, a psychologist who also practices law in West Los Angeles, says the current recession is having a profound psychological effect on people who have never worried about money before.
“Historically, there have been certain segments of our society that have been relatively immune from economic downturn,” Beaber said. “In past recessions, professionals, for example, were relatively immune. Now there are large numbers of professionals that feel an enormous economic threat.”
Beaber declined to give examples from his psychological practice. But he said he is aware of a growing number of people who are “afraid of things they thought they would never have to be afraid of.”
People who assumed they would always make more money than they made the year before are suddenly contemplating the possibility that they will not be able to send their children to the University of California, let alone Harvard or Stanford.
Mortgages on Westside houses that once looked like cash cows with lawns now seem incredibly burdensome. Many Westsiders are experiencing “debt trauma,” Beaber said, not because they were especially foolish but because they were guilty of sharing the common myth that America would always thrive.
Beaber said the people who survive the current recession will be those who realize “they don’t have a right to wealth” and respond by making themselves truly competitive.
It’s enough to make you hang up your car phone.
