Leon, the six-figure screenwriter, is trading in his Mercedes for a Ford. Gasoline is getting expensive, he says.
Tom, the Equity actor-dancer, is working dinner theater in Claremont now that last summer's "Chorus Line" gig is just a lucrative memory. His current salary won't pay his MasterCard bill, but it will pay the rent. And dinner, after all, is free.
Jeff, the morning drive-time producer, lost his job just after Thanksgiving after five years of service at a well-known Los Angeles radio station. There is little comfort in the fact that he was not the only one to get the ax. His wife is pregnant and unemployment benefits won't begin to pay the mortgage.
Los Angeles seems to be at the brink of a recession this holiday season, even if the federal government is loath to admit it. And along with the well-documented souring of the Southern California real-estate market and massive defense-industry layoffs, the arts as well as broadcasting and entertainment are also beginning to feel the pinch.
Tom, Jeff and Leon may work in very different niches of the vast and varied arts and entertainment industries, but each is having to retrench in the wake of an economic downturn that put the state's overall joblessness at 6.7% this month. More people are out of work in Southern California than at any time in the last three years. The national unemployment average of 5.9%, which is also a new high for the same time period, is actually brighter than Los Angeles'.
Following the government's lead, David Letterman's home office in Lebanon, Pa., came up with such euphemisms as "lifestyle downsizing opportunity" and "the ugly, stupid cousin of robust growth" for the current dip in the economy.
The fact is, the United States has not had an official recession--defined as two consecutive quarters of gross national product shrinkage--since 1982. But the revelation earlier this month of worsening national unemployment figures prompted Michael J. Boskin, chairman of the President's Council of Economic Advisors, to admit to a "worsening slowdown" that will probably finish off the year with at least one quarter of GNP decline. If it persists through March, the nation will be in recession.
Much has been made recently of the "recession-proof" nature of the entertainment industry: motion pictures, TV and pop music. But the arts--particularly visual art and government-subsidized performing arts--tend to be among the first and worst affected. Thus far in the current belt-tightening atmosphere, those two propositions seem to be holding true to form.
On the one hand, Hollywood is expecting to take in a near-record $4.6 billion in 1990, overall ad revenue sales for the three major TV networks is running about 5% above last year and pop-record sales were one of the few bright spots reported in retail sales this Christmas.
On the other hand, grant money is draining from nonprofit arts. According to the National Assembly of State Arts Agencies, state agencies such as the California Arts Council have cut tax support for the arts for the first time in 13 years.
In addition, the National Endowment for the Arts expects to cut theater grants by 16% next year. Joe Papp's famous New York Shakespeare Festival was among dozens of arts organizations in New York that have had a total of $3.6 million in state arts grants suspended this fall as a result of that state's financial crisis. As of Jan. 1, 30 festival workers will be laid off. Overall, cuts are expected to be even more severe next year in New York.
Similar austerity will affect California arts groups in 1991, but not so much from taxpayer support as from cuts in foundation and corporate aid. AT&T and Philip Morris, both major corporate donors to the arts, have already announced a scaling back of funding and other Fortune 500 companies are expected to follow suit, said Los Angeles Theatre Center managing director Robert Lear.
Three weeks ago, a spokesman for the James Irvine Foundation--one of the major contributors to Southern California nonprofit stage and museum groups--announced that its $2 million in annual arts subsidies would be cut to $1.5 million next year.
* The Orange County Performing Arts Center--which made national headlines four years ago when it was built entirely with private donations--reported $1 million in losses at the box office, and executive director Thomas R. Kendrick said that troubles in the economy were having a similarly "negative effect on fund raising." The center has reduced programming, a hiring freeze was instituted in April, five of the center's 65 staff positions have not been filled and Kendrick said he does not rule out layoffs. Long-held plans for a second theater have been moved to the back burner.