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These Trying Times : Economy: The Westside's white-collar workers aren't immune to the recession. They have been hit harder than in past downturns, some experts say.

Recession On The Westside: A Special Report


By any measure, the Westside is feeling the recession, although its diversified, service-based economy has cushioned the impact. Thousands of businesses and professional offices have been forced to make trims in staff or spending, and these cuts have rippled through the economy. The recession doesn't appear deep, but as the statistics show it is a broad one, affecting almost every sector of the economy. Unemployment is up. Sales tax revenues, a gauge of consumer spending, are flat. Houses are selling slowly, even if prices are holding fairly firm. Public assistance rolls are swelling. Has it bottomed out? There are some hopeful signs. Today we begin an occasional series on the recession's impact on the Westside.

The motivational speaker finished his presentation at the Hollywood unemployment office, and the roomful of out-of-work professionals practically bounded out the door, brimming with enthusiasm and ready to start knocking down doors in search of a job.

Have confidence in yourself, persevere, and land that dream job, speaker and job counselor Ron Kaufman had told the group of 14 men and women attending the state-sponsored job-training class for white-collar workers.

If only it were that easy. The fact is, there is a recession in progress, and the Westside, for all its affluence, is not immune. In fact, some experts say this recession is hitting the white-collar ranks harder than previous downturns, and that a diversified, service-based economy such as the Westside's is likely to be pinched in nearly every sector.

This is hardly news to people such as accountant Edward Scott, one of those attending the unemployment office's job-training class. He and many of his classmates have endured months of frustration and financial hardship. Some of them are standing in unemployment lines and pounding the pavement for the first time in their adult lives.

"Absolutely, in my wildest dreams, never did I expect this," said Scott, a Mid-Wilshire resident with a Ph.D. and more than 10 years of experience in accounting. He told the class, one of 23 around the state, of the stony reception he has been getting from prospective employers over the past several months.

"I don't get any response at all," said Scott.

Many of Scott's classmates grumbled about similar problems. "Recession?" scoffed out-of-work aircraft designer Donald W. Hormell. "No, it's a depression."

How bad is the Westside's recession? It's hard to gauge precisely. For the three-quarters of the Westside that lies within the city of Los Angeles, few separate economic statistics are available.

But the direction of things can be discerned from economic data for the smaller Westside cities--Santa Monica, Culver City, West Hollywood and Beverly Hills (though not yet for the newest city, Malibu). This information depicts a broad downturn, though so far not a horribly deep one.

Unemployment is up. In February, 1989, the unemployment rates in the four cities averaged 3.5%. In February of this year--the most recent month for which figures are available--the average was almost 6.0%.

Retail sales are flat. The residential housing market shows signs of climbing out of the pits, but home prices are well below their summer-of-1989 peak. And the ranks of the poor receiving public assistance are swelling.

Bankruptcy filings are up. Office suites in prestigious buildings in Century City, Beverly Hills and Santa Monica sit empty, testifying to some of the highest commercial vacancy rates in a decade.

Less measurable but unmistakable are the thousands of little cutbacks that businesses throughout the region have made--cutbacks that reverberate through the economy. Service-oriented businesses, such as law and accounting firms and real estate brokerages, have been forced to trim down to fighting weight. Some have laid off workers.

Many businesses, stopping short of layoffs, have eliminated overtime, frozen hiring or slashed travel and advertising budgets.

But the cumulative effect is that many, if not most, people and families--rich, middle class and poor--simply have less money to spend.

Thus, they remodel their homes instead of trading up. Instead of buying a new car, they're fixing the old one, or leasing. Rather than spending a night visiting the newest hot restaurant and spending $7 on a new movie, some are renting videos and cooking at home. And they're not buying anything they don't absolutely have to.

For Allan Taylor, a free-lance publisher and copy editor, the recession has meant "cutting back wherever you can, just to maintain. No splurging." A movie buff who lives in the Miracle Mile area, Taylor used to go to the theater twice a week. Now he goes once or twice a month. He cooks at home, and he has put off plugging the leaky roof on the fixer-upper he bought four years ago.

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