Tag Archive | "recession"

Opening a Bar During Recession

By Damiano Beltrami, Aisha Al-Muslim, Anastasia Economides

Sometimes there are advantages to opening a business during an economic downturn. Holiday Haber, owner of P&G Café, a bar that opened two weeks ago at Columbus Ave and 78th Street, says there’s not as much red tape now. At a time when many business are closing or scaling back, she says everybody seems to be pulling for her to succeed and willing to help her get started.

“We just had to buy a chiller for beer lines and the gentleman is driving it himself from Pennsylvania”, Haber said. “And we’re getting it at about a third of its value.”

Bars and restaurant may not be recession-proof, but people don’t stop eating and drinking when times are bad. One big advantage during a downturn is that everything is cheaper. People, raw materials, office space. And suppliers, desperately looking for jobs, turn up on time and offer reasonable returns by providing discounts or special treatments.

“Some landlords are renegotiating their leases,” said Andrew Rigie, Director of Operations of the New York State Restaurant Association. “Restaurant [and bar] owners have more empty spaces to choose from.”

Some economists like Harvard Business School’s Tom Nicholas and Mike Southon, Financial Times columnist and entrepreneur mentor, recently suggested that a recession can be a good time to start a business.

During the last recession (1991-92) roughly 25% of downsized managers over 40 started their own company, according to the U.S. House Committee on Small Business, and the outplacement firm Challenger, Gray & Christmas reports that in the first six months of 2002, 11.4% of jobless managers and executives started their own businesses.

“Because small firms and self employed individuals are more nimble than large corporations and can capitalize on market opportunities during economic downturns, it’s not surprising to see self employment spike during recessions,” said Rep. Nydia M. Velázquez, the Chairwoman of the House Committee on Small Business.  “It’s a testament to the American entrepreneurial spirit.”

Former managers willing to get start-ups running and small entrepreneurs like Haber share advantages as well as the same big disadvantage in starting a business these days: the lack of credit.

“In these tough economic times investments are a problem,” said Cliff Schorer, a professor at the Eugene Lang Entrepreneurship Center at Columbia Business School.

Haber used family savings and could count on a number of friends to help move furniture, paint walls and install electrical wiring. But she feels that the money is never enough.

“The costs are always far beyond what planned,” she said.


At a time when bars and restaurants are closing down and sell their furniture to second hand stores, the ones who want to open a business can pick and choose.

The heaven for third and fourth hand stools and tables is the Bowery, an area dotted with dozens of these shops. They are facing hard times, but are a boon for entrepreneurs.

Posted in Business, Featured, Multimedia

Angry Americans Protest Wall Street – Good Therapy, Poor Politics, say Experts

by Igor Kossov, Lindsay Lazarski, Mike Reicher and Kate Zhao

As April rain fell on Wall Street, employees at Bank of America stood between potted plants in their second floor offices and looked down at the angry crowd below. The people in the crowd waved plastic-draped signs, chanting “shame” and “bankers come out.” The bankers smiled, took pictures on their cell phones, but did not come out. The crowd moved on to yell at others.

Why Individuals Decide to Protest
SLIDESHOW: Why Wall Street Protesters RageSLIDE SHOW: Stories from Wall Street, April 3, 2009
Listen to New York University finance professor Kenneth Froewiss explain why Americans are angry so at Wall Street bankers:

[audio:http://cdn.journalism.cuny.edu/blogs.dir/132/files/2009/04/professor-froewiss_1-2.mp3|titles=Professor Kenneth Froewiss, NYU]
Major U.S. Protests During Current Financial Crisis

TIMELINE: View Major U.S. Protests During Current Financial Crisis

Americans are clearly mad – at greedy bankers, Wall Street bank bailouts and others – but their protests haven’t reached a critical mass and unity of message that would effect meaningful political change, experts say. Instead, they’re really just venting.

“I see it as a bunch of angry people,” said Darrell West, the vice president and director of Governance Studies at the Brookings Institute, a liberal Washington think tank. “It’s more catharsis as opposed to people following a coherent political strategy.”

Most U.S. protests of bank bailouts, for example, have been limited to several hundred people per event – as in the case of a September 25, 2008 Wall Street demonstration and March 19, 2009 rally in the Financial District of San Francisco.

Maybe the rain was a drawback on April 3, when fewer people than expected (hundreds, not thousands) protested the Federal bailouts of Wall Street banks and the $165 million of American Insurance Group bonuses. Experts including historian Howard Zinn called the rally, along with similar ones throughout the country, a mild response.

The rally also lacked a clear focus of the anger. Protesters chanted about bailouts but also complained about mistreatment of Guantanamo prisoners anr Israel’s occupation of Palestine. The mixed messages may have diluted the rage.

This unfocused approach has little meaningful effect on policy and doesn’t really spark the anger some Congressmen have displayed in recent weeks, according to Robert Reich, former U.S. labor secretary and professor of public policy at University of California Berkeley. Reich wrote on his blog (http://robertreich.blogspot.com) that Congressmen responded to a wave of mail and phone calls rather than people taking to the streets.

“In the short run, the government ignores political protests – hoping it will go away,” said West from Brookings. “They need to reach a critical mass in terms of numbers and visibility.”

In Europe, the numbers of people protesting the recession have been substantially higher. In February, over 100,000 people brought central Dublin to a standstill. Around 35,000 showed up to the G20 protest in London (though many were anti-capitalists before the recession). And in France, millions took to the streets in January and March.

U.S. citizens are much more likely than Europeans to go directly to their elected officials rather than express their rage in the form of a protest, wrote Reich on his blog.

Click Below to watch RAW FOOTAGE from the April 3, 2009 Wall Street protest:

Posted in City Proposals, Featured, Health Care, Multimedia, Politics, Video

High school seniors need college cash

Reporting by: Amber Benham, Rachel Senatore, Jessica Simeone and Nicole Turso

Teenagers these days aren’t just thinking about love and movies; they’re worried about how they’ll pay for college in a recession.

For these seniors, saving money is the goal.

Ivan ColladoIvan Collado
Ivan got accepted at the University of Michigan, but there’s a nearly $15,000 gap between the financial aid he got and what he’ll owe. [audio:http://digitalstoragespace.com/09/benham/audio/IvanCollege.mp3|titles=Ivan talks about college]
He’s trying to figure out how to make prom cheaper.[audio:http://digitalstoragespace.com/09/benham/audio/IvanProm.mp3|titles=Ivan talks about prom] Emily PalkanEmily Palkan
Emily is comparing tuition costs to find the best deal. [audio:http://digitalstoragespace.com/09/benham/audio/EmilyCollege.mp3|titles=Emily talks about college]She says taking a limo to prom is more expensive than it used to be. [audio:http://digitalstoragespace.com/09/benham/audio/EmilyProm1.mp3|titles=Emily talks about prom]

Ivan Collado, a senior at Archbishop Molloy High School in Queens, was accepted at the University of Michigan, but the $30,000 financial aid package he was offered isn’t enough to cover the $44,797 tuition.   His dad’s income is already stretched too thin supporting a family of five, so Ivan knows he’ll have to turn the school down.

“It felt worse than a rejection,” he said.

While tuition is up at both the City University of New York and the State University of New York, private scholarships are down, said Kerry Hughes, a college adviser at Molloy.   Even at the private school where she works, students are making tough choices this year about where to apply to college.

Ivan’s classmate Sydney Umana dreamed of going to Penn State.  But all that changed when she got a full scholarship to Felician College in New Jersey.

“I kind of have to go there now. It’s not a bad school, but, you know, it’s not my first choice,” she said. “If not, my parents would have to pay for everything.”

Though senior year is a notoriously expensive time for adolescents, parents of this year’s graduating class face more than the typical financial pressures as they prepare to send their children out of the nest.  For many families, tough times mean smaller college funds than they expected.

“Parents tell kids, ‘Apply anyway. Don’t worry about cost,’ in junior year,” said Hughes. “Then senior year, when push comes to shove, they tell them they can’t afford it and the kids go bananas here in my office.”

Another expense at a bad time

But before college tuition hits, these teens have another major expense to contend with first—senior prom. The event can cost hundreds of dollars once dresses, tuxes, transportation, flowers and entrance fees are all paid for.

Megan Kerrigan, co-founder of the non-profit organization Operation Fairy Dust that provides girls with donated prom dresses and accessories, said she’s been getting more calls than usual this year. She estimates she has enough dresses to outfit 6,000 girls, but with the meager cash donations Fairy Dust receives annually– “$1000, if we’re lucky”– she can’t afford to rent a space big enough to give them all away. This year, with corporate donations smaller than usual, she expects to help 1,000 girls.

In the face of overwhelming prom expenses, many teens are bargain hunting for their outfits, shopping in groups to get discounts and checking cheaper venues. But with more serious expenses ahead, Ivan Collado can still laugh about the money he doesn’t have to pay for prom.

“Can we take out loans for prom and pay it back later?” he joked.

Megan Kerrigan of Operation Fairy Dust says the bad economy has left her organization with more girls in need, but fewer cash donations to make it happen.

Posted in Multimedia

The End of Conspicuous Consumption

Karina Ioffee, Igor Kossov, Rachel Geitzhals, Mark Morales and Rima Abdelkader

Thrift is In: Consumers’ Attitudes Adjust to Downturn in Market

By: Mark Morales

testGone are the days of leisurely walks through the mall. Bargain hunting is all the rage now, and a necessity for a growing number of people. And while many retailers are reporting a drop in sales, some are benefitting from the financial crisis.

Goodwill Industries International saw a 5.5 percent increase in sales from the previous year. According to Lauren Lawson, a Goodwill spokeswoman, it’s the bargains that are driving the spike. “You can spend a hundred dollars and look as good as someone else who shops at a major retailer,” said Lawson.

Goodwill’s success is an anomaly. JC Penney reported a 9.8 percent dip for February and is predicting equally low results for the month of March. Gap Inc. isn’t faring much better, with its North American division reporting a 12 percent decrease for February 2009. Banana Republic and Old Navy have also been hard hit.

Meanwhile, Goodwill continues to flourish, seeing a rise not only in sales but also donations.

“People like the aspect of donating and shopping and reusing,” says Lawson.

On a recent day Joshua Perlowitz,47, and a resident of Flatbush, Brooklyn had found a table and chair for only $30. The items had been marked down from $100. That’s a big difference for Perlowitz, the father of four teenagers, who frequently need new clothes as well as items for school.

“I’m just trying to make ends meet,” he said.

At Michael’s, a consignment store located amidst the posh boutiques of Madison Avenue, business is also jumping. Here women sort through racks of Armani pants and Oscar de la Renta dresses, as well as both new and used bridal gowns. The store feeds the need for designer labels—this is Manhattan, after all—while minimizing the sticker shock that often goes along with it.

Clothes may be one thing, but what about cars which many rely on to get to and from work? Auto sales are down 41 percent from last year, as consumers wait longer to purchase new cars. But repair shops are also feeling the pain, as more people wait until the very last minute to make needed changes. At Maven Motors, in Jamaica, Queens, the shop is nearly empty on a recent day, a marked change from earlier days.

“We used to be packed,” says Primnath Singh, a mechanic. “We used to not have the time to even spit.”

















Photo Slideshow: Life in the Slow Lane

By: Rachel Geizhals


The automotive industry is in pain as consumers look to more efficient foreign-made cars. But repair shops are also feeling a sting, with drivers waiting longer to get needed repairs and forgoing many others. Click on the photo to visit a Queens-shop.

Take a Chance on Me

By Igor Kossov


Retail sales have dropped, but people are still buying lottery tickets. Even in the darkest of times, hope is the last to die.




Listen to the radio story here.




Something Old, Something New

By: Rima Abdelkader

The economy may be in the dumps, but people still get married. Check out a Manhattan store that is cashing in by selling discount bridal gowns.

Posted in Multimedia