If you live in the United States, you’ve no doubt heard that there is a recession going on. Further, you may have even been touched by it. Of course, usually no single event is the cause of such a situation. The last recession that I remember was at the end of 2001 during the Internet bust. Those were difficult times. There were massive layoffs in the information technology area, especially in telecommunications specialties. At the time I worked for Texas Utilities. My reward for being a team lead and bringing in a project on time and on budget was a nice 30% reduction in pay. Sweet!
So, here we are again. Another recession. The dollar is very much devalued due to massive debt. Gas prices here in North Carolina are approaching $4.00/gallon and continue to rise every day.
A tale of one city
Charlotte, by definition, is a banking town. In fact, it is the number 2 financial center in the country, behind New York, New York. If you ask most anyone in town, it seems, they either work for Bank of America or Wachovia. I work for B of A, my wife, Wachovia. The banks, fueled by greed, decided to get into the easy money game. That is, they invested heavily in ‘sub-prime’ loans. I just love euphemisms … Let’s call a spade a spade, shall we? Bad credit! They all got burned. Some of them even went insolvent and had to close their doors immediately! As both my wife and I work in the banks, we’ve been hearing about layoffs, cutbacks, removal of training budgets, cancellation of all but executive travel, cessation of limousine service, etc., all in an effort to reduce the effect of their abject greed.
Deja Vu
Yesterday, I received a call from my contracting company. They told me that Bank of America has instituted a policy to reduce costs. For contractors, of which I am one, if you’ve been there for 6 months, you get a 5% pay cut, 12 months, 10%, 18 months, 15%. So, I’ve been there about 19 months, so I get a nice 15% cut on pay. On the positive side, I get to keep my job. I’ve been here before. At this time, there’s not much that I can do. As I said, it’s a banking town and everyone is in the same boat. Some people that I know, from the last round of layoffs, had to go out of town to get jobs.
Downstream effects
Naturally, when a portion of your income disappears suddenly, you look hard at your situation and start to look, like the bank did, for places that you can cut.
- Fortunately, my wife, sons, and dog will maintain their positions in the home.
There will be no layoffs. - The birds will get cheaper food, if any at all.
- We’ll go out to dinner less often.
- I’ve canceled my remaining photography trips for the year, opting instead to stay closer to home and make them weekend trips.(still going to Utah in less than 2 weeks, though)
- Tony will attend basketball training once per month, instead of 3 or 4, etc.
The impact on photography
A recession creates a ripple effect. As the employers cut pay and jobs, consumers spend less, causing business to have less income, and subsequently their owners, so they spend less, too. I wonder how this is affecting the photography community. Usually, in any down time, things such as using photographic services, tends to decline. It is certainly on the luxury side of the equation. I know that there are a number of you out there in business for yourselves full time, or either selling prints, etc. part time. Has this hurt your bottom line? Are you noticing any shrinkage?
Oh well, it still doesn’t cost much to go sit in the woods and listen to the music of nature. I did that yesterday. Simple pleasures.
Have any of you been affected directly by this recession either through layoffs, pay reductions, etc?
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14 Responses to “The downstream effects of greed”
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Hi Paul, Sorry to hear the bad news but really glad that it wasn’t an across the board layoff, like so many companies do.
This economy is very strange at the moment and I’m afraid with skyrocketing energy cost, the busting of the housing bubble (which isn’t over yet), rising food cost and the failing value of the dollar we’ve not seen the worst of it.
I hope out of all of this there will eventually be some positive change in the American lifestyle…but that doesn’t make it any less painfull.
Correction in comment above: “busting” should be “bursting”
Earl, you’re so proper!
Well, the cut, even though I don’t like it, is not such a big deal. It just means that I’ll have to trim back on my lavish lifestyle! No more trips to the spa for a cucumber peel or wrap or whatever it is! No more manicures or pedicures. I’ll just have to take care of my own feet and hands. 
I was directly affected by recession in 2001. I was in final year of college in India doing my under-grad; I got job at campus placement in 7th semester. But before 2 months of completing my degree – the company informed they are doing cost cutting; so deffered my joining date by 1 year. It hurt me emotionaly as I was waiting for my first job, which I needed badly to support my finance and independence.
After completing my education I went for job hunting but no one was hiring. After one month of job hunting – I got job in Mumbai, India. Salary was about half to what I was supposed to get at my first job offer but atleast I has something. Thanks to my dad for support during that time. Thanks to friends who informed me about the position and found contacts in that company to provide reference.
Getting layedoff before you even join at your first job really hurts!
Hi Paul, Things are much the same here too, utility bills are rocketing up, the housing market/bubble cetainly seems to have burst resulting in negetive equity, especially with people clambering to buy with 100% – 110% mortgages, its all very worrying, fortunatly I work for the health service so wages can’t really get much worse!! lol..and if it makes you feel any better I just did some math, the cost of fuel here (scotland) £1.22 per litre deisel and £1.11 for petrol, translated into us dollars and gallons that works out at a whopping $8.96 per US gallon for deisel, and $8.15 for petrol! I love the cracks and detail in that ol’ tree stump.
Along with the aches and pains of getting older comes the knowledge that these hard times show up regularly, but don’t last forever. They are part of the rhythm of life. (I remember all too well, waiting in line for hours at the gasoline stations in the 70′s and the recession that hit the world in the late 80′s.) Knowing the hard times are temporary doesn’t make them any easier or any more fun, but it helps me to accept them. The tough periods also help me to keep good times in perspective and to be deeply grateful for the bounty without expecting it to last forever. We are certainly caught in the thick of this one, and it couldn’t have come at a worse time, since we just retired and were vulnerable anyway. This time there will be no way to catch up.
I am terribly sorry Paul that you have to cancel your trips. I know you will make the most of your time at home—you are so wise about finding joy in small things. Still the rest of us won’t get to see the beautiful photos you would have made in those places. Drat! That’s bad for all your fans and friends as well as you.
Sorry to hear about your paycut. Nice reward for loyalty! Work longer, get a bigger pay cut : ( My company is actually booming and we’re desperate to hire new people. And housing prices in my immediate area are still staggering and most good homes still receive multiple offers. However, I just paid $4.40 a gallon for gas (not a bad thing IMO since it’s causing people to drive less and take public transport more often). The economy is weird right now.
I won’t buy any new photog equipment this year, just enjoy what I already have.
I guess the American economy affects just about everyone in the western world right now. Here in Norway we actually had a very strange episode regarding the American sub prime loans some months ago. It involved some very greedy salesmen from Citibank and some very naive local politicians in a handful Norwegian counties. Apparently the politicians was fooled into investing county money into some very complicated financial products which largely involved sub prime loans. When it bursted, they lost most of the money, nearly driving the county economy down the drain. I guess they will be hard pressed during the next election.
An gasoline goes for hmmm… let’s see..
around 8.9USD pr gallon here in norway now. Has been for at least a year you lucky bastards
@The European folks: Dang! Nearly $9.00 USD per gallon!!! Ouch! I still feel bad about paying almost $4.00 and would love to take public transportation, but most U.S. cities have poor public transportation and it would be difficult, if not impossible to get to where you need to go other than with a car or sharing a ride with someone.
@Anita: No worries about the trips. I’ll find something to shoot nearby. I live 3.5 hours from Great Smokey Mountains National Park. I just filled up my Toyota Camera at $3.80/gallon. It cost me $58.00! Ouch! When I first got the car, it cost me about $25.00 to fill it … those were the days.
Oh geeze, Paul! Does this mean you won’t be out here this summer? I suspect it does. That saddens me. But you are right, be glad you have a job. It beats the heck out of the alternative.
BTW, I love your homepage shot … looks like something I’d shoot
Best regards,
John
Yep, Europe has been well over $5/gallon for quite awhile – and how many big vehicles – pickups, SUVs – do you see over there? – hardly any. I am sure with the Euro exhange rate, they would be drooling over the chance to pay $4 US / gallon. Americans take consumption for granted (myself included in some ways), and it is starting to hit us like it has the rest of the world a long time ago. It doesn’t feel great shelling out at the pump, but probably for the best in the long run.
Can’t say I have much of a downturn on the business side. Hey – people stay home more, stay in more, they then feel like decorating!!
Paul, it fortunately sounds as if you were (kind of) lucky, considering the circumstances. Economy-wise it looks a bit better here in Sweden, so far. Might be (also) due to low dollar, as it facilitates European exports. But I didn’t realise that the situation is that serious in the US…
Anyway, good that you so obviously can enjoy the truly important things in life, those that begin with an “f” and which often come for free (money-wise): friends, family, free time, fotography, … (ok, sometimes you have to be a bit creative with the spelling
Thomas
P.S.: Yeah, gas prises are increasing and I guess they will continue to rise (we’re also around 9USD/gallon here). So, what do we do? Oh yeah, we start dumping our food into the tank and call that “biofuel” and “sustainability”. Great. One tankload equals food for one person for a year. Even better.
Oh, foodprices are suddenly starting to increase? Wow, now THAT’s a surprise…
Makes one realise how truly addicted we are.
Greed is the key word that brought me to your site! I was on the other end of the banking industry, the customer. Wachovia’s Greed not only caused us to loose all of our investments, but when the investments were gone, Wachovia was thru playin and called our ‘notes due’. (We were sold out by Roger Key and our retirement plan was terminated by Tom Farr) A far cry from the original “PLAN of ACTION” and “LONG TERM RELATIONSHIP” Wachovia used to earn our business. http://www.wachovialied.com