I've had a bit of an epiphany over the last couple of days. I'm still feeling it out, trying to reason it through, so bear with me. I'm not sure it's the sort of thing that can be proven or not proven.
It may just be....that the poor minimum wage job earners who service both the tourist industry and the retirement community in Bend.....may weather this downturn better than the so-called rich. After all, they've been managing to survive while costs of living in Bend have gone up and up. A downturn may turn out to be a relief.
There seems to me to be an irreducible minimum of clerks, maids, waitresses, gas station attendants, etc. etc. that an economy like ours needs. I believe that tourism, while it may go down a bit, isn't going to disappear. The massive chain stores and their minimum wage employees aren't going anywhere. Nor are the retired suddenly going to pack up and leave.
Several events have happened recently that made me start thinking this way.
First, I have a customer who started doing renovations last year. He was in today, talking about how last year at this time he was very concerned about the future, even though he had jobs lined up. This year, he said he actually wasn't as worried, even though it looked even more doubtful. He'd become "used to it". I laughed, and told him he had become a true Bendite.
A true Bendite can live with the fact that Bend is a great place to live even without money, as long as you figure out a way to manage it. The old Poverty with a View mentality that was common here 5 or 10 or 20 years ago. So, you don't go out to dinner as often, you wear you're clothes and drive your car a little longer, you relax and breathe in the mountain air.
The second was an article quoted over on the Bubbleblog2, (maybe from the NY TImes? couldn't tell), which talked about the slowdown in Utah and said this:
"Another big part of the West's boom has been affluent retirees, who bring non-wage income to spend and have swelled the economies of places like Coeur d'Alene, Idaho and many other picturesque, once-backwater towns now undergoing "Aspenization." Bend, Oregon and Walla Walla, Washington are two classic examples. These new arrivals may be changing towns too fast and driving prices way beyond what locals can afford, but they do have an economic advantage: Retirees keep on spending during a downturn, since they are living off savings."
I'll repeat, retirees keep on spending during a downturn, since they are living off savings...I may be stretching my definitions here, after all they do say 'affluent' retirees. But I'm talking about spending average money, not crazy rich money. I would quibble with the above definition of what retirees spend and how they act. I suspect most new retirees to Bend are going to spend most of their money in normal, everyday places.
(I admit, this whole argument I'm making breaks down if you include the majority of retirees as the very wealthy.... I'm defining them as people who spend moderate money, who are more likely to shop at Walmart than an art gallery.)
And the third thing was seeing how many tourists have been in my store and by observing the behavior of my own regulars. My regulars are cutting back, mostly, but just a little. I've lost a few, but not so many to be concerned. Most of them weren't earning the big bucks before, during or after the boom. Meanwhile, I seem to be seeing almost as many tourists as before, and many of them are from parts of California that I would've thought stricken.
But see, I've never really noticed that rich spend huge amounts of money in my store anyway.
If a minimum wage customer wants 50.00 worth of graphic novels, he will buy them. Maybe, at the last moment he'll put a 5.00 item back. If a middle class customer wants 50.00 worth of graphic novels, he'll buy them. If a rich customer wants 50.00 dollars worth of graphic novels, he'll buy them, and maybe throw on a 5.00 item.
But really, they all buy the same stuff, at about the same pace -- dictated more by interest and opportunity rather than income. A rich person doesn't suddenly say, Oh, hell, I only need 50.00 worth but I'm rich so I'll buy 100.00.
Not my kind of business.
If you'll all remember, I've always thought it was the High-End businesses that were doubtful. They never did well before this last five or six years, and I have a sneaking suspicion they won't do well now that the boom is over. I suspect that their expectations, their expenses are too high. They overshot. They aren't depending on small tourist sales, or modest retiree buying, or on locals, but on the idea that we're Aspen, that the rich are going to throw money around.
I even suspect it wasn't the rich who was spending all this money, anyway. It was people who felt they had to act rich, eat out in fancy restaurants and drive big S.U.V.'s and live in McMansions because they were involved in industries that demanded the appearance of wealth. Some will adjust down to old Bend, others will crash and burn.
The rich aren't going to save Bend. It's going to be the retired and the tourists, who will spend most of their money in places that pay minimum wage. It's going to be the regular folk who will be at the center of economic activity. Right where I want to be.
4 days ago