Saturday, October 25, 2008

The Impact

I've been working from home for about a month, starting when the Wall Street collapse began. This past week, I was back to riding the train to NYC again, and was shocked to see a very noticeable decrease in the number of suited passengers. Stamford is normally the busiest stop, with swarms of men and women in high-end business attire getting on and off the train. Now there's hardly anyone. Normally the morning train is standing-room only, with five or six people standing in every doorway. Now there's plenty of empty seats.

The news reports I've read have all been focused on the bail-out and on how the banks are currently spending money. There have been plenty of incendiary reports about bankers being given raises and bonuses, and exposés of corporate partying. What I wasn't aware of until this week are the huge numbers of layoffs. So far approximately 110,000 people connected to Wall Street have lost their jobs, with more layoffs anticipated. No wonder the train wasn't crowded. No wonder Stamford looks like a ghost town.

I have also read a Forbes report on towns most likely to suffer during this economic whatever-you-want-to-call-it. They cite the small town (25,500 people) of Zanesville, Ohio, which has an unemployment rate of 8.9% (Waterbury's is 8.6%, according to city-data.com), a poverty rate of 16.2% (35% of Waterbury households earn less than $25,000 per year), and an education statistic of 18% with an associates degree or higher (compared to 23% in Waterbury).

Zanesville's mayor is optimistic about his town's future, pointing out that they have plans for more than $250 million in school and downtown development construction over the next two years (sound familiar?). The article, not surprisingly for Forbes, does not spell out exactly what dangers Zanesville and other vulnerable towns face, nor does it in any way suggest what actions might be prudent for vulnerable towns. I would like to know those details, especially since it sounds like Waterbury could also be considered vulnerable. We've already seen fallout from the mortgage fiasco--foreclosures on homeowners who couldn't make payments when their subprime mortgages adjusted to higher rates, and numerous properties purchased by real estate speculators who drove the prices up without adding value and have now abandoned the properties, leaving pockets of blight throughout the city.

In that regard, maybe Waterbury has already seen the worst of the mortgage fall-out (just don't expect to get a good price if you're selling a house right now). Unemployment could very well increase. We're seeing a steady decline in the number of big stores, not just in Waterbury. We've lost two grocery stores, and it looks like they won't be replaced. The national chains are steadily going under: Steve & Barry's declared bankruptcy and closed their Waterbury store; Linens N Things declared bankruptcy and is closing its Waterbury store. When the plaza with Linens N Things first opened, there was a craft supply store on the other side of Stop & Shop which closed almost immediately and has yet to be replaced. I doubt that Linens N Things will be replaced. Waterbury is turning into a town of half-empty plazas.

On the bright side, the prices of gasoline and heating oil have decreased significantly. But that's probably not much consolation for anyone who's lost their job because their employer went bankrupt or lost their house because the bank increased their mortgage interest rates so much that they couldn't make their payments.

5 comments:

Peter said...

I've commuted in Manhattan on the Long Island Rail Road for the past eleven years. What with the tiny seats on the trains, and the general obnoxiousness of suit-clad riders, I tend to be highly cognizant of overall ridership levels and the number of suits. If there's been any decline in either category, I really haven't noticed.

Anonymous said...

How is it that we could have an abundance of half-empty plazas and the city approves the building of several new retail stores in the east end? Not only are they clearing what once was a nice patch of untouched land, they are basically turning a residential neighborhood into a shopping complex.

Waterbury Girl said...

It seems like Waterbury has been relying on retail businesses to boost the city's economy for at least a decade, even to the point of declaring the ugly stretch of shopping complexes on Wolcott Road a "Miracle Mile" (I have a very different definition of miracle...).

Given what's going on now, I can't imagine that the retail boom will continue. It's sort of like what happened with the brass industry (but on a smaller scale). The brass industry in Waterbury flourished for a century, dominated the city, became the primary employer, then fizzled and left Waterbury with thousands of unemployed workers and a landscape filled with abandoned factories.

Instead of keeping the retail industry in a concentrated area, Waterbury has allowed shopping centers to be built all over the city. The retail industry won't fizzle the way the brass industry did, but it certainly is likely to shrink, leaving us with empty stores throughout the city. Downtown Waterbury gets criticized for having so many empty storefronts, but the same is increasingly true for all of the shopping plazas.

Blue Eyes said...

I believe the stretch of shopping complexes on Wolcott Road is referred to as The Magical Retail Mile. The name was recently changed to The Magical Mile..

Waterbury Girl said...

D'oh! You're absolutely correct, and it's not the first time I've made that mistake. Must be something wrong with my neural wiring....