Who's Making Money Now ...
Hard times everywhere? Hardly! A gimlet-eyed look at the winners and losers of the new economy—plus, salary figures for 100 jobs in Minnesota.
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Never have “pre-owned” lamps and “vintage” armchairs looked so appealing. Shoppers wishing to sate their spending-spree impulses have flocked to thrift stores. “We are having a good year,” says Brian Becker, marketing director for Goodwill/Easter Seals Minnesota. “Our store sales are up 14 percent over last year.” The local Goodwill, which takes in more than 60 million pounds of donated goods annually and funds job-training programs, recently opened two new outlets. It has also spiffed up the older ones. “We’ve got a bright color template that’s inviting. Lots of duct work.” Becker says. “It’s kind of the Old Navy look.”
Loser: Specialty Home Stores
With home building in the dumps, there are fewer living rooms and bedrooms to furnish. This has been tough on shops like the Deco Boutique, Poliform, Luehmann, and the Good Life—just to name a few of the specialty home stores that closed their doors in 2009.
Though tattoo artists tend to be too pirate-like to belong to any state organization that might track business trends, anecdotal evidence suggests they are doing well indeed. That’s not so hard to believe when you consider that about a third of people between the ages of 18 and 40 say they bear ink. “We’re on an upward trajectory,” says Scott Elke, co-owner of Live Fast Die Young Tattoos in Minneapolis. Though the studio opened in the dark days that brought 2008 to a close, he says they recently hired two additional artists. By Elke’s lights, a tattoo may be the perfect antidote to the recession: “You can’t have it taken from you. You can’t pawn it. And it doesn’t break down.”
Loser: Plastic Surgeons
As patients opt for less expensive procedures or forego them altogether, plastic surgeons are earning less, says Joe Gryskiewicz, who practices in Edina and chairs the American Society of Plastic Surgeons’ emerging-trends committee. “A lot of patients, rather than having a face lift, will have a filler. I’ve had doctors in Minnesota tell me that their earnings are down 20 to 50 percent.”
Do-It- Yourself Classes
When earnest young do-it-yourselfers start asking the hardware-store owners where they stock the elbow grease, perhaps it’s time to acknowledge that the times really are changing: We’ve stopped outsourcing our household tasks. Minneapolis community-education classes on furniture reupholstering, home repair for women, plumbing, and glass-block windows have filled up fast, and classes on hardwood floors and drywall installation have also been popular. A remodeling class is perhaps the only DIY class that’s gotten a tepid response—perhaps because of the perceived high cost of making major changes. “My sense is that people are interested in the do-it-yourself things that are also low-cost,” speculates community-education specialist Rita Keltgen.
Your million-dollar idea just got more difficult to make a reality: Venture capital investment in Minnesota is at its lowest level since 1995, and credit card companies are pulling back credit lines, which means that entrepreneurs have fewer places to turn for cash. Mom? Dad?
While the value of the dollar has precipitously tanked, the price of gold has skyrocketed, reaching an all-time high in 2009 of more than $1,200 per ounce. People are rushing to purchase the shiny stuff because it “holds its buying power,” says Chuck Lewensten, owner of Twin Cities Gold & Silver Exchange, which has been around since 1968. By way of example, he explains that the amount of gold it took to buy a nice suit 70 or 80 years ago is the same amount it would take today. “It’s a great insurance policy. If it’s doing well, everything else is doing poorly.” Everything except Lewensten’s shop that is, which is drawing double the business of five years ago.
Loser: Scrap-Metal Dealers
Global demand for salvaged metal has slowed dramatically, leading to falling prices and slimmer margins for Kirschbaum-Krupp Metal Recycling and other area scrap dealers.
We know you’ve been itching to bust out that Beemer, but trust us: that sweet ride is so 2007. Gas-price volatility, an increased interest in eco-friendly living, and the high price of car ownership have given a boost to car-sharing services like HourCar, a four-year-old program that rents cars online, by the hour, to members. “Changes [in the culture and economy] are allowing people to think about the alternatives to owning a car,” says HourCar program manager Christopher Bineham. Its fleet of trendy Priuses and a hip marketing campaign (which includes the slogan “Kick Gas!”) have also encouraged young hipsters to take the plunge. Since late 2007, membership has doubled to about 950 households, and a 2008 grant has allowed the organization to add four cars to its 21-car fleet; another six cars will be added soon.
Loser: Solo Commuters
The environment isn’t the only thing paying the price when people drive alone: Single-car commuters are paying up to $8 each way through MNPass to get into express lanes between downtown Minneapolis and the south and west suburbs.
In Preston Sturges’s 1942 film Sullivan’s Travels, a producer sets out to make an earnest movie about the travails of the poor, only to discover that what people really want during hard times is a good laugh. Hollywood found the same last summer, setting box-office records on the strengths of such light fare as The Hangover and Up. That was a boon for local multi-plexes. “What we’re seeing during the recession is that people want an escape from what they’re reading in the newspapers and seeing on television,” says Andy DiOrio, a spokesperson for AMC Entertainment. At the movies, he adds, “people can turn off their brains and enjoy themselves.”
Anxiety has become a national pastime, yet fewer people can afford therapy. “I have a sense that business is down 20 to 30 percent,” says Trisha Stark, a licensed psychologist and director of professional affairs for the Minnesota Psychological Association. “It really is a struggle.”
If the Keebler Elves seem to be quaking in their tiny boots, it’s for good reason: brand-name recognition isn’t as powerful as it used to be. Two-thirds of people admit to buying store brands more frequently than in the past. Not only are the store brands profitable for businesses and cheaper for consumers, most people can’t tell a difference between, say, Pepperidge Farms and Archer Farms, according to a recent Consumer Reports study. Target has capitalized on consumers’ newfound thriftiness by rolling out a redesigned store brand called Up & Up. The brand, which ditches the bull’s-eye in favor of colorful arrows, includes about 800 items ranging from laundry detergent to sandwich bags. Early reports suggest sales are strong. And Tony the Tiger? He’s grrr…umpy!
Empty storefronts are getting more common, even in places that seemed poised to thrive. Despite getting a short-term boost in office rentals from the Republican National Convention in 2008, for example, St. Paul wasn’t able to convert the surge into long-term relationships: Building owners reported a year-over-year increase in commercial vacancy rates, now hovering at about 20 percent.