Recession around the world
Time Out editors around the globe discuss the economic downturn in their cities.
The recession took hold of Chicago in 2008 like a bitter winter chill—and spring has not yet sprung.
Along with the early tells of serious economic depression—sales and income tax declines statewide and rampant housing foreclosures—many in the City that Works found themselves out of work. Early on in the downturn, it was not uncommon to see people recently axed from their corporate posts standing on street corners in the Loop, dressed in nine-to-five business attire and handing out copies of their résumés like nightclub flyers.
By spring of 2009, 10 percent of the city was unemployed, some of the hardest-hit sectors being manufacturing and construction. That rate fell briefly to 8.6 percent at the end of 2010, but the latest data shows it hovering again at around 10 percent (compared to the national average of 9 percent). Poverty in Chicago has worsened, too, as evidenced by spikes in demand at food pantries and homeless shelters.
“We may not see it downtown or in Lincoln Park as much, but there is a lot of suffering all over the metro area. Neighborhoods are emptying, subdivisions are not selling their homes,” notes DePaul University economics professor Tom Mondschean. “There is no feeling that anyone has any answers to getting us out of this mess. Washington argues but is unwilling to do anything constructive.”
The long lines forming at job fairs frequently rival queues of the still-employed outside hot-spot restaurants. Meanwhile, local creative orgs are left to scramble for funds or to cut projects and programming as the Illinois Arts Council delays its grant payments several months.
But the horizon isn’t completely bleak. Our thriving tech start-up scene, Groupon chiefly, is proof that innovative thinking—in the public and private sectors—could help slay the ugly recession dragon.—Jake Malooley, front-of-book editor, Time Out Chicago
Barcelona is dirtier than ever, and people are in a bad mood. Bars and cafés are closing, as well as luxurious restaurants. Drolma, one of the best eateries in town, recently shuttered, and the new big trend is “bistronomic” cuisine in which a former 100-euro-meal place gets turned into a 20-euro spot. A bottle of beer was two euros, and now we live in the age of the one-euro-brew war—which means beer prices are now below 2005 figures. So maybe it’s not all bad news.—Andreu Gomila, editor, Time Out Barcelona
It’s difficult to discern a recession atmosphere in a city that’s more or less had one since the Wall fell.
True, Germany has performed impressively well throughout Europe’s recent economic turmoil, but its capital is famous for its vertiginous debts and high unemployment rate—around 13 percent, double the national average.
Finding a job here has never been easy, and with most jobs in the service sector anyway, this is not a place to get rich. Creative types move to Berlin precisely because of its relatively low cost of living, cheap (though rising) rents and apparent resistance to big business. Berliners are just as likely to be heard crowing about the cheap price of their bicycles as comparing their latest iGadgets.
So it’s ironic that Berlin is being touted as the new Silicon Alley—a start-up hub for technology-minded businesses thanks to companies such as the popular audio site SoundCloud, the photo-sharing app EyeEm and the firm behind task-management tool Wunderlist, 6Wunderkinder.—Paul Sullivan, features writer, Time Out Berlin
On July 11, there was a big explosion close to the Mari military base, next to the biggest power station of the island—a result of government incompetence. Thirteen people died, and power was knocked out. The accident deepened the local economic crisis, and public spending has since ground to a halt. There’s not much optimism in Cyprus at the moment. Even if we’re in for a double-dip recession, it’s hard to picture it getting any worse.—Silia Ioannidou, editor, Time Out Cyprus
The stock market suffered a significant loss at the beginning of the fourth quarter, with many a citizen’s stock portfolio evaporating overnight. Restaurants are pushing more specials and promotions to attract diners. New real-estate units from developers have had a lukewarm reception. The luxury retail market, the tenants of some of the most expensive commercial real estate in Hong Kong, is seeing support from Hong Kong residents drop off. Those retailers have focused their growth on Chinese mainland tourists.—Jake Hamilton, editor, Time Out Hong Kong
Of all the areas of the country, New York pretty much got out from under the meltdown in fine form. The real-estate market, for example, went into free fall in 2009–10 but has since stabilized. People cut back, but new businesses—restaurants, art galleries, boutiques—continue to open, though not at the breakneck pace of the go-go naughties. Not fantastic, but New Yorkers aren’t exactly growing vegetables in midtown Manhattan the way some people are in downtown Detroit.
The reason for New York’s relative health is that it is the home of Wall Street. New Yorkers benefited from the taxpayer-funded bailout that rescued the financial industry from its own recklessness—and nobody at the top of the food chain paid any kind of price for it. So the hedge-fund managers and investment bankers, after a brief flirtation with a disaster of their own making, are sitting on piles of cash. Not that they are investing in jobs here directly, but they are spending money on entertainment and services, and that has pretty much kept things reasonable for the rest of us.
That this reality is unsustainable is the reason Occupy Wall Street demonstrators camped in the Financial District for months. It remains to be seen what effect if any the Occupy movement will have on Wall Streeters themselves. The economic situation might be stable now, but things will eventually have to improve for everyone else or there will be a reckoning.—Howard Halle, editor-at-large, Time Out New York
Measuring the psychological impact of la crise on what some see as the grumpiest city in the world is tricky. Despite his cost-cutting agenda, French president Nicolas Sarkozy has made the bold claim that he wants culture to be “France’s answer to worldwide economic crisis.” But it’s not necessarily high art that Sarko has in mind. The bottom-line fixation that the government has introduced has meant that the most obvious recession has been in cultural quality. Even TV channel Arte, traditionally a bastion of creative excellence, is moving away from its award-winning documentaries and cutting-edge art-house films to score higher audience numbers with less intellectual fare.—Tania Brimson, Art & Attractions editor, Time Out Paris
Australia weathered the last recession relatively unscathed, thanks to some decisive action by the federal government and regulations on our banking industry that put restrictions on the degree to which batshit-insane risks could be taken with other people’s money. But hopefully we’ll get to join in a little more this time as our government is in complete disarray and our opposition is following the U.S. Republicans’ model of putting short-term political gain over long-term national interest. So, fingers crossed!—Andrew P. Street, Comedy, Pop & Rock editor, Time Out Sydney
This past summer, Israel’s first-ever successful consumer boycott started with a Facebook group calling for people to stop buying cottage cheese because of its inflated price. It resulted in some of the largest food-manufacturing companies in Israel stating that they intended to lower their prices.
Prime Minister Binyamin Netanyahu also formed a committee of experts whose mission was to find a way to make life here less expensive. Even Netanyahu, the man who enthusiastically imported capitalism to Israel, finally realized it doesn’t make any sense to charge $14 for a bottle of olive oil in a country in which the median monthly salary is $1,800.
Ironically enough, before the protest started, Netanyahu’s stock defense against changing anything at all in the Israeli economy was the economic crises in Europe and the U.S. “Do you want the Israeli economy to plunge into a similar recession?” he would ask, presenting endless graphs that showed how well we were doing compared to a collapsing world.
Unfortunately for him, the public is not that stupid.—Eyal Datz, news editor, Time Out Tel Aviv
Just like the posh Hogwarts house captains they are, the U.K. government’s strategy for dealing with global recession has been to give the rest of us a bloody good pep talk. We needn’t bother with financial restructuring and regulating banks and suchlike. Good gosh, no. Look here, we just have to “all be in it together” (exemptions apply for large-scale corporate tax avoidance schemes); we’ve got to “take some tough decisions” (such as excluding kids of low-income families from universities), and “make some sacrifices” (state benefits and access to public health care).
London in particular has put on a brave face by rioting and descending into anarchy. Britain’s shocking summer outbursts led to five deaths, £100 million worth of damage and hundreds of homes and businesses turned to ash. It all came on the back of a wave of violent student protests in May, whiplash currency devaluation, a housing market stuck in neutral and the highest unemployment figures in 17 years (the current rate is 8.1 percent).
So London hasn’t been handling the global recession all that brilliantly. Oh, well, at least we’re not committed to staging an enormous, multibillion-pound international sporting event anytime soon.—Chris Bourn, international editor, Time Out London
This particular corner of Southeast Asia feels as if it is trapped in a profitable bubble.
The retail hub of Orchard Road is still packed; celebrity chefs have been wining and dining gamblers at the two newly built casinos; three clubs opened in October, introducing partiers to more world-class DJs; rapid ticket sales from Broadway shows like The Lion King and Wicked have created major theater buzz; and the new Marina Bay Sands (billed as the world’s most expensive hotel and casino) has dramatically transformed the skyline.
Occupancy rates at retail and commercial properties, meanwhile, have held up. Unfortunately for many of us, residential rents just keep rising. The hospitality sector seems to be the only one taking a hit, with forecast growth of 12 percent in tourist arrivals compared to 20 percent last year. While financial markets may appear nervous or cautious, this doesn’t seem to have affected the city’s boisterous buzz. If anything, the city seems to be standing on steadier ground than ever before.—Alexandra Karplus, editor, Time Out Singapore
Japan’s lost decade never really ended, which might explain why the financial crisis didn’t register quite as dramatically here as it did elsewhere. Still, the “Lehman shock” (as the locals invariably call it) did send out some discernible ripples, not least among Tokyo’s expat community, which has been winnowed down substantially.
The departing bankers and finance types took with them one of the most lucrative sources of income for the city’s more foreigner-friendly bars and restaurants, some of which have been forced to close. The club scene is also struggling, with promoters citing the increasing frugality of Japanese youth as one of the main reasons for dwindling attendance. But if consumers are spending less now, that’s part of a trend that began long before the 2008 subprime hoo-ha.
At any rate, Tokyo has far bigger things to worry about now, as the country struggles to deal with the aftermath of the March quake and tsunami, along with the repercussions of the Fukushima nuclear power plant meltdown—disasters that put even the gnarliest economic crisis into stark relief.—James Hadfield, editor, Time Out Tokyo