TIMES O.C. POLL : Residents Say Recession Still Grips County

Reflecting a growing sense of pessimism about the economy, nearly six in 10 Orange County adults consider the state to be in a “serious” recession and a substantial majority believe it will last until at least next year, according to the latest Times Orange County Poll.

The downbeat sentiment is the latest indicator that Orange County residents have been pummeled psychologically by the recession--a slump that, according to technical measures used by economists, ended early last year for the nation and four months ago in Orange County.

Despite this modest recovery, people in Orange County continue to feel despondent about their economic future.

Two years ago--when the national recession was in full swing--only one in six Orange County residents thought there was a serious recession. Last year, nearly half felt a serious recession was underway.

“What it means is that people are finally feeling the effects personally,” said pollster Cheryl Katz of Mark Baldassare & Associates, the Irvine-based public opinion research firm that conducted the telephone poll.

“Consumer confidence continues to be bad, in fact, downright dismal,” she said.

The poll, conducted April 1 to 4, surveyed 600 adult residents and has an error margin of plus or minus 4 percentage points.

The public’s fear of bad times in Orange County was not surprising, economists said, considering that about 100,000 Orange County jobs were lost during the recession. The county’s unemployment rate rose from 2.9% in January, 1990, to 6.5% in March, 1993.

For residents of Orange County, which underwent unprecedented growth in the 1980s, such statistics increasingly take on a personal dimension.

Four in 10 residents were concerned about a layoff or were afraid that a family member was close to losing a job. That number was up by two percentage points from a Times Orange County Poll conducted last year, and up 15 percentage points from two years ago.

Especially hard hit by the economic downturn were those working in the defense and real estate industries.

With the construction industry taking a nose-dive in the past two years, Bruce Van Bel, a 45-year-old building contractor, has found himself unexpectedly thrust into a new occupation.

“We call it a househusband, “ Van Bel said with only a trace of mirth in his voice.

Van Bel, who was among those polled, said he now stays home to care for his three young sons while his wife, a nurse, works at Western Medical Center-Santa Ana.

To save money, the family moved this year from a larger apartment in Santa Ana to a cramped one-bedroom unit, which costs about $250 less each month in rent and utilities. Now living on only half the $3,000-a-month income the couple enjoyed in the 1980s, Van Bel has learned to be financially creative, exchanging handyman work at the apartment complex for extra cash and a discounted rent.

“For now, we’re just trying to keep things in balance,” said Van Bel, who is considering a change in occupations.

More than two-thirds of residents believe that job opportunities in Orange County will either decrease or stay the same in 1993, according to the poll, while only about one in four see the year ahead offering more jobs.

Further, only 16% believe that business conditions here are good or excellent, while fully half of Orange County residents consider business conditions to be only fair; 32% think they are poor.

Kay Porter, one of those polled, said she has figured out how to make ends meet in a bad economy.

The 36-year-old single mother from Huntington Beach splits her time among working as an instructional aide at a Westminster child development center, cleaning the houses of wealthy clients, and waiting tables at a restaurant.

“I don’t see anything getting better for me right now,” Porter said. “I’m at this point where I don’t buy anything at all because I’m not sure what will happen next to me.”

Pessimism in Orange County is more widespread than it is nationally. While one in three Americans participating in a University of Michigan poll, conducted in February, felt that they were financially worse off than a year ago, 42% of Orange County residents said they are worse off than they were in 1992. Only one in four in Orange County indicated that they are better off than a year ago.

“People are concerned, clearly, that California’s economy is lagging other parts of the country,” said Todd B. Nicholson, president of the Industrial League of Orange County. “This is not startling.”

In addition, a little more than half of Orange County’s residents said they expect that U.S. business conditions will have bad times in the next year and predict periods of widespread unemployment and depression through 1998.

Esmael Adibi, a Chapman University economist, said such pessimism is understandable. Although the university’s Center for Economic Research declared the Orange County recession officially over in December, the side effects--job losses, decreased housing values and lower manufacturing output--continue to plague the county.

The university’s latest economic forecast suggests that there will be a slight increase in jobs by year’s end as the service and retail sectors begin staffing for new business--generated chiefly by a rise in tourism.

Nevertheless, county residents will probably continue to be cautious with their cash, preferring to pay off debt rather than spend money on vacations or discretionary household goods, such as stereos, furniture and other big-ticket items.

Although half of those surveyed by the Times poll believe that now is a good time to buy such expensive goods and services, few apparently are doing it, Adibi said. Taxable sales in Orange County--a key indicator of consumer spending--have dropped 4% in the past year.

Karen Goldsworth, 53, of Irvine and her husband, Carroll, 54, seem to have their fingers on the pulse of the economy: She is a certified public accountant; he runs a direct marketing firm.

“It’s really been tough and it’s getting tougher,” said Karen, a poll respondent whose household income is about $90,000. Many of her clients are “barely hanging on,” cutting back on staff and watching revenue fall steadily.

A registered Republican who leans toward being a Libertarian, Goldsworth blamed the condition of the local economy on what she calls over-regulation and an out-of-control workers’ compensation system. Any new taxes, she feared, would only make matters worse.

While her opinion that the recession is “serious” is based on observing the financial problems of others, she said the recession recently has hit home. “I had to let my receptionist go so I could pay my taxes,” she said.

Mary Maglia, 50, of Anaheim is another poll participant who earns a good living but is facing a more uncertain future. The print shop she owns with her husband, Jim, 54, has suffered as clients cut back on purchases of fancy letterhead and other business stationery.

Together, the couple earn about $90,000 a year. But since the recession began, their shop’s revenue has dipped as much as 10%, and the Maglias have had to pare their spending.

“We don’t buy clothes and really watch what we spend,” Mary said. “Right now, I hope we can just tread water and stay abreast” of expenses.

UCI economist Robert Valletta said that the poll held few surprises, given the stubbornness of the local recession.

Many of the lost defense-related jobs, such as those in military aircraft, electronic and missile assembly, are gone for good, he said. Jobs replacing them are generally retail- and service-oriented positions that pay lower salaries.

“It’s going to take us a long time to recover,” Valletta said. “The Orange County economy is never going to to be back the way it was prior to 1990. I see no reason to think otherwise.”

Not everyone in Orange County is so pessimistic. One sector that is doing well in this economy is landscaping, according to Chris Holland, 32, of Santa Ana. He and his wife, Cheryl, 37, an executive secretary, bring home about $63,000 a year.

“I’m still smiling, knock on wood,” said Holland, a landscaping supervisor. “The grass keeps growing and I keep working.”

Still, optimists such as Holland appear to be in the minority.

Harvey Abernatha of Garden Grove, a 50-year-old regional manager for a Boston-based biomedical company, sat in his Anaheim office recently, peering out a window and counting the boarded-up storefronts at a nearby shopping mall. Nearly half were empty.

Whatever the reason for the recession, Abernatha said that it will take at least a year before the economy starts to right itself.

“There is great momentum behind all this,” Abernatha said. “People’s mind-sets have to change. Industry’s mind-set has to change. Confidence has to be restored. But the average person is not ready now. He is too afraid.”

ORANGE COUNTY’S OUTLOOK

More Pessimism About the Economy

More than half of Orange County residents believe that California is in a serious recession. They are more pessimistic than the rest of the nation, and they say their personal financial situations have not changed much since last year.

How many Orange County residents say California is in an economic recession: Serious recession: 59% Moderate recession: 26% Mild recession: 7% No recession: 6% Don’t know: 2% *

How they rate business conditions today in Orange County: Excellent: 1%

Good: 15% Fair: 50% Poor: 32% Don’t know: 2% *

When residents think the recession will end: By the end of September, 1993: 2% Between October and December, 1993: 5% In January, 1994, or later: 83% Don’t know: 10% *

How many think the country will experience good or bad times in the next five years:

April, 1992 April, 1993 U.S. 1993 Good times 43% 36% 38% Bad times 47 54 43 Don’t know 10 10 19

*

How personal financial situation compares to last year:

April, 1992 April, 1993 U.S. 1993 Better 29% 26% 33% Worse 44 42 33 Same 27 32 34

*

How satisfied residents are with their job security: Very satisfied: 48% Somewhat satisfied: 37% Not satisfied: 15% Source: Times Orange County Poll

ORANGE COUNTY’S OUTLOOK

Recession Still Impacting County

Orange County residents are expressing more pessimism about economic conditions. However, slightly more people say they are very satisfied with their pay and advancement opportunities compared to a year ago.

A vast majority say business conditions today in Orange County are fair or poor. Excellent: 1% Good: 15% Fair: 50% Poor: 32% Don’t know: 2% *

More than a third say they’re concerned that they or a family member will lose a job during the recession. Concerned: 39% Job lost already: 8% Not concerned: 53% *

How satisfied they are with:

1990 1992 1993 Job security Very satisfied 65% 52% 48% Somewhat satisfied 26 35 37 Not satisfied 9 13 15 Wages or pay Very satisfied 40% 24% 30% Somewhat satisfied 49 54 54 Not satisfied 11 22 16 Chances of advancement or being promoted Very satisfied 41% 31% 37% Somewhat satisfied 39 39 40 Not satisfied 20 30 23

*

Fewer people this year than in 1992 say they will be better off a year from now.

April, 1992 April, 1993 U.S. 1993 Better off 43% 38% 38% Worse off 6 12 13 Same 49 47 44 Don’t know 2 3 5

*

What they say business conditions in the country will be like for the next 12 months:

April, 1992 April, 1993 U.S. 1993 Good times 37% 35% 39% Bad times 54 53 36 Don’t know 9 12 25

Source: Times Orange County Poll

How the Poll Was Conducted

The Times Orange County Poll was conducted by Mark Baldassare & Associates. The telephone survey of 600 Orange County adult residents was conducted from April 1 through 4 on weekday nights and weekend days. A computer-generated random sample of telephone numbers was used. The margin of error for the total sample is plus or minus 4% at the 95% confidence level. That means it is 95% certain the results are within 4 percentage points of what they would be if every Orange County adult resident were interviewed. For subgroups such as employed residents, the margin of error is larger.