The economic crunch has hit the nation's capital: High interest rates, high inflation and a consumer price index that keeps rising have sent people in search of ways to lessen the crunch.
Tom Martin, 30, a Montgomery County elementary schoolteacher, now works two jobs and commutes more than two hours a day to work from his town house in rural Brunswick, Md., where housing prices are lower.
"It's not the Taj Mahal, by any means," he says of his home, "but it's three bedrooms." And it means that Martin's wife, a former schoolteacher, can stay at home with their three children.
Teaching pays him about $20,000 a year. The rest of what it costs the Martin family to stay afloat he makes by working three nights a week and Saturday at Sears. He says many of his friends are doing much the same. "I'm not bitter, but with the cost of food and housing, there are some things we just don't do." Like movies or going out to eat. "We buy the necessities. That's it."
That's it as well for Maude Reusch of Alexandria, her husband, a management consultant, and their two children. "We don't buy a whole lot of meat, we don't go out. Baby equipment is what really gets you. I look for that at yard sales now. It's tough to keep money around. We charge a lot."
But sometimes even the necessities are too much. Area doctors say they've noticed that patients are a little slower paying bills these days. And there are more referrals to collection agencies.
"We're getting more accounts turned over," says Bob Greenberg, president of World Wide Collections in Virginia. "Businesses used to wait forever before they'd turn something over to us, hoping it would be paid. Now they can't wait. People are having cash-flow problems. Rents, everything, is going up."
It's the self-employed people, Greenberg has noticed, who are having the most problems. "Salesmen, small retailers, insurance agents."
Some goods move better than others, however. Take used cars. Chevrolet salesman Bill Chance ("You know, like 'take a chance' ") has sold used cars in Tysons Corner for 15 years, and though he says he and his colleagues have to work harder and longer to make a sale, the high price of new cars made last year a sweet one for him.
But customers are more angry about prices than they used to be. When Chance shows prospective buyers his inventory, and the prices, "Sometimes they look like they want to punch me in the nose," he says. "I try to stay calm, and I give them my card when they leave for the new car lot," he says. "They usually come back."
The mayor of Hyattsville, Tom Bass, watches the inflation on two fronts. As mayor, he earns $300 a month, which he adds to his job as an equipment installer for Western Electric. "I feel it personally," he says. "We get raises every year, but it seems like nothing changes, nothing seems to get better." Western Electric just announced layoffs, too, but Bass wasn't among them. "They explained to us that they don't want to borrow money now, and so they're not adding as much equipment or doing as much building."
Hyattsville itself, Bass says, stays in the black by cutting costs. The town sold its $50,000 street-cleaning machine, and its new trash truck needs a crew of only two, instead of three. But still, the costs mount. For example, a police car that cost the town $3,500 a few years ago costs at least $7,200 now. Says Bass, "We haven't raised taxes -- yet."
The failure rate for businesses is up more than 42 percent over last year, according to a small-business association. That's about double what it was two years ago, and even exceeds the rate during the 1975 recession.
"Rents have doubled in the last 10 years," says Globe Book Shops owner Alex Roesell. "I'm lucky to break even, and I have to work very hard. I look at the fliers from the Small Business Administration urging people to get into small business, and I can't believe it. I think the mortality rate must be very high, worse than divorce." Roesell got an SBA-guaranteed loan a few years ago at 10 percent interest, and thought that was high. Some loans cost twice that today.
"As an independent, unless you can increase sales at the same rate that overhead rises, it can only lead to one end. I'm lucky, I'm holding up against last year," he said.
There are other signs of the times. Bad-check writing has increased dramatically, local bill collectors and law enforcement officials said. So is food pilfering at grocery stores. Not too long ago District police were called in to arrest a man caught stealing $40 worth of meat and other goods at a Cleveland Park grocery store.
"The shoplifting has increased," says Safeway manager John Hershey. "It's mostly meat and high ticket items. We're looking out all the time now." Safeway security reports a 10 percent increase in shoplifting in the first half of this year, although it's dropped slightly since. "I think that's because we've beefed up security," says spokesman Ernie Moore.
Higher prices on the food shelf have sent many consumers to the garden. "I'm a lot more serious about my garden now," says Jo Ann Smith, who earns about $13,000 a year teaching at a private elementary school. "Last weekend I put up 48 quarts of pickles and 36 quarts of tomatoes. I put up peppers, tomatoes, beans, corn, potatoes and onions, too. It's time consuming, but without it . . . "
Smith took her two children shopping for back-to-school clothes recently. "I wound up buying fabric to sew blouses instead." The trip to the shopping center from Smith's Germantown home was made in a 1977 Volare. It gets 17 miles to the gallon. The family has learned not to make unnecessary trips.
"It's an endless chain, an endless chain," says town house builder John Holdsworth, whose houses in Potomac, Reston and Arlington languish much longer on the market these days, mostly because of high interest rates.
But builders, says Holdsworth, have to "deal with people's heads now, as well as their pocketbooks." In the face of federal budget cuts and personnel reductions, "federal workers are running scared. They don't even try to sell their houses anymore."
Yet, maybe there's hope. Ask the people at Grubb's Pharmacy in Washington. There, on a tree-lined street within sight of the Capitol, they've been doing a respectable trade in penny candy for more than 90 years.
"It gets harder and harder to find suppliers to sell us the stuff, but we still sell peppermints, squirrelnut zippers, caramel swirls and two flavors of taffy bubblegum for a penny each," says Ed Dillon. "We buy 250 pieces for $2 so we make 50 cents every time we sell 200."