Deflation Hits Porn Industry, Canadian Grocery Stores, Pension Plans, Newspapers, Firefighters, Lawyers, High Tech

While nearly everyone is worried about inflation, deflation is hitting a wide gamut of white collar, blue collar, and no collar industries. Let's take a look.

Tough Times For Porn

The LA Times is talking about Tough times in the porn industry.

"We've gone through recessions before, but we've never been hit from every side like this," said Mark Spiegler, head of the Spiegler Girls talent agency, who has worked in porn since 1995.

"It's the free stuff that's killing us, and that's not going away," said Dion Jurasso, owner of porn production company Combat Zone, which has seen its business fall about 50% in the last three years.

Caroline Pierce, an adult film performer who lives in Las Vegas but flies to Los Angeles for work, said many companies have pressured her to do more scenes for less money. "Instead of paying you $800 to do one, they'll pay you $1,200 for both," she explained.

Less than two years ago, adult entertainment actress Savannah Stern earned close to $150,000 annually, sometimes turned down work and drove a Mercedes-Benz CLK 350. Now she's aggressively reaching out for jobs and making closer to $50,000 a year. As for that Mercedes? She's replacing it with a used Chevy Trailblazer -- from her parents.

"I wish I would have never gotten into it," Stern said of her career in porn. "When you get used to a certain lifestyle, it's really hard to cut back and realize this may not be forever."

Judging from her actions, it is clear that Savannah Stern, like many others, failed to put away anything in times of plenty. The party is now over and she is embracing frugality as recession hits a supposedly recession-proof industry. It's tough to compete with free.

Price Wars In Canada

The Globe and Mail is reporting Price wars grip Canada's grocery stores

Inflation is unwinding and, according to the country's largest grocer, sales volumes in the sector are starting to decline. Now Loblaw Cos. Ltd. has signalled it's ready to drop prices on thousands of products to keep customers coming to its stores. Its rivals vow to remain competitive, which could spark a price war.

Last week, Loblaw slashed prices by between 10 and 25 per cent on about 3,000 products in its stores in Atlantic Canada. This week, Loblaw followed suit at its Zehrs stores in the hard-hit region of southwestern Ontario, while also providing a 10-per-cent break to unemployed people shopping at those outlets.

“We're not prepared to lose market share,” Dalton Philips, chief operating officer at Loblaw, said in an interview Monday. “You've got to keep current and you've got to be prepared to fight to keep strong. We have no intention of backing down and not retaining our No. 1 place.”

Dayton Firefighters Accept Wage Freeze

The Dayton Business Journal is reporting Dayton firefighters union accepts wage freeze.

Dayton’s local firefighters union, International Association of Fire Fighters Local 136, has agreed to a wage freeze and other personnel concessions, Dayton city officials announced Friday.

Firefighter union members voted to accept the wage freeze for the 2009 to 2010 contract year and also gave up pay for Labor Day, Martin Luther Kind Day, Good Friday and Memorial Day holidays.

Mike Fasnacht, president of the local union, said the concessions were made for the safety of the community. Fasnacht said this is the first time in history the union has agreed to a zero wage increase. In the 70s, the union moved to strike for a nickle, he said.

This is a start, but only a start. Pension benefits will have to be scaled back for existing workers and eliminated for new hires. Moreover, cities need to consider privatizing all such services to reduce costs.

Wage Freeze At 30 Daily Newspapers

Bloomberg is reporting McClatchy Extends Wage Halt, Enforces Unpaid Leave

McClatchy Co., the publisher that posted a 30 percent ad sales drop for the last quarter, extended a wage freeze by at least four months for all employees and said it would enforce a week of unpaid leave at some newspapers.

The Sacramento, California-based publisher won’t increase pay among any of its roughly 8,800 positions, Elaine Lintecum, McClatchy’s treasurer, said in a telephone interview. Some of its 30 daily newspapers, including the Kansas City Star, will ask employees to take a week off without pay, she said. The publisher will also cut jobs at the Star.

McClatchy stopped its dividend this year, cut 1,600 jobs, reduced pay for most employees and halted matches to employee 401(k) funds. A one-year pay freeze had been slated to expire at the end of this month.

Legal Pay Reaches Apogee

The National Association of Legal Professionals (NALP) says Legal Pay Reaches Apogee.

There's nothing quite like the burning smell of deflation on a Monday morning. NALP has released its associate salary survey. The good news is that the median starting salary for associates is $130,000. The bad news is that there is no way on God's green earth that the median salary is going to stay that high.

The silver lining in the statistics is that they are only statistics. Individual results will vary and vary greatly. There are still plenty of firms paying $160,000. The dream is still alive, they're just giving it out to fewer and fewer people.

Quebec's Largest Pension Fund Takes Huge Losses On Real Estate

CBC News is reporting Caisse loses $5.7B.

Quebec's largest pension fund manager has lost more than $5.7 billion in real estate writedowns in the first half of 2009. In announcing the loss, the Caisse said it is reducing its exposure to certain types of higher-risk real-estate loans, known as mezzanine loans.

The Caisse was heavily criticized for its stunning losses in 2008, when the value of its assets plunged 25 per cent to about $120 billion, which included heavy losses in asset-backed commercial paper.

In Februrary the Quebec government held special hearings to investigate Caisse as the pension giant lost $39.8B.

Now in spite of a global recovery The Caisse pension fund is still turning in losses. Pray tell what happens when the market heads south again?

Portland Mass Transit Ridership Drops Eight Percent

The Oregonian is reporting TriMet blames recession, gas prices for falling ridership

Portland-area bus and MAX light rail ridership fell 8 percent in July, compared with a year ago, the TriMet transit agency said today.

Mass transit ridership has fallen for several months, an unusual trend for an agency that enjoyed increased use for 20 consecutive years through 2008.

TriMet officials blame the downward trend on two factors: the Portland-area's higher unemployment this year means people are commuting less and thus using mass transit less. In addition, 2008 was a banner year for mass transit agencies across the nation, as high gas prices prompted commuters to take mass transit instead of cars.

I received an email from "BG" on the above story. "BG comments:

The local transit agency was surprised to see ridership declines in July after 20 years of growth. Here are my personal observations. I often take the rush hour express downtown. The last 4 years, there has been standing room only, based on about 100 trips. The past 3 months the cars were only about 1/2 full. Drivers tell me that a lot of regulars have lost their jobs.

Pay Cuts of 30 Percent at Hewlett Packard

Dallas News is reporting EDS workers face more pay cuts.

Hewlett-Packard Co. is cutting some EDS workers' pay again, this time by up to 30 percent or more, according to some angry employees. H-P would not confirm the size of the pay reductions, though it did not dispute the reports of cuts ranging up to more than 30 percent.

This is the third pay cut for EDS workers this year, on top of roughly 25,000 layoffs announced last September after H-P completed its $13.9 billion purchase of the company.

Several EDS workers said in e-mails and blog comments that the new round of pay cuts would apply only to U.S. employees. H-P, which has been notifying affected workers over the last several days, did not respond to requests for confirmation of those comments.

Several workers said the cuts would be very deep for them. Some making roughly $75,000 said they would see their salaries slashed to about $55,000, about 27 percent. "I know that my career with this company is coming to an end," the man, who spoke on the condition of anonymity, said in a follow-up phone interview. "I can't survive after this kind of hit."

A huge attitude adjustment in store for the above anonymous interviewee. $75,000 jobs are not easy to come by. For that matter neither are $55,000 jobs.

Some voluntarily embrace frugality, others have frugality embrace them.

The amazing thing to me is that people are harping about inflation with this hugely deflationary backdrop across a wide array of industries.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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