Economic crush squeezing locals

Cost-cutting, belt-tightening going on all over the area By Owen Boss GARDNER — The recent consolidation of the H&R 1871 plant, resulting in 200 employees losing their jobs, is just one example of how the national economic recession has affected local businesses. This recession has caused an increase in the price of fuel and food, adding stress to businesses and customers alike. All of these economic changes occuring simultaneously have both citizens of Gardner and local business owners reeling. While city officials have pointed out the challenges facing consumers and businesses, Michael Greenwood, economics professor at Mount Wachusett Community College has said that he thinks the economy will rebound. Citizens of Gardner are feeling the economic pinch on their wallets, as some have been laid off, adding to the increasing unemployment rate. According to Bill Linnehan, director of the North Central Career Center, Gardner has the highest unemployment rate when compared with Leominster and Fitchburg. “As of the end of the third quarter,” said Mr. Linnehan, “Gardner has seen an 11 percent increase in unemployment.” The problems facing the national economy are having a direct effect on the state of the local economy, according to Michael Ellis, president and CEO of the Gardner Chamber of Commerce. “Everyone is tightening their belt,” said Mr. Ellis. “The businesses are giving smaller raises, buying fewer products, and giving less benefits to their employees.” These increases in payments for the employee’s portion of health insurance, combined with lower wages are not only affecting the employees who pay these costs, but also the businesses themselves, according to Mr. Ellis. “These businesses are cutting costs left and right,” added Mr. Ellis, “Businesses are buying fewer products locally, and they are laying off employees to save money. When you have fewer people working for the local labor market, that means you have fewer people supporting our local stores. So rather than the businesses bearing the brunt, the employees are feeling the effects in their disposable income, which means they will have less money to spend locally.” Owner of Gardner’s Speedee Oil Change, Verne Hillman, has seen firsthand the effects of a struggling economy on his business. “Some of the guys who were (working) 40 hours a week are now getting 32,” said Mr. Hillman. Although he has been able to avoid laying off any of his employees, Mr. Hillman has not had as many customers. “Customers are still coming in,” said Mr. Hillman. “They’re coming in with longer time between visits. They can’t put off putting heating oil in your tank, and you can’t put off putting gas in your car, but you can put off an oil change. So our customers are going 6,000 miles as opposed to 3,000 miles.” Similarly, customers are also struggling to make ends meet. The only option currently is to cut back on spending. Judith Pemont, a shopper, said the increases in the price of food has not been gradual. “I used to come here once a week to buy groceries, and I noticed one week that where I used to pay 99 cents for a loaf of bread, the price had suddenly increased to $1.39,” said Ms. Pemont. “The prices go up pretty quick, the changes have been drastic.” Outside a local supermarket, Gardner resident Chrisann McKenna, weighed in on the effect the current rise in food prices has had on her family. “I noticed the prices have gone up here at Hannaford,” said Ms. McKenna. “Its tough, especially when you have a family at home. I’ve noticed that the price of milk has increased tremendously.” Asked what she planned to do to survive the current economic struggle, Ms. McKenna said, “I guess all you can do is just deal with it; with the economy in the shape that it is in, it’s really scary.” Although both the national and local economy are currently in distress, according to Mr. Greenwood, our economy should rebound from the current recession. “This is not the time for people to jump out of buildings,” said Mr. Greenwood. “This is not the time for people to panic; our economy works in cycles. This down cycle will eventually lead us to a recovery.” According to Mr. Greenwood, because most businesses are currently cutting costs and laying off their employees, it may be an ideal time for new businesses to grow. ”This is a perfect time for a savvy business owner to reinvest in their business, not run for the door,” added Mr. Greenwood. “Anyone can cut costs, but you cannot save your way to prosperity. Therefore, true business leadership requires a knowledge of the marketplace and a desire to get closer with the customers.” oboss@thegardnernews.com Appeared on Page 1 on 4/10/2008 (Vol. 206 No. 86)