Are PIs Recession Proof?
- March 12, 2008
- by PInow Staff
Whenever the word "recession" crops up in the national discourse, so does the term "recession-proof."
Today, people are debating whether Google and Starbucks may be recession-proof, or perhaps domain names, Spam (the meat, not the digital junk), blogging, professional wrestling, lingerie, and teenagers.
Since the 1930s, claims to immunity from economic downturns have become popular marketing tools; only the industries that claim invulnerability have changed. In recent decades, businesses or services insisting they were recession-proof include weddings and honeymoons, pipe organs, Oriental rugs, Jaguars, auto parts, Tupperware, ultralight airplanes, bubble gum, Hershey's chocolate, chocolate truffles, Italian restaurants, Burger King, household plants, fitness centers, skiing, guns, power tools, gospel music, prisons, minivans and many more.
"One of the nice things about the hairpiece industry is that it seems recession-proof," Ben Kaplan, executive vice president of the House of Louis Feder, said in 1958. "In bad times, many men feel it is easier for them to find work if they look younger. Some men who have lost their jobs use part of their unemployment benefits to invest in a hairpiece."
Banking On Parents
Some industries have, in fact, done better in recessions than others: food, tobacco, health care and utilities, for example.
But even these aren't totally exempt from the effects of declining personal wealth. "There's nothing that could be called completely recession-proof," says Robert Whaples, professor of economics at Wake Forest University in Winston-Salem, N.C. "There are just degrees of recession-proof."
Not according to some marketers and executives. They say many industries do just fine in hard times. Goldfish, for one. "The type of people who spend $8 to $10 a week to feed fish are not your basic blue-collar types subject to layoffs," said a biologist at a Pennsylvania fish hatchery in 1983.
Pompons, for another. In 1990, Lawrence Herkimer, inventor of a type of pompon, said, "If times get bad, a father would sell the boat before he would tell his daughter she can't have pompons and her cheerleader sweater."
If you have kids, in fact, you can expect a particularly harsh recession because you just can't say no. "Nobody is too poor to take home a bag of candy for the kids," said the head of the National Candy Wholesalers Association in 1970. The next year, the president of a toy company claimed, "Parents always manage to scrape together enough money to buy something for their children even when they're cutting back on other things. Shirley Temple dolls even sold well during the Depression." Liquor weathers recession well, an industry spokesman said in 1971. "A man who is used to having a drink or two before dinner will continue to have those drinks even if he orders chicken instead of an $8 steak. A few may also be drinking to dispel the gloom of the economic situation."
The same seems to be true on the other end of the scale. "It doesn't seem to matter whether a guy is laid off or not, he'll still come in here and have a beer," a bartender at Aces High Tap in West Allis, Wis., told a newspaper reporter in 1982. The recession "might even help our business because some guys got nothing else to do."
Protection By The ZIP Code?
Many geographical areas have claimed to be more or less recession-proof until a recession proved otherwise. In the past few recessions, New York City; Dallas; Houston; San Diego; Palm Beach; Wichita, Kan.; Peoria, Ill.; Cedar Rapids, Iowa; Tulsa, Okla.; New York's Long Island and the entire states of California and Texas have proclaimed their immunity. During the 1970s, the Kerrville Mountain Sun newspaper in Texas regularly punctuated its columns with a filler item saying, "This is not Detroit - this is Kerr County, where income is widely diversified - we are recession-proof!"
Marketers also capitalize on the larcenous side of recessions. Burglar alarms sell well when "there is more unemployment and more crime results," said an alarm-company executive in 1971. Private investigators prosper during recessions, a private investigator said in 1981, because "fraud and theft tend to increase when jobs are scarce." Spiritual anguish helps make Bibles recession-proof, a brokerage analyst claimed in 1980. "Sales typically increase during periods of unemployment and economic uncertainty."