Alfonso Castillo owns a store in the Jewelry District of Downtown Los Angeles — for now, anyway.
That's the sort of year Castillo had in 2009, with the economic recession complicated by rising costs of gold, a chief component in the jewelry he designs and sells.
The price of gold is up to record levels, near $1,200 an ounce, adding to Castillo's production costs. That's a tough situation in good economy, but the tight purse strings of the current recession make it much tough still.
"People are no longer buying jewelry like they used to because the price of gold is very high and because a lot of people who were customers have lost their job or their working hours have been reduced," Castillo says. "Before, anyone could buy these items, but now they prefer to buy more necessary things like food and clothes. The situation has changed a lot with the crisis."
Castillo says that he's getting by so far, but making serious adjustments. There's been a bank loan that now requires payments. He moved from a ground-level space on Broadway to a spot on an upper floor of a building on Hill Street, which makes it difficult to draw new customers.
"If we survive, it will be due to the bank credits and loans," Castillo says. "We've had to resort to that in order to be able to keep operating and to be able to keep paying my house."
Meanwhile, the price of gold — a haven for investors who fear that the deficit spending by the federal government will spur inflation — hovers over his operations.
"We can't invest much in gold right now because the price is quite high, and if it continues going up next year, as it looks like it will, it could lead to my bankruptcy, leaving me with nothing and with a lot of debts," Castillo says. "That's why we're working very hard and looking for ways to get ahead of this situation."
Getting ahead will mean landing some new contracts with big jewelry stores, or perhaps advertising to draw more retail customers to his upper-floor space, Castillo says.
"We try to keep going because we like the business, the work and for our families," he. "We're struggling because we also have family and personal expenses, and if we close it could mean losing my house because I would need time to get work and a jeweler's salary wouldn't be enough to cover all the needs I currently have."
Castillo says he has seen a number of fellow jewelers go out of business in recent months. He says that many others facing hard circumstances and have laid off workers, a move he reluctantly made awhile ago — and then again more recently.
"We had to cut personnel again during the year and we were left with just two," he says, adding that he's cut hours for the remaining employees and might have to let one of them go in the near future.
"I'm going to be left with only one employee," he says. "I feel bad about it, but I'm forced to do it because of how difficult the situation is and because of the loss of contracts. In fact, a lot of employees that have been laid off from this industry are coming here looking for work, but even though we'd like to, we can't give them any."
Mireya Olivera is editor of Impulso.
Photos by Impulso.
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