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E-mail StorySoft economy pushes people to pawn shops
| Thursday, Mar 27 2008 5:58 PM
Last Updated: Monday, Mar 31 2008 10:35 AM
Serlina Blackmon isn’t what you’d call a pawn shop regular. She’d used a pawn shop only once before, as a last resort.
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Jesus Goday of Griffin MA & Sons Jewelry & Loan on 19th Street in downtown Bakersfield says the business is seeing more people turn to the pawn shop as gas prices increase and people have trouble finding work in a tough economy.
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Thursday, however, was just one of those days. It was close to the end of the month, and there simply wasn’t enough income from her home-based day care center.
So Blackmon, 23, who lives just west of downtown, reluctantly hocked a gold and jade bracelet at M.A. Griffin & Sons, one in a cluster of pawn shops downtown.
“I hate it,” she said afterward. “Hate it, hate it, hate it. But you do what you gotta do. When people aren’t working, they don’t need day care, or even if they’re working they just don’t have enough money to spend on day care, so they’re keeping their kids with family or something.”
It’s a fortuitous time for pawn brokers. Unemployment is creeping up, oil prices of more than $107 a barrel are pushing gasoline prices ever closer to the dreaded $4-a-gallon mark, and gold is hovering at or near record highs as investors and speculators anticipate further interest rate cuts. The financially stretched are selling or hocking just about everything you can think of. Jewelry, golf clubs and musical instruments were just a few of the items on display at area stores this week.
Like all retailers, pawn shops have their regulars. But a surge in first-time customers is a good barometer of the economy, said Steven Magnus, owner of Globe Loan Jewelry Co., downtown.
“Our customers feel it first,” he said. “They increase or decrease depending on how the economy’s doing. Right now a lot of people are struggling, and gold is high right now. People know that because they see the ads on TV, so they’re digging through their closets and jewelry boxes looking for something to sell.”
Gary Vance, an out of work truck driver, blamed the economy for having to sell a six-month-old computer. Globe considered the machine but ultimately wouldn’t take it. Six months is an eternity in the world of technology.
Undaunted, Vance planned to try a few more shops in a quest to raise money for gas so he could drive around and look for work.
“Gas prices are killing everybody,” he said bitterly. “But it’s especially hard for truck drivers.”
Gas is one of the most frequent reasons All American Jewelry & Loan customers give for selling or borrowing against their belongings, said owner Bob Noble. Especially if you have a long commute to Los Angeles or Fresno,
“People are needing gas money because it’s expensive,” he said. Gold, Noble added, is what’s coming in the most because you can get a lot for it right now.
The housing slump has made pawn shops attractive to another segment — contractors. Professional painter Mike Gomez, 38, who lives in the southwest, dropped into M.A. Griffin on impulse after dining at a restaurant next door, and was pleasantly surprised to see so many power tools.
“I usually buy new because I like to have a warranty, but it’s worth a look,” he said as he strolled by shelf after shelf of drills, saws and the like. “I just hope none of my stuff ever ends up here.”
Globe has plenty of tools, too. It’s a telling reflection of the housing market, Magnus said, when people come in to raise money not for a splurge or indulgence, but basic necessities such as mortgage payments or even payroll.
“We’ve had some contractors come in to get money to pay people,” he said. “Those are the honorable ones. Some contractors just walk away and stiff their employees.”
Jesus Godoy, who works for M.A. Griffin, says more and more customers are using pawn shops as part of their routine personal finance.
“They almost use us like storage, because keeping valuables here is safer than keeping them at home,” he said.
“And our interest rates, if you think about it, are lower than a credit card, so they just use us for short-term loans.”
The state regulates pawn brokers strictly. They can’t charge loan writing fees of more than $3 on loans of $50 or less, or more than $5 on loans in excess of $50. Interest rates vary depending on the amount and duration of the loan, but are usually about 21⁄2 percent after the first 90 days.
Michael Morin, who owns M.A. Griffin and Wooden Nickel Trading Co., said he’s watched an escalation of items put in hock.
“They start out with the easy things, CDs and DVDs and stuff like that,” he said. But as money gets tighter, they start bringing in items that are harder to replace, such as jewelry and electronics.
Morin has mixed emotions about those hardship cases, but because “probably about 90 percent” of his customers eventually reclaim their belongings, he figures he’s just helping people through a tough time. And even the items he has to sell ultimately help someone else.
“People can shop with us and at second-hand stores at a discounted price,” Morin said. “It’s a lot less money than buying new, and in America people can’t live without their TVs and video games. If they can’t afford them at the mall, they can still come here.”