Small businesses suffer in US financial centres

Small businesses in Charlotte, North Carolina are suffering from the changed spending habits of their clients as ABC correspondent Kim Landers reports.

While Wall Street may be the epicentre of the financial collapse that has rocked the United States, Charlotte is home to what were two financial powerhouses.

Charlotte is the city known as Wall Street South.

It is America's second biggest banking town, with the headquarters for Bank of America at one end of the main street and Wachovia's headquarters at the other.

Now many of the people employed in the city's banking towers are worried about their jobs and the small businesses that depend on them are suffering.

Busker Carlos Artist has chosen a spot halfway between the two.

It is only his second day and he reckons he can make good money.

But this North Carolina city has been hit hard by the financial collapse.

Wachovia has been taken over by a California bank while Bank of America has had to grasp two multi-million dollar rescues from Washington.

Wachovia was building a new corporate headquarters just a few blocks from its old one.

Construction is going ahead, but a big energy company will move in instead.

Mark Laws works on the site.

When I ask him what he thinks of the economy, he holds his nose between his thumb and forefinger - it stinks - and he does not think it has hit the bottom.

"No, no, not even yet. There's still a lot of bad debt out there that hasn't been dealt with," he said.

"Until it's dealt with, it's not going to be get any better."

He says he thinks things will get "a trillion dollars worse" and the stimulus package is not the right way to go.

"It's still too much... that's the only way out. It's not that I, I don't like it, but it's the worst of all the other evils that I've seen or heard about so far," he said.

About 30,000 people work at the two big banks in this city.

Wachovia's senior economist Mark Vitner estimates 1,500 jobs have already been cut and another 1,000 could go by the middle of the year.

In the cafes and bars sprinkled between the banking towers, business is slow.

Minnie Raynes manages two restaurants and says the banking customers have dropped by half.

"That's because they're not around, most of them," she said.

"And the ones that are, they're holding onto their dollars. So, small things like suits that are $270 - I notice there's a rise on the cheaper product.

"I mean, it's just rough. I've seen all around me businesses starting to collapse, and it's very scary."

A couple of blocks away Mattie Craig is standing with her hot dog cart.

She has been doing it for 22 years.

"It has changed a lot; it really has from the time I started, you know, 22 years ago. It's nothing like it was. Everything has changed," she said.

Yvette Dowdy is leaning against her cab on the main street. She has being driving taxis in Charlotte for eleven years.

"It's very hard now because corporate travel is down and a lot of people are just not using cabs anymore," she said.

"Sometime you could sit here four or five hours [without a fare]."

A bit of Charlotte's prosperity has slipped away and people here are hoping the city can pull through.

... read original article
Sat 21st March 2009 - 01:54pm