1. Archive

Are youths facing a recession?

By her own admission, life has been pretty good to Jennifer Sleeper. The Arlington, Mass., teenager has a computer, a TV and a cell phone, courtesy of her parents. But lately she's been getting some new rules. Her allowance? Cut by a third. Her folks also clamped down on her shopping and want her to do chores to use the family car. She's even had to get a part-time job at a local bakery. "There's definitely been a change around here," she says.

For kids, this summer may go down as the season of "No." During the past decade, parents at many income levels have worried they're spoiling their children. And with good reason: American families as a whole showered record sums on their kids in the '90s, driving double-digit growth in the $155-billion youth market. But now that the adult economy is slowing, it's children who are seeing some of the sharpest cutbacks in discretionary spending. While overall consumer spending rose slightly in the second half of last year, it fell by about a third among 8- to 24-year-olds, according to market-researcher Harris Interactive Inc. In another survey, 12 percent of kids said their allowance has been cut, while 16 percent have received fewer gifts.

Already, the kid slump is affecting more than families. The teen market grew 1.3 percent last year, compared with 8.5 percent the year before and almost twice that in 1998. Children's clothes are selling more slowly than most adult goods at stores such as Sears. Even summer camps are feeling the change: Though bookings are strong, stays are shorter, the American Camping Association says.

Kids are getting a wake-up call, says Michael Wood, vice president for Teenage Research Unlimited in Illinois. "All they've ever known are boom times."

Some parents see a silver lining: a chance to teach kids about hard work, frugality and sacrifice. "It makes them think about where the money is coming from," says Becky Lutkus, a South Bend, Ind., teacher. While she and her husband haven't felt too much of a setback financially, they were tired of the pressure to buy more things for their sons. So when Danny, 14, wanted drums, they assigned him chores so he could pay for half. And when Jamie, 17, griped that his friends had cell phones, his mom pointed at pay phones. If he wanted a cell, he could get a job, she told him. He did.

Cindy Cicio says her kids are also starting to understand. The Woodlands, Texas, mother of three was in the car with her family when a report about the falling stock market came over the radio. Eleven-year-old Jonathan, seeing his parents' reaction to the news, anxiously asked what it meant for him. She told him it meant he couldn't have everything he wanted. It also meant he couldn't go to that expensive summer camp where all his friends were headed. "Because I tied it to the economy, he got it," Mrs. Cicio says.

Of course, not getting the latest Game Boy is hardly the stuff of tragedy. After all, what's being cut in most cases isn't basics such as food and clothing, but discretionary spending _ the very frills many parents fret may be skewing their kids' values. Indeed, a series of polls and forums with about 100,000 teenagers by Visionary Resources found the kids most often affected by the slow economy are from families in the $150,000-plus income bracket. It isn't that the slowdown will affect their standard of living, Boston College sociology professor Paul Schervish says. "It's more that parents are looking for limits, and the economy is a familiar one: one that their parents used on them a generation ago."

Locally, Hudson Chevrolet dealer Tom Castriota said he has seen a drop in parents buying cars as high school graduation gifts.

"The last couple of years we saw lot of parents coming in buying new cars or nice used cars," he said. "I won't say that totally went away, but we didn't see numbers we saw in the past."

Castriota said his family also has cut back on spending this summer, substituting day trips for an out-of-state vacation.

But many bay area parents say they are spending just as much on their children as they ever did.

"Even though I've threatened, we haven't actually cut back," said Susan Easter of Lutz, who works in public relations and event planning. "Our spending over the summer has been fairly equivalent to last summer. It's pretty similar with my friends. I see their kids going to the same types of camps they did last year and taking the same types of vacations they took in past years."

In fact, enrollment is up at the Museum of Science and Industry in Tampa, where a typical day camp costs $155 a week for members.

At the Science Center in St. Petersburg, enrollment is down slightly, but director Susan Gordon was reluctant to attribute that to the economy. She said the center had deliberately reduced some class sizes.

"We also have offered some more expensive classes and they were among the first to fill up," she said. That includes sailing class at $430 a week and scuba diving for $475.

James Usher, a Pinellas Park carpenter, said he hasn't seen any reason to cut back spending.

"I'm in construction work and it hasn't slowed down a bit," he said.

But for evidence of the slowdown elsewhere, look no further than Silly Billy, the $450-an-hour clown in Manhattan who became practically a symbol of over-the-top entertaining for kids. He has seen birthday party bookings drop significantly. February was so slow, he says, he had eight events compared with the usual 25.

And when it comes to renting a limo for senior prom, more parents drew the line this year at high-end models such as Mercedes and Hummers. "We had a lot of cancellations," says Anthony Piscina, owner of Presidential New York and Los Angeles Limousines, where rentals of those models are down a third from last year.

As petty as such changes may sound, today's slump represents a pretty big shift for kids such as Peter Photopoulos. Like many 16-year-olds, he has been pining for a car, which his parents had promised him as long as he kept his grades up. Now, they've decided he can get a job if he wants a car. He isn't alone: A survey of 1,258 teens by Bolt Inc. of New York found that 23.8 percent of kids ages 13 to 19 have gotten a part-time job to make up for the parent's reduced spending.

All of this is lousy news for retailers who depend on teens. Same-store sales at Pacific Sunwear of California were down 7.4 percent in June and 9.8 percent in May. Even the Gap is slumping; same-store sales were down about 7 percent in June, after falling 10 percent in May. One of the worst performers? The company's teen-targeted Old Navy chain.

For their part, the Gap and some of the other companies decline to comment on the drop in sales, or cite other factors besides youth sales. And some youth-oriented retailers are doing fine: Wet Seal, Vans and Abercrombie & Fitch have reported robust sales and plans to expand. But analysts say any slowdown in youth sales is significant.

It's unclear how long the cutbacks will last. Discounts could help reignite youth spending, and some analysts don't expect this austerity to last past summer. Others say that because kids have mostly disposable income, a recession is less likely to hit them in the long term. And some parents say there are limits to how much they'll skimp on the kids: If they have to make sacrifices, they'll cut back on themselves.

_ Times staff writer Helen Huntley contributed to this report.