Though many Americans are now feeling the brunt of the nation’s economic downturn, both the College and Williamstown shop owners have felt only slight hints of the recession.
While the 8 percent ($110 million) drop in the College’s endowment last year is not insignificant, it is unlikely to change the ambitious spending currently planned for the next five years. Last weekend, the Board of Trustees approved initial spending for elements of the proposed Strategic Plan, which includes the building of a new performing arts complex, a total renovation of Baxter Hall, renovations of both Stetson and Sawyer and a 10 percent increase in the size of the faculty.
Catharine Hill, provost of the College and professor of economics, said that while the Board was certainly concerned with the state of the economy, the mood at the Florida retreat was “cautious, but optimistic.”
The College formulates spending forecasts based on an estimated nine percent increase in the endowment each year. While Hill admits that this number is “optimistic,” the College has rarely had trouble attaining such growth.
Hill has little doubt that the College can ride through the current recession unscathed. She credits the past success of the endowment, combined with smart spending, as major factors assuring future financial security.
“We’ve done a very good job saving over the past five years,” said Hill. “We could handle another year or two [of recession] as long as we hit nine percent in the long run.”
While neither Hill nor the Board of Trustees foresees a long-term deterioration, the provost’s office has run alternative financial forecasts that account for a more significant economic downturn.
“If we were to continue to see some bad years it would certainly have an effect,” said Hill. “We would have to make it up with gifts or other sources of income.”
The recession may even bring some benefit to the College. As tax revenues go down, state schools are forced to cut their budgets. As a result, the higher faculty salaries and decreased relative costs of schools like Williams are more attractive to faculty and students alike.
As the recession is having little effect on the long term plans of the College, even everyday hangouts like the Snack Bar appear to be insulated from outside economic influence. Carol Luscier, Snack Bar manager, reports that sales have remained fairly constant. The only noticeable change has been a slight drop in lunchtime traffic.
“Some of the staff that we used to see all the time are now choosing to brown-bag,” said Luscier.
Helen Ouellette, vice president for administration and treasurer of the College, credits solid sales at the Snack Bar as an effect of being in the center of campus.
“[The Snack Bar is] essentially serving an on-campus community. These are people who have not lost their jobs and are in no danger of being laid off.”
As the Snack Bar is not worried about a drop in clientele, neither are many of the independently owned shops on Spring St. Even as two large retail spaces lie without tenants, many merchants are reporting average, if not higher than expected, profits.
“We’ve been doing very well. Maybe even better than last year,” said Karen Goodman-Pedercini, owner of Goodman’s Jewelers.
Goodman-Pedercini said that the two years of construction on Spring St. had a more noticeable effect on sales than the current economic downturn. Bruce Goff ’83, owner of Goff’s Sports, expressed a similar sentiment.
“Recession has zero impact,” said Goff. “We were affected by local factors. . . the renovation of Spring St. had a much bigger impact on our business.”
Goff said that business is up from previous years. While this is only his second year in business, Sorasak Tongtawee, owner of the Thai Garden restaurant, also reported a rise in sales. He has not been in business long enough to have reliable figures on the effects of recession, but he has noticed one change.
“Last winter, we had large crowds from the local ski areas, but this year there is no snow or people aren’t skiing so the period while the College was closed for winter break was pretty slow.”
David Zimmerman, an associate professor of economics, credited the apparent economic insulation on the street as the result of a stable spending group, namely faculty and students who aren’t experiencing reductions in their income. Yet he does see the potential for some outside economic forces to influence sales.
“Any effects from the economic downturn are likely to be felt by cutbacks in spending by tourists,” said Zimmerman. “That would show up next summer â€“ though it’s hard to know how the economy will change between now and then.”
Ralph Bradburd, chair of the economics department, gave a similar explanation, but he proposed an additional factor.
“It may also be the case that the national economic situation and the post-September 11 uneasiness may have actually encouraged Berkshires tourism because people may have viewed the Berkshires as an attractive, low-cost, no-flying vacation alternative,” said Bradburd.
Even the Record, the only student organization to derive its income independently, has not been seriously hurt by the recession. Josh Burns ’02, business manager for the Record, said, “We’ve seen a decline in the number of large national firms advertising over the first semester. Luckily, we have been making up for that in other ways, such as subscriptions and local ads.
“However, we’ve seen a lot of businesses commit to placing ads and then cancelling them.” Burns also mentioned that the Sept. 11 attacks caused confusion within the student body, as a number of firms that had placed ads and were planning recruitment visits cancelled their trips without cancelling ads.
Thus, despite some slight bumps, Williamstown is plowing through the economic downfall. In typical Williamstown style, the town finds itself insulated from the national economic downturn.
The College’s stable employment suggests a favorable economic outlook for College-related businesses, such as the Snack Bar and Water St. Books, which depend heavily on College patrons. Like other aspects of Williamstown, Ouellette asserted, college-related businesses “are in an economic Purple Bubble.”