The Recession's Far Reach

When CBS News first met Greg Altieri, a sales executive at Far East Gem, a jewelry manufacturer in New York, he was attending the industry's biggest trade show in Las Vegas-at the worst possible time, reports CBS News Correspondent Jim Axelrod.

"This is as bad as the industry can possibly be," Altieri said.

But just being there made him better off than many of his competitors. Attendance was down 40 percent.

Jerry Natkin was among the missing. When asked why he didn't go to Vegas, he said, "I didn't have an appetite to look at things I can't buy."

Jerry owns William Barthman Jewelers in lower Manhattan, which caters to the Wall Street crowd. But they're not buying like the good old days.

So Jerry's brought in a new inventory line. He's stocking $450 watches for customers who used to spend easily 10 times that amount of money.

"So rather than lose this customer, we brought this product line in," Natkin explains.

Even with the new line, store revenue was down about $1 million. Natkin cut salaries across the board by 10 percent and had to cut his workforce - going from 24 employees to 18.

This meant that accountant Ed Middleton was out of a job.

"Life's changed a lot," Middleton said.

Now working freelance, Ed's making half of what Jerry paid him. Gone is the $60 a month spent at Starbucks, the $85 a month gym membership, and the $100 a month he used to spend on his favorite hobby: cooking.

"Well six months ago a luxury item would have been an aged steak and a really good bottle of wine. Now luxury items are pizza, waffles and ice cream," Middleton explains.

Ed thought his hobby might make a good next career. Then he priced a single class at the Institute for Culinary Education: $215.

"With my cut in budget there was no way I could take it," Ed said.

Diana Ortiz decided she couldn't afford not to take classes there. She wanted to follow her passion after she lost her job in home equity loans for Wells-Fargo.

Diana didn't know exactly what her passion was. It turns out it was right in front of her - in her kitchen.

"It's unfortunate that I lost my job along with many of my colleagues. But again, I discovered that this is what I want to do," Ortiz said.

To pay for her cooking program, this single mom cancelled her vacation plans this year - saving her $2500. She depleted $15,000 in her savings.

She calls it a new recipe: "Budgeting, budgeting, budgeting and planning."

Outside Des Moines, Iowa, Diana's friend Roxanna White is following the same recipe after also losing her job at Wells Fargo.

Fifteen months ago Roxanna started a gift basket company. She used her severance and cashed in her 401(k) to raise $15,000 in start-up costs. She also went from a $35,000 salary to nothing.

"I went from a great salary to you know to putting everything we have into the basket boutique," she said.

Roxanna says the goal now is to turn a profit by January. But in this recession, she thinks, "I feel there's only room to grow now, I really feel that way."

The best that even this optimist can do, is to set her chances as she says, at 50-50.

  • Jim Axelrod

    Jim Axelrod is the senior national correspondent for CBS News, reporting for "CBS This Morning," the "CBS Evening News," "CBS Sunday Morning," and other CBS News broadcasts.