Lorenzo Perez of Venue Projects in Phoenix has a model of apartments from containers.

Phoenix architect and developer Lorenzo Perez is planning what could be the ultimate in recycling: building studio apartments out of used shipping containers.

He joins a growing number of architects, developers, researchers and others who have become fascinated with new uses for the ubiquitous metal corrugated containers that transport goods globally by truck, train and ship.

The containers revolutionized international trade when they were created about 50 years ago. Now, new and recycled containers are being used for homes, apartments, dorms and shopping centers throughout the world.

The containers are virtually indestructible and, at $2,000 for a standard new 40-foot container, quite affordable.

They usually come in 20- and 40-foot lengths and are 8 to 9 feet wide and tall.

Perez wants to create two studio apartments that would each use a 40-foot and a 20-foot container placed parallel to each other, with a covered breezeway in between. The longer container would be set up as a living unit and the smaller unit could be a guest house, office or artist’s studio.

Assuming he gets permits from Phoenix, he plans to put the units on a lot he owns near Grand Avenue and Roosevelt Street and begin renting them this fall. It’s an area that has attracted a number of artists and is one of the main stops for the First Friday art tours. He said they could probably be rented for about $650 a month.

“I have been intrigued how people are using shipping containers globally for a variety of uses, whether it be transportation or shelter,” he said. “I thought it would be fun to do something in this particular area for affordable housing for artists or people who want to live downtown in something kind of interesting.”

Perez said his shipping-container homes could become models for affordable infill housing.

He especially likes the challenge of making metal boxes habitable in a hot desert environment.

From the inside, the containers would look like regular buildings. They would be finished out with drywall, windows and doors and, of course, plumbing and electricity. They would be insulated and air-conditioned and shaded by mesquite trees.

“We have found some interesting products out there that are used on containers for transporting heat-sensitive goods like produce and stuff that are applied by paint. They give a tremendous insulation value,” Perez said.

He wants to start with two units, rent them out and see how they work out throughout the year.

Perez and his business partner, Jon Kitchell, own Venue Projects, a development company, and Kitchell-Perez LLC, a building company that focuses on infill projects.

Containers have been used as buildings for a long time but generally not for homes.

Camelback Container Services LLC, a Phoenix company, converts containers into offices that can be trucked to remote locations, such as a construction site. Mobile Mini Inc., a Tempe public company founded in 1983, has become a major worldwide supplier of portable storage and offices.

John McManis, a vice president of One Way Lease Inc., the San Francisco parent company of Camelback Container Services, said container architecture is the latest phase in the history of containers. The metal boxes were first developed in the mid-1950s to create a better way to transport goods and cut down on breakage and theft.

In 2006, the 50th anniversary of the creation of shipping containers, Marc Levinson, a New York economist, published a book on their history and significance: “How the Shipping Container Made the World Smaller and the World Economy Bigger.”

But because of the global slowdown in trade, thousands are now parked at ports in Asia. Most shipping containers bring goods from Asia and Europe to North America and return empty because of the trade imbalance. Most containers are made in China, McManis said.

One Way Lease started leasing the containers for shipping and now mostly focuses on its wholesale business of converting them to offices or storage units. Mobile Mini has been a major customer.

Used containers are easy to upgrade for reuse, McManis said. Excess rust can be easily scraped off and then the metal can be primed and painted, and the containers can last more than 50 years.

“You talk about low-tech. They have two moving parts, a left door and a right door,” he said.

To encourage more diverse uses such as Perez’s proposal, One Way Lease’s Web site now promotes their many uses, including as additions to a shop, shelters, vending facilities and fast deployment levees. Walt Disney Studios used 180 containers in 1995 to create a giant movie screen in New York City’s Central Park.

“The person who has taken this farthest (of the company’s customers) is Lorenzo. This is really a neat little project,” McManis said.

Five Arizona companies were named to Fortune Magazine’s Fortune 500 list, down one from the six that made the list last year, according to a report released Sunday on Fortune.com.

The former Allied Waste Management was dropped from the 2008 list after being purchased by the smaller Republic Services Inc. late last year.

Avnet Inc., an electronics parts distributor, moved up sharply from 163rd place in 2007 to 144th, leading Arizona’s companies on the list. Avnet nudged out mining company Freeport-McMoRan Copper & Gold, which fell in rank to 146.

Companies are ranked by revenues.

US Airways Group, pet products retailer PetSmart and technology solutions provider Insight Enterprises Inc. rounded out Arizona’s list. PetSmart and Insight made the list for the second year in a row.

Will Flower, a spokesman for Republic Services, said the company did not end up on the list because the merger occurred in December and was too late to be counted. Republic had not been big enough by itself to place on the Fortune 500 list.

However, Flower said the Phoenix-based Republic expects 2009 revenues of $8 billion to $9 billion, which would probably give the company a berth on the 2009 list of Fortune 500 members.

On the national list, Exxon Mobil, with revenues of $442 billion, took the No. 1 spot from Walmart, which placed second.

They were followed by Chevron, ConocoPhillips, General Electric, General Motors, Ford Motor Co., AT&T, Hewlett-Packard and Valero Energy Corp., the nation’s largest refiner.

The magazine, in an accompanying article to be published April 27, said companies on the 2008 list suffered the largest drop in profits over the past two years in the 55-year history of the list. Profits fell from a record $785 billion in 2006 to $98.9 billion last year, an 87 percent decrease.

Companies that lost the most in revenue included American International Group, Fannie Mae, Freddie Mac, General Motors, Citigroup, Merrill Lynch and ConocoPhillips.

Of the five Arizona members on the list, only Avnet reported a growth in profits in 2008. But that was for its fiscal year through June 30; the company reported a rapid slide in sales and profits in the last quarter of the 2008 calendar year.

Three of Arizona’s companies had large losses, according to the list: Freeport McMoRan, $11 billion; US Airways Group, $2.2 billion, and Insight, $152 million.

But last drop was tiny

The Arizona Farm Bureau tracks the price of cheese as one measure of area food costs. The cost of a pound of shredded cheese fell $1.31 in the first quarter.

Food costs in Arizona have dropped for a second consecutive quarter, although the latest drop was tiny, according to an informal survey by the Arizona Farm Bureau.

The total cost of 16 grocery items surveyed in the first quarter of the year was $54.43, down just 32 cents from the fourth quarter of 2008.

In contrast, food prices in the fourth quarter dropped 5 percent, or $2.71, from the previous quarter, after two years of price increases, the farm bureau reported.

A national survey by the American Farm Bureau Federation also suggested that food prices dropped in the first quarter.

The national bureau’s first-quarter 2009 MarketBasket items were priced at $47.41, down $2.80, or 5.5 percent, from the previous quarter.

In Arizona, orange juice declined the most in price in the first quarter. The average orange juice price fell $1.40, to $2.49, for a half-gallon carton.

Among the other big drops: shredded cheese, down $1.31 a pound, to $3.65; 5 pounds of flour, down 50 cents, to $3.19; and milk, down 20 cents a gallon, to $2.87.

The largest increase was for sliced deli ham, up 79 cents a pound, to $5.38. Ground beef rose 30 cents a pound, to $3.99.

It’s hard to stay optimistic when bleak economic indicators keep pouring over us. Here are several tips gathered over the past year from economists and financial and job experts that may help.

• Cut your losses.

Whether it’s a house, car, boat, RV or other asset you can’t afford or no longer get value from, consider getting rid of it. We all want to hang on to things we paid a lot of money for. At some point, though, we just have to let go, enjoy being released from the burden, move on and learn a lesson.

• Park your ego.

If you are looking for work, consider taking something less that your ideal job until something better comes along. You may like it – and it may lead to a new career or at least help you see things differently.

• Don’t let fear hold you back from shopping.

That is what’s making the economy worse. Shop prudently and within your means and build up your savings. But allow some normalcy and take advantage of the great sales.

Also, show compassion for those who owe more than their homes are worth. Some were greedy, but most were just naive and unlucky.

• Be patient and open-minded.

This digitally and globally intertwined recession is unprecedented and serious.

Even the smartest minds disagree about what should be done because we’ve never been here before.

Leaders will make mistakes. The world is in shock, and there is a lot of anger and denial out there. It’s going to take months to figure this out, or as one reader pointed out, maybe years.

People apply for unemployment and other services at the Department of Economic Security office at 195 W. Irvington Road. Recipients need to be careful when accessing benefits sent on debit cards to avoid paying fees.

When you’re squeaking by on unemployment benefits, the last thing you want to do is pay money to get that money.

But if you use a debit card to get your unemployment benefits – an option in Arizona – and aren’t careful, you could end up paying fees when you make withdrawals.

You could be charged at least $1.50, for example, every time you use an ATM not affiliated with JPMorgan Chase, Washington Mutual or Allpoint more than once a week to withdraw cash.

By sticking to ATMs with those companies, you can spare yourself the fees. Or you can use the “cash back” feature when you buy groceries, for example.

Arizona is one of 30 states that have struck deals with banks to provide unemployment benefits through debit cards. States are pulling away from mailing checks because of high postal fees.

The debit cards, though, have raised concerns in other states because recipients who are already barely scraping by on unemployment insurance are being charged extra bank fees, including overdraft fees of up to $20 from some banks.

In Arizona, the average unemployment-check recipient gets about $220 a week. About 82,200 Arizonans are receiving unemployment benefits. Because of rising layoffs, 8,100 to 10,800 new claims have been filed every week so far this year.

After competitive bidding, JPMorgan Chase Bank has won the exclusive contract after competitive bidding to provide unemployment insurance debit cards in Arizona to those who want them.

The cards are reloaded with money weekly as long as recipients continue to qualify for unemployment insurance.

All new recipients are given the electronic payment cards. But they have the option of having the money deposited into their regular bank accounts. The Arizona Department of Economic Security wasn’t able to say what percentage continue to use the debit cards.

“Debit cards are a very safe and convenient way for recipients to obtain and use funds. And they usually cost less for the state to administer, saving taxpayers money, too, said Mary Jane Rogers, a spokeswoman for JPMorgan Chase in Arizona.

Although some banks in the country are charging up to $20 for recipients for overdraft fees for customers who try to spend more than they have on the cards, she said JPMorgan Chase does not charge overdraft fees for the cards.

The cards are preloaded with money and can’t be spent for more than that. Recipients can find out their balances by going to the Web site or calling the toll-free number listed on the back of the cards.

The Associated Press contributed to this article.

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Avoid bank fees

• Use the debit cards to make withdrawals only from ATMs affiliated with JPMorgan Chase Bank, Washington Mutual or Allpoint, a nationwide chain of no-charge ATMs.

• You can withdraw money from an ATM not affiliated with those companies once a week at no charge. But if you use an ATM not affiliated with those companies more than once a week, you will be charged $1.50 by JPMorgan Chase. You also may be charged fees by other banks.

• When you use the debit card to buy groceries, gasoline or other things, use the “cash back” feature to receive cash.

Sources: JPMorgan Chase, Arizona Department of Economic Security.

Joan Langlois, 45, has a bachelor's degree in nursing, but is seeking a job in another field. She was at Pima County One-Stop Career Center recently looking for work.

As the country enters its second year of recession, often described as one of the worst since the Great Depression, experts are starting to ask whether we are in a depression again, or heading toward one.

It’s a question no one can answer with certainty. There is no official definition of a depression or a group that can say when one starts or stops.

But there are big differences between today and the 1930s, which were characterized by unemployment numbers that exceeded 25 percent and images of migrant workers, tent cities and soup lines.

The Economist magazine noted there appears to be two principal criteria for distinguishing a recession from a depression: A depression has a decline in gross domestic product of more than 10 percent or is a recession lasting more than three years. We haven’t met either of those criteria yet.

The GDP is expected to drop about 4 percent this year, said Lee McPheters, an economist at Arizona State University. And the recession is only about 13 months old, according to the National Bureau of Economic Research in Cambridge, Mass.

The national unemployment for December was 7.2 percent, the highest in 16 years. Arizona’s jobless rate remains at 6.3 percent until a new report comes out Jan. 22.

Peter Morici, an economist and professor with the University of Maryland, says the country has entered a depression because it faces underlying structural problems such as a trade deficit, dependence on imported oil and a shortage of lending money.

“To me, the hallmark of the Great Depression was the inability of the economy to pull itself out,” he said. “We had massive amounts of stimulus, both from (Presidents Herbert) Hoover and (Franklin) Roosevelt.”

Morici worries that any stimulus programs adopted under President George W. Bush or President-elect Barack Obama will be just temporary fixes.

“My feeling is that . . . if (the president) doesn’t fix what’s structurally broken, what caused this, we’ll be back into this after the federal stimulus has had its effect,” Morici said.

Some people attending a job fair in Mesa on Monday said that while they may be mentally depressed, the economy doesn’t appear to be that bad.

Kevin Peek, 45, of Phoenix, who lost his 17-year job at Showcase Home Entertainment when the retailer closed in November, said, “It’s probably a combination of both, recession and depression.”

Mary Ann Buelna of Queen Creek, who was looking for part-time work, said, “It really is a sad situation. I wonder if we are in the first phase of something that could lead us there (depression).”

Traci Miller, 36, of Chandler, said after visiting the Arizona Science Center in downtown Phoenix that it’s not visibly obvious there is a recession, much less a depression.

“The restaurants are full. We are not really seeing it when we go shopping. There seems like there are still a lot of people shopping and eating out.”

Her husband has a secure job as a traveling nurse practitioner and is now working on the Gila River Reservation.

Scottsdale economist Elliott Pollack said it’s possible but not likely the country could go into a depression.

It’s too early to say, he said.

“Time will tell,” Pollack said. “But certainly the (federal) policy errors that would turn this into a depression don’t appear to be there yet.

“The economy is going to spiral down for the next six months at least.”

Marshall Vest, a University of Arizona economist, said it’s too early to say whether things will get worse.

“I think if the freezing we have seen in the credit markets continued for a long period of time, for a few years, then I think you could start to consider whether we are in a depression. However, we are very early in this financial crisis,” he said.

Vest added that the financial markets appear to have begun thawing over the past few weeks, and the stock market may have bottomed out in November.

He expects the economy to bottom out by the middle or end of the year.

“There is no question it (the recession) is severe and it will go into the record books as the worse since the depression, but that does not mean it is of the same magnitude.”

Arizona’s economy definitely got sicker in the fourth quarter, judging from the latest batch of state numbers.

Because federal and state data lag a month or more behind, the realities of what actually happened late last year are just now coming out.

Arizona motor-vehicle sales fell 44 percent and overall retail sales fell 15 percent in October, compared with a year earlier. That’s according to November taxable-sales reports from the Arizona Department of Revenue. Unemployment claims soared 80 percent in October and an even higher 104 percent in November in the state, the U.S. Department of Labor said.

September and October were nightmarish, with anincredible string of bad economic news, including the federal takeover of mortgage giants Fannie Mae and Freddie Mac, the bankruptcy of Lehman Brothers Holdings Inc. the passage of a $700 billion federal bailout package. Shoppers obviously pulled back in October, either out of insecurity or because they had lost their jobs.

Other badly hit retailers included automotive suppliers, down 25 percent; building-material, home-center, gardening and hardware stores, down 14 percent, and furniture and home-furnishing stores, down 12 percent. Sales at clothing, accessory and shoe stores also fell 11 percent.

The general-merchandise sector, which includes department, discount and warehouse stores (Walmart, Target, Dillard’s, J.C. Penney etc.) dropped 9 percent in sales.

Unemployment claims have been rising so fast that the state Department of Economic Security had to hire 45 temporary workers to help process them. Workers have been hired and are being trained. They won’t be able to begin taking calls until Jan. 22, department spokeswoman Liz Barker said.

Meanwhile, the workload keeps growing. Claims exceeded 10,000 a week for several weeks in December.

The minimum wage in Arizona rises to $7.25 an hour Thursday, thanks to a voter-approved increase that remains a flashpoint between those who seek living wages and those who say further job losses could result.

The annual increase is the third since voters approved the minimum-wage initiative by a 2-1 ratio in 2006. This year’s increase is 5 percent. At $7.25 an hour, the wage is up nearly 41 percent from December 2006 but still only about half of the state’s median wage of $14.25, according to the Arizona Department of Commerce.

Julie Kossak, a co-owner of three Zpizza restaurants and Pink Spot Ice Cream in Phoenix, said minimum-wage increases hurt small businesses. She has about 50 employees.

To get good workers, she has to pay employees more than minimum wage. And even though she’s not required to give a raise next year, she said minimum-wage increases pressure small-business owners to keep raising wages.

“I’m not a fan of it (a minimum wage) anyway,” she said. “I believe the market should take care of itself.”

Dana Kennedy, communications director for the Arizona AFL-CIO, which was involved in the battle for the 2006 proposition that led to the annual increases, said that even $7.25 is not adequate. She considers about $10 an hour to be a decent living wage.

One advantage of the increase, she said, is that the raise is likely to be quickly spent.

“Any increase the workers get will be put right back into the economy,” she said. “The problem with minimum-wage workers is they live paycheck to paycheck.”

Many opponents of an annual minimum-wage adjustment object to Arizona’s minimum wage being tied to the Consumer Price Index because it generally increases.

The Employment Policies Institute in Washington says that minimum-wage hikes reduce jobs for those who are the least skilled and who need jobs the most, especially young minority workers and high-school dropouts. It cites research estimating that for every 10 percent increase in the minimum wage, employment falls 8.5 percent for vulnerable groups. The raise would mean extra costs of about $85,000 a year for a company with 20 entry-level employees, the institute said.

Scottsdale-based economist Elliott Pollack agrees that raising the minimum wage takes a toll on entry-level jobs.

“If you have a minimum-wage job, yeah, it (a raise) helps you,” he said. “But it actually reduces the number of minimum-wage jobs available.”

He said such jobs are important for first-time workers because they teach basic skills like showing up for work on time.

But few workers hold minimum-wage jobs. The Arizona Department of Commerce says the bottom 10 percent of workers earned $7.57 or less in 2007.

Not all employees are eligible for the rate.

Tipped employees will earn $4.25 an hour, $3 below the minimum.

The current recession adds another question to the minimum-wage debate: What happens if the Consumer Price Index shrinks as the economy shifts from inflation to deflation? The Consumer Price Index in October fell 1 percent, the largest monthly drop in 61 years. In November it fell even more, 1.7 percent, largely because of the price of gasoline and other fuels, according to the U.S. Bureau of Labor Statistics.

Karen Axsom, investigation supervisor for the Industrial Commission of Arizona, which enforces the law, said she didn’t know what would happen because decreases were unanticipated.

“We are in some economic waters that we haven’t seen in decades, and so I think anything can happen,” she said. “But it certainly is not addressed in the statutes that I am aware of.”

———

2009: $7.25

2006: $5.15

2007: $6.75

2008: $6.90

Source: Industrial Commission of Arizona

Proposition 202

By a 2-1 margin, Arizona voters in 2006 approved a measure that raised the state’s minimum wage and then allowed for annual increases – to match inflation – that began Jan. 1, 2007.

These arguments in favor of the initiative were included in voting materials:

• “All working Arizonans deserve to be paid a minimum wage that is sufficient to give them a fighting chance to provide for their families.”

• “70 percent of Arizona workers earning the minimum wage are adults.”

• “More than 145,000 working Arizonans will benefit by increasing the minimum wage, half of whom are working women struggling to live on less than $11,000 per year.”

• “Increasing the minimum wage reduces dependency on taxpayer-funded public services.”

Source: Industrial Commission of Arizona

Arizona State University is getting $5.3 million to strengthen its business-journalism offerings, and with the economy making daily headlines, the timing couldn’t be better, journalism officials said.

Fallout from complex and non-transparent financial instruments have left economies reeling. That shows how important it is to train journalists to handle a more sophisticated business climate, said Andrew Leckey, ASU’s founding director of the Donald Reynolds National Center for Business Journalism.

Two grants from the Las Vegas-based Donald W. Reynolds Foundation will endow a faculty chair in business journalism, extend the contract for the Reynolds Center for three more years beginning in mid-2009 and create special undergraduate and graduate degrees in business journalism. ASU will be one of only a handful of universities offering business specialties in journalism.

“We have had recessions before, but I think this is a year for real soul-searching for everyone about money and finances and debt and how our futures are affected by the whole global financial system,” said Leckey, who will become the endowed chair and president of the center.

Since it was founded in 2003, the Reynolds center has trained about 8,000 reporters and editors at seminars around the country to help them better understand financial operations, annual reports, balance sheets and other business matters.

But it became clear that students needed more training specifically in business journalism as graduates or undergraduates so they could be more confident when working business stories, Leckey said.

“The magnitude of this (economy) has really unleashed the journalist of the future. I think it is no-holds-barred now. We hope to have tenacious graduates who don’t hate business but who are knowledgeable about it and can explain it,” he said.

Christopher Callahan, dean of Walter Cronkite School of Journalism and Mass Communication at ASU, said the business specialty will better prepare journalists.

“To really write and report (on business issues) well, you really need to understand them,” Callahan said. “And we do think that requires a different level of sophistication and nuance than the typical general-assignment reporter we train here.”

The Reynolds Foundation currently has one business journalism chair, at Washington and Lee University in Lexington, Va. It is adding three more: at ASU, the University of Missouri-Columbia and the University of Nevada-Reno.

They will be coordinated by the Reynolds center at ASU.

The foundation also will fund the Reynolds High School Journalism Institute, which will bring 35 high-school journalism advisers from around the country to ASU each summer for training.

The Reynolds center is in the $71 million Cronkite building in downtown Phoenix, which opened in August.

When you hear an economist is being honored for being one of the most accurate forecasters in the country, naturally you have ask him when will we see the end to these endless foreclosures, bailouts, triple-digit bouncing stock markets, tightwad shoppers and comparisons to the Great Depression?

Joel Naroff, a Philadelphia economist being honored in New York City Thursday , says a turnaround could come next year if consumers, banks, businesses and investors would just stop overreacting. He analyzes the economy with as much psychology as math and attempts to see past emotion, uncertainty and fear.

While he said it’s impossible to be absolutely accurate in today’s weird economy, he believes that once people start to see that things aren’t getting worse sometime next year, they’ll start shopping again vigorously.

“While there is a lot of reason to be concerned right now, I think people are overreacting to the situation,” he said. “When the psychology changes, you will wind up getting a stronger reaction in the economy than basic economic factors would argue for.”

Naroff, president of Naroff Economic Advisors, was selected by Arizona State University’s W.P. Carey School of Business to receive the 2008 Lawrence R. Klein Award.That recognizes him as having the most accurate predictions from 2004 through 2007 among 50 economists who forecast for the Blue Chip Economic Indicators published by Aspen Publishers in New York City. Naroff also will be the keynote speaker at the 45th annual economic forecast lunch sponsored by JPMorgan Chase bank and the ASU business school Dec. 10 at the Phoenix Convention Center. Naroff has also been honored as a top economist by MSNBC and Bloomberg Business News.

Here’s what he has to say about some parts of the economy.

• Housing market. When prices come back down to where they were in 2002 or 2003, wiping out the unusual run-up in prices that occurred in 2005 and 2006, the market will settle down. In Arizona, prices have dropped back to their 2004 levels, according to the Arizona Regional Multiple Listing Service, so he says we probably have about another six months of price drops to go.

“The housing market in large parts of this country is really not that bad,” he said.

One reason Naroff was so accurate about how bad the economy would get in the last few years is that he visited Phoenix in September 2005 and read a newspaper article that quoted Realtors predicting prices would continue to rise. He spotted a bubble and was able to predict what would happen when it burst.

“I really came face to face (in Phoenix) with what the excesses of the market were, and the idea that so many people thought that this housing boom could just go on and on and on. That was the start of the idea of looking at what ultimately could be a collapse in the housing market.”

But he was caught by surprise, as was everyone else, at how the mortgage mess ballooned because it turned out the risks had been spread and intertwined with financial companies around the world.

• Financial markets. A major problem in the housing market is that lenders are reluctant to give mortgages to borrowers who are a “reasonable risk. It is those people who are “the difference between a weak and a decent market.”

Still, he understands why lenders are being cautious.

“The reason is they simply can’t afford to make another mistake. Their losses were so huge and their financial situation so tenuous, they overreacted.”

• President-elect Barack Obama. Having Democrats ruling both the White House and Congress means we should see more action.

“Having a Democratic Congress, you are going to have much more aggressive action coming out of Washington D.C.. Yes, there will be mistakes made and there will be a lot of money wasted. There has already been a lot of money wasted,” Naroff said.

“We may be able to get more things done and get us going a little sooner. I’m not saying everything will be done right. It will not. But so much has to be done. Having the same party will be an advantage.”

• Unemployment rate. He predicts the national unemployment rate, which reached 6.5 percent in October, will peak at 7.5 to 7.7 percent next year. But he said no one can be certain about that because of the emotions ruling the market today.

“Businesses are doing everything they can to survive these circumstances, so we could see an overreaction,” he said.

• Next year. What is likely to happen is that the economic indicators are bound to be better than this year and start to make people feel better, Naroff predicts. If auto sales, for example, increased from this year’s expected dismal 10 million to 14 million next year, that would still be a weak market by historical standards. But it would be a 40 percent increase and possibly enough to restore the country’s confidence.

Auto sales have dropped drastically in Arizona, and lots are filled with vehicles, especially gas-guzzling trucks.

Charting the rise and fall of car and truck sales is a simple way to gauge the health of the economy.

When we feel good about our prospects, we buy.

When fearful, we hold back.

This year, a huge run-up in gas prices was followed by weeks of financial crises. Combined with uncertain job prospects and declining wealth, it created one of the toughest markets in decades.

Vehicle sales have dropped so sharply that one analyst wonders how many people are just going to hold on to their vehicles until they fall apart.

In September, taxable sales of new and used motor vehicles were down 29.8 percent from a year earlier, the Arizona Department of Revenue reported Thursday.

The skid in sales puts pressure not only on automakers, auto dealers and their employees, but on state and local governments, which count on the sales-tax revenues.

Arizona auto dealers are fighting back, offering deals that include incentives of up to $10,000 on some vehicles and zero-percent financing. Prices have fallen back to levels of five or more years ago, especially on pickup trucks. And dealers emphasize that credit still is available.

Although it will be awhile before October vehicle-sales numbers are reported, some evidence indicates that the incentives are working.

Postponable purchase

This decade, vehicle sales have run about 16 million to 17 million units a year. J.D. Power and Associates, a marketing-information services firm, predicts sales will fall to about 13.6 million units this year and 13.2 million units in 2009.

That’s approaching a “scrappage rate,” or a basic market where most purchases are just replacements for vehicles that are ready for the junkyard because they got too old or were destroyed in an accident, said Bob Schnorbus, chief economist with J.D. Power in Detroit.

Reasons for the slide in auto sales include gas prices, declining consumer confidence, the credit crunch and a manufacturers’ trend away from offering leases.

Schnorbus said the slowdown can be traced to early in the decade, when manufacturers offered major incentives and boosted sales of new cars and trucks so much that many people didn’t need to buy vehicles for a while. In mid-decade, manufacturers started cutting back on fleet sales and leases because they decided neither was that profitable.

Knox Ramsey, a veteran of the auto industry and president of the Valley Auto Dealers Association, said he has seen a link between auto sales and consumer-confidence surveys for the past 40 years. “There are more parallels with those two than anything else,” he said.

On Tuesday, the U.S. Conference Board reported its monthly Consumer Confidence Index had reached an all-time low.

Economic shifts

The drop in vehicle sales is affecting a broad part of the U.S. economy.

Motor-vehicle sales account for about one-fifth of all retail sales, according to the National Automobile Dealers Association.

The slowdown and decrease in vehicle sales-tax revenues is a major reason that state and many city budgets are in trouble, forcing service cuts and layoffs. If the trend toward less expensive, more fuel-efficient vehicles – think Prius vs. Hummer – becomes permanent, sales-tax revenues may not immediately recover in an upswing.

First to feel pain

In Arizona, vehicle sales have been falling for 20 months. This year, they began sinking at an accelerated rate.

Mike Breyfogle, general manager of Tempe Dodge, said the Arizona declines in 2007 were telling everybody where the economy was heading.

“My take is that the sales side of the car business has always been the first to feel it getting tight,” he said.

Some stores have closed, including two Bill Heard dealerships in Scottsdale and two AutoNation Inc. stores: Power Pontiac/Buick/GMC in Scottsdale and Power Chevrolet in west Phoenix. Dan Grubb Ford in Phoenix consolidated with Pioneer Ford in Goodyear.

Dealers say they are surviving by reducing inventory as best they can and controlling expenses.

Although there have been some high-profile closings, the number of dealerships has increased, according to the Arizona Motor Vehicle Division. In mid-October, there were 2,488 dealerships in Arizona, compared with 2,468 in fiscal 2003-04, the MVD said.

Ramsey said the number of dealers reflects growth in the Phoenix area, especially along the new freeways.

Latest challenge

Sales of motor vehicles have been falling nationally since 2005, just about the time the housing market crested, according to J.D. Power.

Then, as consumers confronted falling home prices and mortgage issues, gasoline prices began rising to the $3-a-gallon level late last year, then surpassed $4 a gallon in the spring before falling back.

Customers not only stopped buying gas-guzzlers but began trading for more efficient cars or bought second vehicles.

In some ways, that spurred purchases. Monte Yocum, general manager of SanTan Honda Superstore in Chandler, said he had his best sales month of the year in July.

But Nathan Riggs, finance and insurance manager at Berge Ford in Mesa, said some customers lost thousands of dollars on trade-ins because they owed so much on the vehicles being traded.

Carlos Gonzalez, 29, and his wife, Ivonne Medina, 27, of Maricopa, tried to trade in a 2008 Nissan SUV for a Honda sedan but decided it would be cheaper to keep the SUV.

“They wanted to take the car and for us to pay them another $10,000,” Medina said.

Credit crunch

Just as gas prices began falling, freeing some cash for consumers and easing worries about higher-mileage cars, credit markets tightened.

GMAC Financial Services, financing arm of General Motors Corp., said this month that it would finance purchases only for buyers with credit scores of 700 or higher.

Steve Moore, general manager of Peoria Pontiac GMC Inc., said: “Banks are just looking harder at anyone with less-than-stellar credit. It just makes it more difficult to do business.”

But Ramsey said most buyers aren’t going to be affected by credit restrictions. About 73 percent of auto sales are already to people with scores of 700 or higher, he said.

Commercial sales to businesses are facing tougher credit obstacles than consumer sales, Breyfogle said. “On the commercial side, we (Tempe Dodge) had 12 deals last month (September) we couldn’t fund.”

Great deals

If you have a job, good credit and confidence, it’s a great time to buy.

“The prices for a lot of our new stuff, you’re talking five- and 10-year lows on almost everything,” Breyfogle said. “I have new (Dodge) Ram pickups selling for $1,000 less than I sold them in the mid-1990s.”

Chris Guerrero, principal at SanTan Ford in Gilbert, said the F150 pickups may have a dealer price of $32,000 to $34,000, but after incentives, the price drops to about $22,000 to $24,000, comparable to six or seven years ago.

“We are having one of our better truck months compared to the last four to five months,” he said. “Now that incentives are better than they ever have been, people are taking advantage.”

Libby Krum, spokeswoman for the American International Automobile Dealers Association, said Toyota’s offer of zero-percent financing appears to be drawing buyers.

“The truth is, most people can qualify for credit. It’s not quite so bad as people make out,” she said.

Initial claims for unemployment insurance in Arizona jumped 41.5 percent in August compared with the same month a year earlier as slower job growth continues to take its toll.

Retail sales fell again in August compared with 2007, but the dip was not as bad as in July, according to this month’s Republic Arizona Economic Snapshot.

Other indicators offered a mix of good and bad news.

• The number of homes sold rose again in August compared with a year earlier, offering hope that the housing market may have bottomed. Although the Arizona Regional Multiple Listing Service’s numbers don’t show September totals yet, one Realtor said last week that 6,136 homes were sold in September, the highest in about two years.

But the median price has fallen back to a level not seen since late 2004, ARMLS says. The housing bubble that started in 2005 may have completely burst, wiping out millions of dollars of equity but also making homes more affordable.

• The total number of non-farm jobs increased slightly in August because of seasonal back-to-school hires, but the Arizona Department of Commerce expects the state to lose almost 2 percent of its jobs this year and next.

• Auto-sales receipts tumbled 30 percent from August 2007 but recorded a slight increase from July.

• Gasoline prices fell for the third straight month in September. The number of gallons of gasoline sold also has been falling and is at the lowest point in at least four years, hurting the state’s Highway User Revenue Fund, which pays for roadway construction and maintenance. Motorists pay 18 cents for every gallon of gas they buy to the fund.

Doug Nintzel, a spokesman for the Arizona Department of Transportation, said people are driving less and using more fuel-efficient vehicles.

Arizona’s tax structure puts it in the middle of the states for being friendly to businesses, but its ranking was dragged down by sales taxes considered too high and exclusionary, according to a Tax Foundation report released today.

Overall, the state ranked 24th in the Washington, D.C.-based foundation’s 2009 State Business Tax Climate Index, a drop from 22nd in the 2008 index.

The state got high marks for having relatively low property-tax and unemployment-insurance rates, said Joshua Barro, a staff economist. Arizonans, for example, pay an average of $993 in property taxes compared with a national average of $1,313.

But the average resident pays about 7.7 percent in state and local sales taxes on many items. That’s the sixth-highest in the country, he said.

Barro also considers the state’s sales tax too dependent on a narrow base and discretionary items and not enough on necessities. While cities and towns usually charge a sales tax on groceries, the state does not. There is a state excise tax on gasoline to pay for road construction and maintenance, but not a general sales tax.

“A lot of the things that are excluded tend to be necessity items where expenditures change less in a downturn,” he said.

Arizona faces a possible deficit in the state budget this year of $550 million to $1 billion, largely because of cutbacks in sales-tax revenues from high-priced vehicles and appliances. Taxable sales of motor vehicles fell 30 percent in August, to $501 million, compared to a year earlier.

Barro said the state could probably reduce its tax rate and collect more revenues by taxing more items and services and spreading out the burden.

Taxing food is politically sensitive, Barro added. Idaho gets around that by taxing food but offering low-income people a tax credit, he said.

Wyoming was judged to have the best tax systems for “business friendliness” and New Jersey, the worst. California ranked 48th, but some other Western states ranked in the top 10: Alaska, Montana, Nevada and Oregon.

Longtime registered nurse Ray Williams takes care of Judith Loudon at Scottsdale Healthcare. Williams, 60, got the job three months ago and works the standard three 12-hour shifts a week. Health care is a field friendly to older workers.

More employers now realize they need to recruit and retrain older workers – especially Baby Boomers. But many aren’t sure how to go about that.

And at the same time, mature applicants are seeking jobs in drastically changed workplaces that have gone global and digital on them, while often worrying that every rejection is due to their gray hair.

The job market is facing unprecedented tensions as millions of older workers decide they want to postpone retirement and keep working, perhaps at a slower pace, while many employers are seeking sharp, technologically skilled employees who can help them innovate and compete at a fast pace.

Fortunately for older workers, the subject has been getting a lot of attention. Plus, some industries are growing so fast that they almost certainly will need to consider or rely on experienced workers for part of their labor pool. They include health care, education, hospitality, energy and utilities and information technology.

Companies are looking at options such as flexible scheduling, paying for training and phased retirements, to keep or lure experienced workers. About 70 companies have sought certification as being “mature-worker friendly” under the Arizona Mature Worker Initiative, a new state program.

And job applicants are brushing up on their computer skills, learning how to file resumes online and using social networks and online job boards through groups like Boomerz, the Scottsdale Job Network and the Center for Workforce Transition at Gateway Community College.

It can be intimidating for some older workers seeking jobs.

Jeffrey Matz, 66, an attorney looking for work, said that when he goes on interviews, “I am faced usually with a 30-something who can’t relate to me at all. They come from a different generation. They have different ideas about work ethics. They have different ideas about lifestyles. They see me as sort of an alien.”

Although older workers may feel they are being put out to pasture or soon will be, statistics show that they hold on to their jobs well, even during this economic slowdown.

Employment among those 55 and older grew by 3.7 percent, or about a million, from July 2007 to July 2008, while the number of 20- to 44-year-olds working fell by 1.3 percent, according to the U.S. Bureau of Labor Statistics.

John Challenger, chief executive officer of Challenger, Gray and Christmas, a Chicago employment company, said this is not just because the population is aging but these older workers are apparently needed.

“It’s pretty amazing,” he said. “The Boomer generation is the most healthy generation yet to reach that age (bracket).”

Most of the older-worker job gains were in management, professional and related occupations, indicating that companies may be relying more on seasoned veterans to get them through the struggling economy, Challenger said.

He and other employment experts said skills that mature workers can offer include problem solving, quality control, customer service and customer relations, research, process improvement and, especially, dealing with disasters.

Receptiveness of health care

Health care is at the top of the list of fields receptive to older workers, because of a “huge shortage” of health-care personnel, said Judie Goe, director of recruitment and compensation for Scottsdale Healthcare.

“While we do have a good influx, a good pipeline of younger, newly trained people getting in the workforce, it’s still not meeting the demand for health-care workers, particularly in the clinical area,” she said.

Scottsdale Healthcare, which operates three hospitals in Scottsdale, offers options such as flexible scheduling, job sharing and working from home when appropriate to keep and recruit older workers. It was the only Arizona company honored by AARP last year with a Best Employers award for being age friendly.

Ray Williams, 60, who has been a nurse since 1976, joined the company as a nurse three months ago and still works the standard three 12-hour shifts a week. Scottsdale Healthcare is offering more nurses the option of working two 12-hour shifts or less.

“Yes, it’s physically hard, but it’s about pacing yourself and using time management,” he said.

Williams advised a friend, who was laid off from a mid-management position and had run out of unemployment benefits, to go into health care. The friend, 55, now works as an ultrasound technician.

Another field receptive to older workers is information technology, even though industry insiders say it’s often viewed as the domain of younger workers.

“As you get into large systems, you need people to manage them, and mature workers are much better at that. They had a lot more experience,” said Bill Austin, 52, a former Motorola engineer.

“I have been involved in the Internet and Web since the beginning. I was the Web master at Motorola the first five years there was such a thing.”

Patrick Hanley, 66, is in charge of franchise sales operations at DataPreserve, a Scottsdale company that backs up computer files. He said, “I think to classify generally that Boomers don’t understand technology is a misnomer, a misstatement because we’re the ones who brought the computers to age today that the younger people are using.”

Jim Morand,the nearly 71-year-old founder and chairman of Data Preserve, encourages older people to consider technology fields.

“We have a real need for good people. And anybody that’s willing to learn the basic technology and comes prepared can find a job in this business,” he said. “But it goes back to are you willing to retrain yourself to do it?”

He was 65 when he went to New Horizons Computer Learning Center to learn about computers and technology so he could start his company.

ris Jensen of Wisdom Workers Solutions, a Des Moines, Iowa-based non-profit online group aiming to help employers and applicants deal with aging and work issues, said other fields friendly to mature workers include utilities, hospitality, education, and government.

“Jobs that have a customer-service element oftentimes are more friendly to that older worker because they (workers) are very dependable, and they are very good in public service,” she said. “Consultants in project work is another place where these people are fitting in. They are great at research, problem solving, process improvement and quality control.”

Utilities are focused on retaining experienced workers, she said, because they have been through crises before.

“They (older workers) have more knowledge of utilities and how to deal with catastrophic events,” Jensen said. “And until they (utilities) can get that knowledge transferred to younger workers, they really don’t want to lose that incredible knowledge in the process.”

The push to think gray

By 2012, nearly 20 percent of the total U.S. workforce will be 55 or older, up from just under 13 percent in 2001, according to the Monthly Labor Review.

Surveys have said that many Baby Boomers, who began turning 62 this year and applying for Social Security, want to keep working toward traditional retirement ages. Nevertheless, companies are concerned about their eventual departure.

A 2007 survey by Robert Half International of 150 senior executives with large companies found that 47 percent said Baby Boomer retirements will have the greatest impact on the workforce over the next decade.

Efforts have begun locally and nationally to educate companies in Arizona about how to change their employment and recruitment practices to lure and keep older workers.

The Arizona Mature Worker Initiative, started in 2005 by Gov. Janet Napolitano, received about 70 applications from companies that want to become certified as mature-worker friendly. This is the first year the certification is being offered.

Representatives from the companies will be trained in October and November.

Melanie Starns, the governor’s policy adviser on aging, said the 70 companies represent all fields and large and small business and everything from construction to health care to RV campground hospitality.

Boomerz, a non-profit group trying to help Baby Boomers find jobs among other things, also works to educate companies about how to be more welcoming.

“A lot of Boomers don’t want to be tied to a desk job for 50 hours a week,” said Matz, a volunteer with the group. “They want to work maybe 30 hours a week. Maybe they want to work from home. Maybe they want to work just on a particular project as a consultant. So it will require flexibility on the side of the Boomer and the company.”

Encouraging positive attitude

Looking for work can be traumatic, especially for older workers thrown into job searches after decades of employment, who now have to deal with a process that includes online resumes, social networks and job search sites like CareerBuilder.com, Jobing.com and Monster.com

“For most Boomers, when they entered the workforce, it was nothing like it is now,” said Jan Davie, director of Gateway College’s Center for Workforce Transition. “Now it is 24/7 and global.”

The center, which really got rolling in January, has been bringing employers and Boomer applicants together for several programs. It offers training, including computer skills, speed-dating-like sessions to teach applicants how to quickly summarize their skills, occasional job fairs and Boomer internship programs.

So far this year, 839 Boomers have registered for services, 438 have gone through training programs and 48 landed jobs, Davie said.

Several applicants getting job tips at a recent Scottsdale Job Network event said they are often discouraged because they feel like companies want younger workers.

Challenger advises clients to try to get past that and to not to take the rejections personally.

“All a job search is from the day you begin until you land an offer you want to take is one company after another telling you ‘No.’ Most of the time there’s a lot of candidates competing, and your odds of getting selected are very low in any given situation,” he said.

He said there is age discrimination, adding that most people in America are in “one protected class or other.”

“If I am Black, I am feeling like it (rejection) is because of that. If I am gay, it is because of that. If I am a woman, it’s because of that,” he said. “So I think most of us do face some discrimination, and you can’t let it become the overriding reason and let it become self defeating.”

Hanley said he was out of work about six months and landed his job at DataPreserve four years ago by networking. “Of course, you get discouraged, if you don’t get it,” he said. “But I didn’t give up and I smiled all the time so that people know I am a good guy. But it was definitely through the networking.”

Kevin Lemon, 60, of Scottsdale, who recently conducted job searches, also believes in personal interaction.

As for all the advice about using the Internet, he said, “It is just a lot more information, and I am not sure it is any better than the old-fashioned way, using a group like this (Scottsdale Job Network). It’s like anything else in life. It’s who you know.”

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More on this topic

10 friendly careers for Baby Boomers

• K-12 schoolteacher.

• Registered nurse.

• Pharmacist.

• Clergy.

• Bookkeeping, accounting or auditing clerk.

• Real-estate appraiser or assessor.

• Archivist, curator or museum technician.

• Chief executive officer.

• Landscape architect.

• Personal and home health-care aides.

10 other careers to consider:

• Medical assistant.

• Pharmacy technician.

• Library technician.

• Surveying or mapping technician.

• Bill or account collector.

• Loan counselor.

• Public-relations specialist.

• Interior designer.

• Animal caretaker.

• Floral designer.

Source: AARP Crash Course in Finding the Work You Love.

Where older job seekers are most welcome:

• Health care.

• Teaching.

• Consulting.

• Non-profit organizations.

• Customer service and customer relations.

• Small businesses.

Source: Challenger, Gray & Christmas Inc.

Arizona Blue Chip forecasters remain pessimistic about the state’s economy this year and next despite some encouraging news.

“Although there are scattered signs that the economy may be close to bottoming out, there is little optimism about an actual upturn in key Arizona indicators during the second half of this year,” said the monthly Arizona Blue Chip Economic Forecast produced by the W.P. Carey School of Business at Arizona State University.

The few “skimpy morsels” of good news include lower fuel prices, an increase in consumer confidence and a 3.3 percent increase in the national gross domestic product in the last quarter.

But the biggest problem is the weak housing market and downward pressure on home prices. The Case-Schiller Index suggests prices have been falling about 2.5 percent a month and are just 14 percent higher than in 2004, Blue Chip said.

Blue Chip panelists also said the Federal Reserve should be more concerned about recession than inflation in the next 12 months. And 88 percent predict the Fed will try to raise short-term interest rates in the next year.