Pawn Shops: The Newest Growth Industry

(8:00PM EST – promoted by Nightprowlkitty)

It’s refreshing to see that some businesses are doing well in today’s economy.With so many opportunities for new shop owners to pop up, it’s nice to see shop for sale signs taken down to make way for new business. Perhaps the most successful venture going today is the pawn shop. From Peoria to Pasadena, pawn shops are seeing a boom in clients.

Says Doug Robinson, a pawn shop owner in Pasadena,

We’ve been on a continuous uphill run for a number of months. I don’t see anything that will stop it.

Worse even than the paycheck advance loans, a pawn shop loan typically involves an annual interest rate in excess of 50%. Yes, that is fifty percent per year. In Mississippi, the cap is 25% per month, which is 300% per year (if not compounded monthly).

Given that credit card debt is often 18% or higher, it is incredibly sad to imagine the poor soul who pawns an object at 50% interest to pay that very same object off on the 18% credit card debt.

People are squeezed badly. Gas prices are skyrocketing, unemployment is creeping up, and credit availability has evaporated. What’s left? Pawn shops.

More from the LA Times article:

Back at the Crown City pawn shop, Robinson, the owner, said his vantage point on the economy suggests that people need money just to get by, but they’re having a hard time getting it from banks. A lot of the time they have a poor credit rating so they don’t qualify for any type of loan. I’ve overheard a few conversations where people have asked others “what credit card can I get with no credit?” to help them make ends meet.

From Peoria:

More and more working-class Peorians are stopping in to hock their jewelry or electronics at the Jefferson Avenue business so they can keep driving until the next payday, said John Balaco, the shop’s owner.

“We hear constant complaining about the price of gas,” Balaco said. “It’s killing these people.”

The euro is above $1.50. Gold is around $900/ounce. Oil, well… Bush’s version of “ownership society” appears to be let the rich own the rest of society. In the meantime, the rest of us are just trying to get by.

From Jackson, MS:

Don Smith dropped by the pawn shop this week after a horse kicked him in the shin.

Smith, 49, of Jackson brought with him one of the guns he owns: a black hunting rifle with a scope that he exchanged for a $200 loan from the pawn shop in Pearl.

“I got kicked three weeks ago and haven’t been able to work since,” Smith said as he fingered his newfound cash in the lobby of USA Pawn & Jewelry. “I’m doing this to hold on.”

Firearms are among the most frequently pawned items at shops in the Jackson area – toted in by people mired in hard times or racked by the high costs of gasoline and groceries.

In the face of an ailing economy, business is up 30 to 35 percent at USA Pawn, business partners Brian Smith and Nick Fulton said.

When things are this bad, people pawning jewelry to buy four gallons of gas or pay their phone bill, you’d think the candidates would have many substantive offerings on helping the American people. Senator McCain, in fact, has much to say on the economy.

I’m going to be honest: I know a lot less about economics than I do about military and foreign policy issues. I still need to be educated.

That education clearly shines through in his analysis of Obama’s tax plan.

Under Sen. Obama’s tax plan, Americans of every background would see their taxes rise — seniors, parents, small business owners, and just about everyone who has even a modest investment in the market

So, Senator McCain, with all that economic well-versedness, how do you explain this:

The analysis

First, Obama. Under his proposed tax plan, the super-rich (around 140,000 households or the top 0.1% of the US population) have a lot to worry about if he becomes President. In fact, in 2009 the top 0.1% will pay roughly $701,885 MORE in taxes than they do currently. If you’re making over $2.9 million a year, your taxes will increase to 39.2%.

The middle-income earners (the middle 20% of the US, earning between $37,595 and $66,354) do a lot better under Obama, getting a boost of roughly $1042, or around 2.4%.

And the low-income families (the poorest 20%, earning below $18,981) get the biggest boost of all. They’ll be around $567 better off, an increase of 5.5%.

Now McCain. Under his proposal, the super-rich get a little richer. That same 140,000 households get a 4.4% increase in after-tax income, equating to around $269,364.

The middle-income earners get a boost with McCain too, although much smaller. They’ll receive a 0.7% increase, or $584.

And the low-income families, well, McCain does offer them some relief. But not much. Around a 0.2% increase in after-tax income, or a whopping $21.

The following chart shows the tax relief (up) or additional burden (down) discussed above.

Meanwhile, the GOP fiddles while America pawns.

My apologies for crossposting at the GOS.


Skip to comment form

  1. give me a tip, please.  Even if it’s a stock tip.

  2. Thanks for this, bubbanomics.

    Worth repeating:

    Meanwhile, the GOP fiddles while America pawns.

    I’m very unhappy with Obama and not surprised that I’m unhappy.

    But I’m voting for him for the very reason you point out regarding his economic plan, among other common sense domestic plans in his agenda.  And that at the very least he won’t obstruct legislation that helps real people.

    Guess that means I’m not a purist.

    • RiaD on June 27, 2008 at 01:49

    the title made me think of an article i read….it was something about the ‘ramendex’…watching stock in ramen noodles…when ramen sales are up the economy sux, when ramen sales are down the economy is good!

  3. They neeeed tax relieeef…they’re suffering so much, these days:   Untold Wealth: The Rise of the Super Rich.

    The CNBC preview of the program scheduled to air later talks about the “opulent lifestyle” of the super-rich and profiles one of them.  The guy is shown giving a tour of his two-story garage, filled with cla$$ic/ Luxury Car$… The interviewer asks him:

    Interviewer:  What do you say to someone out there who’s trying to make it work every single day?

    Rich guy:  “…I don’t know what to tell them…I don’t want to apologize for it…”  

    Well, thankfully for him, if McCain’s elected-he won’t ever have to apologize or even give a second thought to those little people who are trying to make it work every day.

  4. to cross over from the dailykos.  His “oil maggot” and “tobacco worm” monikers are great.

    Check him out at when you have a coupla hours to kill reading weird stuff.

  5. One Upset Progressive’s Letter to the AFL-CIO:


    Couldn’t you even have demanded that Obama add one progressive economist to his current advisors as a pre-condition to endorsing him?  I mean, is it too much to ask that he actually hear the reasons people (and some PhD economists) feel the current trade agreements are destructive to the empowerment of the citizens of the U.S. and the world, as well as destructive to our economy, before he drips with contempt about how we’re just against trade?  Why, oh why, did you promise our shoe leather, scarce time and even scarcer dollars without getting proof from him that he would at least listen to some details of our point of view?

    I hunted all over the Internet for a respected economist who understands that we want good jobs, not British-style dole, and who is independent from both corporations and unions.  The best person I could find to explain our position without being accused of being bought is EPI’s L. Josh Bivens.

    Early in Obama’s campaign I believed his rhetoric so I spent most of my free time for a few weeks making campaign phone calls.  I put aside my worry about his remark about cynical working Pennsylvanians “clinging” to “trade” to explain economic troubles as though that is a delusion.  But then the Chicago Tribune published the list of his advisors, and I saw that the man only listens to people who lie about the effects of the trade agreements on our country.  I decided then that though I might be forced to vote for him because of how bad McCain is, I’ll be damned if I’ll be fooled into lying again for his campaign.  Or put myself out to get folks registered.

    It would have made a difference if you’d gotten him to show us the decency of listening to the economics behind our point of view.  But you didn’t, and he hasn’t, and you just lose our respect and look weak for going out for him while he stuffs his fingers in his ears.


    [Before everyone tells me that I need to register voters to build a progressive voting bloc, I’d like to explain why it wouldn’t mean diddly this year in the area of NY where I live.  We have a DLCer as a representative who’s been there since the formation of the nation, and nothing’s going to change re: Schumer & Clinton.  Local elections are held in the odd years.  Besides I just couldn’t stomach telling 18-year olds that their future depends on Obama.  By next year he will have so disillusioned the dewey-eyed youngsters that they will revert to not voting anyway.]

    • RUKind on June 27, 2008 at 08:32

    No misspell there. We’ve all been pwned by the neocon artists. Their total disdain for our collective will pisses me off to no end.

  6. I wrote a diary last April, One industry is absolutely ON FIRE under Bush, on the exceptional performance of the stocks of the three largest publicly traded pawn shop operators since the beginning of the Bush Administration.  Basically, if you had bought an equal amount of those three stocks (FCFS, EZPW, and CSH) at the beginning of the Bush Admin and held the shares until the time of that diary, you would have made a whopping 2000%+ return on your money!  Since last April, these stocks have all pulled back quite a bit, as the market as a whole has fallen and legislators have begun to train their focus on the practices of lenders of all stripes.

Comments have been disabled.