TEMPE, AZ — For many people, a pawn shop is a place to turn when money gets tight. For longtime pawn broker Michael Adler, it's also a window into the health of the economy.
And right now, he says the view is concerning.
"Tragic," Adler said when asked to describe the economy in a single word. "2008 was real bad during the housing market crash, but this is much worse."
Adler, manager at Tempe Pawn and Gold, has spent more than three decades in the business. He said customer traffic over the past year has reached levels he's never seen before.
The surge in business helps the shop's bottom line, but Adler said much of that growth is driven by financial hardship. Customers sell jewelry, electronics and other valuables, or take out loans against personal belongings. Adler said most are simply trying to cover rent, utility bills and groceries.
Adler said pawn shops have historically served as an economic barometer, and he believes the recent surge in business reflects growing financial strain.
He also sees more customers buying precious metals instead of traditional investments, a sign that some are seeking alternatives to a volatile market.
"They're diversifying their portfolio for the same reason people are coming in to pawn," Adler said. "The economy is so bad and unstable that they want to sell off some of their stock portfolios and put it into gold and silver."
A few miles away, another store with a more upscale clientele sees a different picture.
At Elite Fine Jewelers, Assistant Manager Jake Debs said business is also booming, with sales, purchases and loans all on the rise.
Some of that activity is tied to the high price of gold, which has encouraged customers to sell jewelry and bullion. Others are taking loans as a way to fund new opportunities.
"They're entrepreneurs, and so they want to pull some money out of something to put that into a new project," Debs said.
Debs said the economy is producing very different outcomes for different people.
"I have people that have been struggling for years, and this year was their year that they made it and were able to treat themselves," he said. "And then I have customers that it's the exact opposite."
