At right, Vincent Gagliostro, a freelance video filmmaker, in Paris with his partner, Richard Nahem. When Gagliostro moved to France two years ago, he worked for a base of clients from the United States, but he is now trying to diversify to earn euros. (Richard Harbus for the International Herald Tribune)
The Herald Tribune has an excellent story by Doreen Carjaval on the cover of Saturday’s issue about expats getting paid in dollars and struggling with the bad euro exchange. There is a picture of me and my partner Vincent on page 13 and we are also in the story. (Sorry if I look a little different than my disco glory photo from the other day).I am sure I will be remembered for this quote:"When it comes to pastries," Nahem explained, "there's no price resistance for me."
Doreen interviewed us last week over a long and fruitful lunch at my favorite neighborhood restaurant Chez Janou. Below is a reprint of the article and I've higlighted the part about us. Enjoy!
Paid in dollars, expats struggle to make a living
By Doreen Carvajal Published: December 14, 2007
PARIS: Erica Nevins's faith in the dollar was shaken the moment she pressed a crumpled $1 bill into the hand of a little girl begging for money on the streets of Marrakesh, Morocco.
"I don't want this. This is nothing," Nevins recalled as the scornful reaction of the child, who demanded more.
Since then Nevins, an American fashion executive, has replayed that moment over and over in her head as she confronted the harsh reality of living on a dollar income in Paris and then moving to pricey London. "The absurdity of this is that it's so true," she said. "A dollar really means nothing. It's scary."
With plunging exchange rates, American expatriates whose pensions or incomes are paid in dollars are scrimping. No more dinners out when a bottle of Perrier for €3.50 translates to $5 and no more Christmas shopping binges when a shiny iPod for €159 is the equal of $230.
And ultimately some are moving to greener pastures that match the color of their money.
"Those that can hold out are holding their breath and we're hoping for a return of the dollar, but those that can't are going," said Susie Bondi, an American who has lived in Paris for 12 years, but is moving to Vienna in January with her husband, Fred, to stretch their pension dollars in a city with a lower cost of living.
The past six months have been anxious for expatriates, with the dollar sinking against the euro, the pound and currencies from the Czech koruna to the Costa Rican colón. Those declines are accelerating the flight of expatriates in Europe, according to tax attorneys who listen to the woes of clients who are giving up because they see no relief in sight.
The zeitgeist is best summed up by the rapper Jay-Z who last month released a music video of himself cruising the streets of New York in a shiny Bentley with a flash wad of €500 notes.
Even U.S. government employees are feeling the pinch in countries with strong currencies like the Czech Republic, where the koruna has gained 17 percent this year against the dollar.
Radio Free Europe, the U.S.-backed international broadcaster headquartered in Prague, is suddenly facing a housing crisis for many of its 500 employees. And the news organization's new chief executive, Jeffrey Gedmin, ranks the weak dollar with attacks on journalists around the world who have been kidnapped in Baghdad and jailed in Azerbaijan as one of the critical issue that it is facing.
"For me it's become an ethical issue," said Gedmin, who was in Washington this month lobbying U.S. legislators for relief and trying to raise funds privately to aid hard-hit employees. "I have a genuine ethical issue to take care of people who are trying hard to take care of their own countries."
Employees who have long been paid in dollars pumped the money into the local economy and to landlords who in the past gratefully accepted dollars when the currency was strong.
Now most of the organization's employees living in Prague are being pressured to convert rental contracts from dollars to korunas and have received notices about imminent rent increases. One landlord raised an employee's monthly charge from $1,000 to $1,500 and took away his basement storage space to rent it out.
The impact of the sagging dollar has been particularly acute for expatriates who live on fixed pensions paid in dollars or self-employed workers whose clients are largely based in the United States.
Josh Soski moved from San Francisco to Barcelona in September to start a freelance video production company that supplies clients like Current TV in the United States with short video features on European stories.
These days, he said, he finds himself sitting on his bed, with his head in his hands, obsessively checking currency rates on his laptop. "They pay us $2,500 for a piece, and you cash it in and it's €1,400 or less. That's shocking," said Soskin, who finds himself debating whether to splurge on a €3.50 bottle of water at the airport or indulge in a can of his favorite Mexican black beans at €4.
To survive and hedge currencies, Soskin is now scouting for European clients who will pay him in euros. Other self-employed workers - from medical translators to online entrepreneurs - are simply cutting off their American clients because it is no longer worth working for them.
Vincent Gagliostro is a graphic designer and freelance video filmmaker who left the New York advertising industry two years ago to settle in the Marais neighborhood in Paris with its promise of cheaper living that reduced his monthly housing costs from a $6,000 mortgage to an 18th-century apartment rental for €1,700. When he first moved to Paris, he said, he worked for a base of clients from the United States, but he is trying to diversify to earn euros.
"The dollar still heavily weighs on the quality of my life. As long as I continue to rely on at least 50 percent of my income with American clients, it's going to do that," Gagliostro said while dining on a simple €10 brasserie lunch of pasta and chicken.
Gagliostro's partner, Richard Nahem, a Brooklyn native, has also sought to supplement their income by offering customized tours of the Marais, but his new business, Eye Prefer Paris Tours, is dominated by Americans and Canadians who pay him in a mix of euros and dollars. To economize, he has cut back on his own indulgences, such as clothing purchases. But he cannot resist his favorite high-end patisserie, Gérard Mulot, where a chocolate éclair costs €2.80.
"When it comes to pastries," Nahem explained, "there's no price resistance for me."
Many companies with American executives posted abroad are starting to seek advice on how to deal with currency depreciation, according to Achim Mossman, managing director for international executive services for KPMG, a tax advisory firm. In the future, he expects more American companies to pay their employees abroad with local currency, and he is also advising companies to follow calculated formulas to measure the cost of living standards to make salary adjustments.
Some employees have successfully pressed their companies to shift from dollars to local currencies. Nevins, who was paid in dollars while living in Paris, changed her income to pounds when she moved to London earlier this year.
"I wouldn't be working for this company if I was paid in dollars," she said. But Nevins still cannot resist making constant mental calculations to measure the price of everyday purchases in London. "Everything from a cup of coffee to going to the movies is so much higher," she said. "An adult movie ticket can range up to $26 and in terms of the holiday season, my boyfriend and I are doing all our shopping online in the United States. We're not thinking of shopping here."
That kind of currency fever invades daily thinking, according to some expatriates, who cope by not thinking about exchanges. Others say the downward spiral has become a basic part of life.
One expatriate from Madrid recently received an e-mail from a relative in Costa Rica who wrote about the tragic circumstances surrounding the fatal heart attack of a cousin and the cremation of her remains. And then the correspondent closed with a simple last line: "And also, as normal, the dollar fell today against the colon."
I am pleased as punch to announce the launch of Eye Prefer Paris Tours, which are 3-hour walking tours I will personally be leading. The Eye Prefer Paris Tour
includes many of the places I have written about such as small museums & galleries, restaurants, cafes & food markets, secret addresses, fashion & home boutiques, parks, and much more.
I look forward to meeting you on my tours and it will be my pleasure and delight to show you my insiders Paris.
Check it out at www.eyepreferparistours.com
