Staying afloat in ‘a lost decade’
Job seekers watch clock tick on benefits as poverty looms
John Grant is trying to stay positive.
He visits the WorkSource office in Spokane three times a week to apply for jobs. He’s taken a part-time, minimum-wage position as a janitor. And throughout his household – which includes him, his longtime “sweetie,” her adult daughter and two grandchildren – frugality is a necessity, not a choice.
Grant’s unemployment benefits are about to run out, and he’s barely keeping his head above water. Never someone who made a lot of money, Grant has been driven by the recession – which put his former employer into bankruptcy – into the ranks of the impoverished, at least as the government defines it.
“It’s ugly,” he said. “It’s really ugly.”
As top officials and financiers discuss whether the recession is formally over, the on-the-ground reality is this: The economic downturn is pushing more people into poverty. Nearly 40 million Americans lived below the federal poverty line in 2008, the most since 1960, although the overall population was smaller then. Many families that were already struggling, or “chronically poor,” are finding themselves sinking into what experts call “deep poverty.”
For those families, recovery is still a long way off.
Recent research shows that, on average, workers who lost a job during the recession of the 1980s never regained their previous level of income. The typical layoff cost each worker $110,000 to $140,000 over their remaining work lives. Many laid-off workers lose their nest eggs. Savings are drained, retirement funds raided. Workers lucky enough to find another job are sometimes so far behind on bills and debts that it damages their credit and leaves them a long, uphill climb to solvency.
Marianne DeMarco, the coordinator of the northeast SNAP office, has seen family after family get into a deep financial hole after losing a job.
“I don’t know how they’ll ever catch up,” she said.
Meanwhile, the safety net has frayed. Budget crises in Washington and Idaho have meant big cuts in health care for the poor, education and other social programs – although money from the federal stimulus bill helped fill some holes. Private charities have seen their donations sink along with the economy.
“I think it’s probably a triple whammy – the recession, the fiscal crisis (for state programs), and on top of that, the philanthropic community has taken a huge hit as well,” said Lori Pfingst, assistant director of Washington KidsCount, an annual assessment of children’s well-being.
The true size of the problem is still emerging. Recent national and regional statistics show increases in the poverty rate, declines in median household income, a rise in the uninsured and growth in the number of poor children. But those figures cover 2008 at the latest, and unemployment has been worse this year. By the end of this year, more than 1.5 million Americans are expected to exhaust their unemployment benefits.
“We haven’t even begun to feel the full effects of this recession,” Pfingst said.
Grant, 56, has not taken on a lot of debt as a result of his joblessness. Things just went from tight to tighter. In his household, a patchwork of social services helps keep them afloat – his unemployment checks and his partner’s Social Security disability income and food stamps help them cover the costs of living for a family of five.
He’s been working several hours a week as a janitor at the Spokane Masonic Center through an employment program funded by AARP. That income is taken off his $248 weekly unemployment benefit. Not all that long ago, he was making $12 an hour with benefits – enough to keep him well above the poverty level for a household of two.
Since then, his household has grown by three people, and his income has fallen.
“In ’09, I’m anticipating making about 10 grand less than ’07,” Grant said.
He figures he’s got less than eight weeks of unemployment benefits left – he used up the six months and is on the extension added under the federal stimulus package.
“Then it’s gonna be really tight,” he said.
Face of hunger
The line for lunch and the Friday Fresh Market starts early at the Women’s and Children’s Free Restaurant on North Monroe Street.
“There were people waiting out there at 8 o’clock this morning,” said Marlene Alford, the project’s executive director, on a recent Friday. “We don’t serve lunch until 12:30.”
Alford and the volunteers at the restaurant, which serves two free dinners and a free lunch each week in the basement of St. Paul’s United Methodist Church, are on the front lines of a key battle of the recession: meeting the basic need for food. Once a week, the program also provides fresh groceries – fruits and vegetables, dairy products and other staples.
Food stamp caseloads are skyrocketing in Washington and Idaho – rising at about twice the national average. From June 2008 to this June, the number of people seeking food stamps in Washington rose 45 percent. In Idaho, the increase was 40.8 percent.
Alford has seen the number of people served by the free restaurant rise 21 percent in the first half of this year, compared with the same time last year. Some 200 people might come for lunch on a typical Friday, with nearly 5,000 pounds of groceries distributed.
But it doesn’t cover everyone. “We do run out,” Alford said.
She says that many of the new people coming to the restaurant are those who have never had to seek help before. They’re often sheepish or ashamed and slow to ask for assistance, she said.
“Hunger has a different face nowadays,” she said.
Of course, not everyone who needs help is in trouble because of the current recession. Median household incomes, when figured for inflation, have been flat or declining for years in the middle- and lower-income categories. The newest Census Bureau figures place the median family income in America at $50,300 – that’s less, in real dollars, than it was 10 years ago.
Harvard economist Lawrence Katz has called the past 10 years “a lost decade for the typical American family.”
Tricia Van Leuven has a job. She has a home. And still, each month, it’s a dead heat between the bills and the paycheck. If a problem crops up – the starter on her 15-year-old car goes out, for example – something else has to go unpaid.
“A lot of times you have to rob Peter to pay Paul until Sam screams,” said Van Leuven, a 53-year-old single mother of two daughters. “I don’t think I make too bad of money, but we just can’t make ends meet.”
Van Leuven, who often goes to the Free Restaurant for a little help, is one of the thousands of regional residents who live in a gray area – above the poverty line, but barely scraping by.
The federal poverty level is $22,050 for a family of four. But many experts say that a true “living wage” is actually about twice that. Washington KidsCount estimates that a “basic needs” budget for a family of four in Spokane would be $41,738.
The median household income in Spokane County for 2008 was slightly above that: $45,550. In Kootenai County, it’s above $46,000.
This means, observers say, that a lot more people are struggling than poverty statistics would suggest. Of all Washington families in poverty, nearly two-thirds are headed by a working adult.
For a significant number of those families, the recession hasn’t really brought new trouble. They already were struggling.
When asked whether the recession has affected her, Van Leuven initially says no. She’s had her job – a position she likes a lot at Rings and Things – for nine years. She’s been living in her house on Spokane’s North Side for six years. She’s needed help making the stretch from paycheck to paycheck, but that isn’t anything new.
Then she reconsiders. There is one significant change – a kind of good-news-bad-news scenario.
She’s found herself slightly more able to keep up with the bills this year. But that’s only because she stopped setting aside money for retirement, after her 401(k) took a dive from about $25,000 to $10,000.
And when the starter on her 1994 Toyota went out last month, it put her behind once again.
“Now I’m playing catch-up, because I had to get that $300 and the only place I could take it was Avista and the water bill,” she said.
Until a couple years ago, Grant had a steady job as a warehouse worker for a local company, selling automotive radiators. Then the company sold off that division of its business; the new owners, Proliance, saw sales plummet and laid off Grant two years ago. The company has since declared bankruptcy.
“I had three weeks of paid vacation,” he said. “I really miss that. Took me eight years to get it.”
He took a temporary job as a city parks worker, but that ended in December. Since then, he’s been drawing unemployment insurance and putting out job applications. In two years, his income has gone from slim to slimmer.
“I went from 22 grand a year – not really a lot of money – to this year, I might make $14,000,” he said.
On a recent Monday, Grant reported to work at the Masonic Center in the morning. He mopped a ballroom strung with lights. He broke down some folding chairs in another ornate room with chandeliers and a lush red carpet.
At the end of his shift at 3, he met his grandchildren – picking up the 4-year-old at preschool and meeting the 7-year-old coming home from Cooper Elementary, which Grant attended as a child.
The next day, he was heading back to WorkSource to comb the job listings.
“In the last nine months, I bet I’ve put in at least 150 applications,” he said. “It’s brutal.”
He says he’s hearing that perhaps the job market is picking up. He hopes so. The clock is ticking on his unemployment benefits. But even if he lands another job soon – one that pays as well as his former job – there are long-term consequences to his recent hard times. He’s never been able to put aside much for retirement, and even the few thousand he had saved shrank in the financial crisis.
“I’m not counting on being able to retire, period,” he said. “I’ve got to work until I drop dead.”