Arthur,
It's getting more serious than anything the most gloomy of us used to
forecast when FW started life. And unfortunately it's going to get worse.
Keith
At 09:30 21/02/2010 -0500, you wrote:
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February 21, 2010 NY Times
The New Poor
Millions of Unemployed Face Years Without Jobs
By PETER S. GOODMAN
BUENA PARK, Calif. Even as the American economy shows tentative signs of a
rebound, the human toll of the recession continues to mount, with millions
of Americans remaining out of work, out of savings and nearing the end of
their unemployment benefits.
Economists fear that the nascent recovery will leave more people behind
than in past recessions, failing to create jobs in sufficient numbers to
absorb the record-setting ranks of the long-term unemployed.
Call them the new poor: people long accustomed to the comforts of
middle-class life who are now relying on public assistance for the first
time in their lives potentially for years to come.
Yet the social safety net is already showing severe strains. Roughly 2.7
million jobless people will lose their unemployment check before the end
of April unless Congress approves the Obama administrations proposal to
extend the payments, according to the Labor Department.
Here in Southern California, Jean Eisen has been without work since she
lost her job selling beauty salon equipment more than two years ago. In
the several months she has endured with neither a paycheck nor an
unemployment check, she has relied on local food banks for her groceries.
She has learned to live without the prescription medications she is
supposed to take for high blood pressure and cholesterol. She has become
effusively religious an unexpected turn for this onetime standup comic
with X-rated material finding in Christianity her only form of health
insurance.
I pray for healing,says Ms. Eisen, 57. When youve got nothing, youve got
to go with what you know.
Warm, outgoing and prone to the positive, Ms. Eisen has worked much of her
life. Now, she is one of 6.3 million Americans who have been unemployed
for six months or longer, the largest number since the government began
keeping track in 1948. That is more than double the toll in the next-worst
period, in the early 1980s.
Men have suffered the largest numbers of job losses in this recession. But
Ms. Eisen has the unfortunate distinction of being among a group women
from 45 to 64 years of age whose long-term unemployment rate has grown rapidly.
In 1983, after a deep recession, women in that range made up only 7
percent of those who had been out of work for six months or longer,
according to the Labor Department. Last year, they made up 14 percent.
Twice, Ms. Eisen exhausted her unemployment benefits before her check was
restored by a federal extension. Last week, her check ran out again. She
and her husband now settle their bills with only his $1,595 monthly
disability check. The rent on their apartment is $1,380.
Were looking at the very real possibility of being homeless,she said.
Every downturn pushes some people out of the middle class before the
economy resumes expanding. Most recover. Many prosper. But some economists
worry that this time could be different. An unusual constellation of
forces some embedded in the modern-day economy, others unique to this
wrenching recession might make it especially difficult for those out of
work to find their way back to their middle-class lives.
Labor experts say the economy needs 100,000 new jobs a month just to
absorb entrants to the labor force. With more than 15 million people
officially jobless, even a vigorous recovery is likely to leave an
enormous number out of work for years.
Some labor experts note that severe economic downturns are generally
followed by powerful expansions, suggesting that aggressive hiring will
soon resume. But doubts remain about whether such hiring can last long
enough to absorb anywhere close to the millions of unemployed.
A New Scarcity of Jobs
Some labor experts say the basic functioning of the American economy has
changed in ways that make jobs scarce particularly for older,
less-educated people like Ms. Eisen, who has only a high school diploma.
Large companies are increasingly owned by institutional investors who
crave swift profits, a feat often achieved by cutting payroll. The
declining influence of unions has made it easier for employers to shift
work to part-time and temporary employees. Factory work and even
white-collar jobs have moved in recent years to low-cost countries in Asia
and Latin America. Automation has helped manufacturing cut 5.6 million
jobs since 2000 the sort of jobs that once provided lower-skilled workers
with middle-class paychecks.
American business is about maximizing shareholder value,said Allen Sinai,
chief global economist at the research firm Decision Economics. You
basically dont want workers. You hire less, and you try to find capital
equipment to replace them.
During periods of American economic expansion in the 1950s, 60s and 70s,
the number of private-sector jobs increased about 3.5 percent a year,
according to an analysis of Labor Department data by Lakshman Achuthan,
managing director of the Economic Cycle Research Institute, a research
firm. During expansions in the 1980s and 90s, jobs grew just 2.4 percent
annually. And during the last decade, job growth fell to 0.9 percent annually.
The pace of job growth has been getting weaker in each expansion,Mr.
Achuthan said. There is no indication that this pattern is about to change.
Before 1990, it took an average of 21 months for the economy to regain the
jobs shed during a recession, according to an analysis of Labor Department
data by the National Employment Law Project and the
<http://topics.nytimes.com/top/reference/timestopics/organizations/e/economic_policy_institute/index.html?inline=nyt-org>Economic
Policy Institute, a labor-oriented research group in Washington.
After the recessions in 1990 and in 2001, 31 and 46 months passed before
employment returned to its previous peaks. The economy was growing, but
companies remained conservative in their hiring.
Some 34 million people were hired into new and existing private-sector
jobs in 2000, at the tail end of an expansion, according to Labor
Department data. A year later, in the midst of recession, hiring had
fallen off to 31.6 million. And as late as 2003, with the economy again
growing, hiring in the private sector continued to slip, to 29.8 million.
It was a jobless recovery: Business was picking up, but it simply did not
translate into more work. This time, hiring may be especially subdued,
labor economists say.
Traditionally, three sectors have led the way out of recession:
automobiles, home building and banking. But auto companies have been
shrinking because strapped households have less buying power. Home
building is limited by fears about a glut of foreclosed properties.
Banking is expanding, but this seems largely a function of government
support that is being withdrawn.
At the same time, the continued bite of the financial crisis has crimped
the flow of money to small businesses and new ventures, which tend to be
major sources of new jobs.
All of which helps explain why Ms. Eisen who has never before struggled to
find work feels a familiar pain each time she scans job listings on her
computer: There are positions in health care, most requiring experience
she lacks. Office jobs demand familiarity with software she has never
used. Jobs at fast food restaurants are mostly secured by young people and
immigrants.
If, as Mr. Sinai expects, the economy again expands without adding many
jobs, millions of people like Ms. Eisen will be dependent on an
unemployment insurance already being severely tested.
The system was ill prepared for the reality of long-term unemployment,said
Maurice Emsellem, a policy director for the National Employment Law
Project. Now, you add a severe recession, and you have created a crisis of
historic proportions.
Fewer Protections
Some poverty experts say the broader social safety net is not up to
cushioning the impact of the worst downturn since the Great Depression.
Social services are less extensive than during the last period of
double-digit unemployment, in the early 1980s.
On average, only two-thirds of unemployed people received state-provided
unemployment checks last year, according to the Labor Department. The rest
either exhausted their benefits, fell short of requirements or did not apply.
You have very large sets of people who have no social protections,said
Randy Albelda, an economist at the University of Massachusetts in Boston.
They are landing in this netherworld.
When Ms. Eisen and her husband, Jeff, applied for food stamps, they were
turned away for having too much monthly income. The cutoff was $1,570 a
month $25 less than her husbands disability check.
Reforms in the mid-1990s imposed time limits on cash assistance for poor
single mothers, a change predicated on the assumption that women would
trade welfare checks for paychecks.
Yet as jobs have become harder to get, so has welfare: as of 2006, 44
states cut off anyone with a household income totaling 75 percent of the
poverty level then limited to $1,383 a month for a family of three
according to an analysis by Ms. Albelda.
We have a work-based safety net without any work,said Timothy M. Smeeding,
director of the Institute for Research on Poverty at the University of
Wisconsin, Madison. People with more education and skills will probably
figure something out once the economy picks up. Its the ones with less
education and skills: thats the new poor.
Here in Orange County, the expanse of suburbia stretching south from Los
Angeles, long-term unemployment reaches even those who once had six-figure
salaries. A center of the national mortgage industry, the area prospered
in the real estate boom and suffered with the bust.
Until she was laid off two years ago, Janine Booth, 41, brought home
roughly $10,000 a month in commissions from her job selling electronics to
retailers. A single mother of three, she has been living lately on $2,000
a month in child support and about $450 a week in unemployment insurance a
stream of checks that ran out last week.
For Ms. Booth, work has been a constant since her teenage years, when she
cleaned houses under pressure from her mother to earn pocket money. Today,
Ms. Booth pays her $1,500 monthly mortgage with help from her mother, who
is herself living off savings after being laid off.
I dont want to take money from her,Ms. Booth said. I just want to find a job.
Ms. Booth, with a résumé full of well-paid sales jobs, seems the sort of
person who would have little difficulty getting work. Yet two years of
looking have yielded little but anxiety.
She sends out dozens of résumés a week and rarely hears back. She responds
to online ads, only to learn they are seeking operators for telephone sex
lines or people willing to send mysterious packages from their homes.
She spends weekdays in a classroom in Anaheim, in a state-financed
training program that is supposed to land her a job in medical
administration. Even if she does find a job, she will be lucky if it pays
$15 an hour.
What is going to happen?she asked plaintively. I worry about my kids. I
just dont want them to think Im a failure.
On a recent weekend, she was running errands with her 18-year-old son when
they stopped at an A.T.M. and he saw her checking account balance: $50.
He says, Is that all you have? she recalled. Are we going to be O.K.?
Yes, she replied and not only for his benefit.
I have to keep telling myself its going to be O.K.,she said. Otherwise, Id
go into a deep depression.
Last week, she made up fliers advertising her eagerness to clean houses
the same activity that provided her with spending money in high school,
and now the only way she sees fit to provide for her kids. She plans to
place the fliers on porches in some other neighborhood.
I dont want to clean my neighborshouses,she said. I know Im going to come
out of this. Theres no way Im going to be homeless and poverty-stricken.
But I am scared. I have a lot of sleepless nights.
For the Eisens, poverty is already here. In the two years Ms. Eisen has
been without work, they have exhausted their savings of about $24,000.
Their credit card balances have grown to $15,000.
I dont know how were still indoors,she said.
Her 1994 Dodge Caravan broke down in January, leaving her to ask for rides
to an employment center.
She does not have the money to move to a cheaper apartment.
You have to have money for first and last months rent, and to open utility
accounts,she said.
What she has is personality and presence two traits that used to seem
enough. She narrates her life in a stream of self-deprecating wisecracks,
her punch lines tinged with desperation.
See that,she said, spotting a man dressed as the Statue of Liberty.
Standing on a sidewalk, he waved at passing cars with a sign advertising a
tax preparation business. That will be me next week. Do you think this guy
ever thought hed be doing this?
And yet, she would gladly do this. She would do nearly anything.
There are no bad jobs now,she says. Any job is a good job.
She has applied everywhere she can think of at offices, at gas stations.
Nothing.
Im being seen as a person who is no longer viable,she said. Im chalking it
up to my age and my weight. Blame it on your most prominent insecurity.
Two Incomes, Then None
Ms. Eisen grew up poor, in Flatbush in Brooklyn. Her father was in
maintenance. Her mother worked part time at a company that made window blinds.
She married Jeff when she was 19, and they soon moved to California, where
he had grown up. He worked in sales for a chemical company. They rented an
apartment in Buena Park, a growing spread of houses filling out former
orange groves. She stayed home and took care of their daughter.
I never asked him how much he earned,Ms. Eisen said. I was of the
mentality that the husband took care of everything. But we never wanted.
By the early 1980s, gas and rent strained their finances. So she took a
job as a quality assurance clerk at a factory that made aircraft parts. It
paid $13.50 an hour and had health insurance.
When the company moved to Mexico in the early 1990s, Ms. Eisen quickly
found a job at a travel agency. When online booking killed that business,
she got the job at the beauty salon equipment company. It paid $13.25 an
hour, with an annual bonus enough for presents under the Christmas tree.
But six years ago, her husband took a fall at work and then succumbed to
various ailments diabetes, liver disease, high blood pressure leaving him
confined to the couch. Not until 2008 did he secure his disability check.
And now they find themselves in this desert of joblessness, her paycheck
replaced by a $702 unemployment check every other week. She received 14
weeks of benefits after she lost her job, and then a seven-week extension.
For most of October through December 2008, she received nothing, as she
waited for another extension. The checks came again, then ran out in
September 2009. They were restored by an extension right before Christmas.
Their daughter has back problems and is living on disability checks,
making the church their ultimate safety net.
I never thought Id be in the position where I had to go to a food bank,Ms.
Eisen said. But there she is, standing in the parking lot of the Calvary
Chapel church, chatting with a half-dozen women, all waiting to enter the
Bread of Life Food Pantry.
When her name is called, she steps into a windowless alcove, where a
smiling woman hands her three bags of groceries: carrots, potatoes, bread,
cheese and a hunk of frozen meat.
Havent we got a lot to be thankful for?Ms. Eisen asks.
For one thing, no pinto beans.
Ive got 10 bags of pinto beans,she says. And I have no clue how to cook a
pinto bean.
Local job listings are just as mysterious. On a bulletin board at the
county-financed ProPath Business and Career Services Center, many are
written in jargon hinting of accounting or computers.
Nothing Im qualified for,Ms. Eisen says. When you cant define what it is,
thats a pretty good indication.
Her counselor has a couple of possibilities a cashier at a supermarket and
a night desk job at a motel.
Ill e-mail them,Ms. Eisen promises. Ill tell them what a shining example
of humanity I am.
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Keith Hudson, Saltford, England
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