De USA van kwaad tot erger

[Cees Binkhorst]

REPLY TO: D66 at nic.surfnet.nl

Onderstaand bericht van Mary Hilton uit Maine (een van de armere Staten
van de USA) zegt het heel duidelijk.

De 2e golf van hypotheken die niet betaald zullen kunnen worden (begint
in mei dit jaar) zal bijna net zo groot zijn als de 1e, en zal de
USA-economie jaren op achterstand zetten.

Het is de vraag of ze er überhaupt bovenop zullen komen, als de kosten
van defensie, overheid en gevangeniswezen niet teruggebracht worden.
De militairen gebruiken b.v. 40%+ van ALLE brandstof.

Groet / Cees

Mary Hilton Norway ME February 20th, 2010 10:30 pm
The people over 50 and unemployed now will most likely be unemployed or
underemployed for the rest of their lives, or until they officially are
of age to retire.
That's a very scary fact, and one that the article glossed over lightly.
So for everyone who's chastising those who are unemployed: are you over
50 and do you have a guaranteed job for life? Hold your breath and pray
that you keep it until you hit retirement age.
Be very scared of this "recession". It's going to take down an entire
socioeconomic class-the middle class.
Welcome to the new poor class, everyone. You'll find lots of company.

February 21, 2010
The New Poor
Millions of Unemployed Face Years Without Jobs
http://www.nytimes.com/2010/02/21/business/economy/21unemployed.html
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 administration’s 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 you’ve got nothing,
you’ve 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.

“We’re 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 don’t 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 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 husband’s 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. It’s the
ones with less education and skills: that’s 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 don’t 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 don’t want them to think I’m 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 it’s going to be O.K.,” she said.
“Otherwise, I’d 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 don’t want to clean my neighbors’ houses,” she said. “I know I’m
going to come out of this. There’s no way I’m 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 don’t know how we’re 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 month’s 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 he’d 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.

“I’m being seen as a person who is no longer viable,” she said. “I’m
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 I’d 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.

“Haven’t we got a lot to be thankful for?” Ms. Eisen asks.

For one thing, no pinto beans.

“I’ve 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 I’m qualified for,” Ms. Eisen says. “When you can’t define what
it is, that’s a pretty good indication.”

Her counselor has a couple of possibilities — a cashier at a supermarket
and a night desk job at a motel.

“I’ll e-mail them,” Ms. Eisen promises. “I’ll tell them what a shining
example of humanity I am.”

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