Wednesday, January 16, 2008

Losing a Job, Moving in with Mom

Here's a sad article from the Times: Blue-Collar Jobs Disappear, Taking Families’ Way of Life Along

After 30 years at a factory making truck parts, Jeffrey Evans was earning $14.55 an hour in what he called “one of the better-paying jobs in the area.”

Wearing a Harley-Davidson cap, a bittersweet reminder of crushed dreams, he recently described how astonished and betrayed he felt when the plant was shut down in August after a labor dispute. Despite sporadic construction work, Mr. Evans has seen his income reduced by half.

So he was astonished yet again to find himself, at age 49, selling off his cherished Harley and most of his apartment furniture and moving in with his mother.

Middle-aged men moving in with parents, wives taking two jobs, veteran workers taking overnight shifts at half their former pay, families moving West — these are signs of the turmoil and stresses emerging in the little towns and backwoods mobile homes of southeast Ohio, where dozens of factories and several coal mines have closed over the last decade, and small businesses are giving way to big-box retailers and fast-food outlets.

Things like this just kill me. People need jobs. It doesn't matter what kind of work you do-- as long as you can support your basic needs on the wages, you have some dignity. I know people say our economy is transitioning from being based on manufacturing to service industry jobs, but I suspect that really doesn't work for a lot of people... not that I personally know what to do about it...


Inside the Philosophy Factory said...

This is nothing new -- the working poor really are only one paycheck away from losing their independence.

A few years ago Barbara Ehrnreich wrote "Nickel and Dimed" -- and, while her methodology was flawed, her point remains. Just working hard isn't enough these days.

I teach at a community college. Many of my students are adults hoping to get a better job. I hope they do too... because the ones they have aren't secure and don't pay their bills or help their kids go to college.

Anonymous said...

A lot of these people weren't "working poor". The auto industry workers were middle class.

PiggyBankBlues said...

i just started reading elizabeth warren's Two Income Trap. While I don't nec. agree with her solutions, the stats are staggering. thanks for the article link, i'll check it out...

Escape Brooklyn said...

This is definitely impacting the middle class, too, and it seems like it's going to get a whole lot worse.

After my father, who has an MBA from a top school, took "early retirement" from his long-term position, he was forced to take a menial job simply for the health insurance because the cost of healthcare through his pension plan skyrocketed.

But what else could he do? He's not old enough for Medicare yet, but many of the blue and white collar jobs have been outsourced.

Andrew Stevens said...

It's probably best not to mention Ehrenreich's book on a PF blog. I read that book and was absolutely appalled at the author's ignorance of personal finance. It is impossible for me to imagine that the woman has two brain cells to rub together, her mistakes were so egregious and not the sort of mistakes a genuinely poor person makes. Staying in a hotel room because you can't afford a security deposit? Ye gods.

Noel Larson said...

I believe Recessions are felt in small towns first since there is less potential to move to something else.

Combine this with Home prices and a credit crunch and it isn't gonna be pretty. A few years ago Warren Buffet put out a full page ad saying that we are headed in a not good direction due to our currency de-valuation and trade issues.

You cannot devalue your way out of a economic slump. And you can't pay a potentially Trillion dollars (all in including economic hit)for a war (and I am NOT taking sides on a validity issue, just a monitray one!)and not think that their is not going to be an issue.

the Consumer portion of the economy has been holding up more than its end for too long...piper paying time.

My 2 cents

Anonymous said...

Bronx Chica- What goes up must come down- That's why everyone must be thanksful for what they have and sock away money.

****Veteran Military Wife at Life Lessons of a Military Wife**** said...

I read Ehrenreich's book too...and now look at those in the service industry, particularly waitresses and hotel a different light. I never get upset with anyone, and I am sure to tip well.

I think the book should be required reading for everyone. She stayed in a hotel room...but don't you realize, a lot of the less-than-middle-class make decisions such as this? They have never learned to plan and think things thru...they live hand to mouth...which is why I think more high schools should have classes that teach not only personal finance but life skills too! Just to think that it IS possible to become a millionaire on a modest salary...most folks can't even wrap their arms around that! Here is another book that talks about the fast food industry, written by a college professor who worked at fast food restaurants for almost a year...very enlightening and gives some great advice on how to lead and be a manager..
"My Secret Life on the McJob" by Jerry Newman.

Adrienne said...

Stop voting republican. Enough said. It was Reagan who started the "fire the union workers" trend. And we all know the right sides with corporations who see nothing wrong with outsourcing jobs. I'm not saying the dems have it right. But the republicans certainly have it wrong.

Anonymous said...

Get busy, sign up, and support Americans for Fair Taxation and the FairTax. Then, support the candidate who supports it: Mr. Huckabee's advocacy of the FairTax is the single most important policy position in this election. Here's why:

The FairTax rate of 23 percent on a total taxable consumption base of $11.244 trillion will generate $2.586 trillion dollars – $358 billion more than the taxes it replaces. [BHKPT]

The FairTax has the broadest base and the lowest rate of any single-rate tax reform plan. [THBP]

Real wages are 10.3 percent, 9.5 percent, and 9.2 percent higher in years 1, 10, and 25, respectively than would otherwise be the case. [THBNP]

The economy as measured by GDP is 2.4 percent higher in the first year and 11.3 percent higher by the 10th year than it would otherwise be. [ALM]

Consumption benefits [ALM]:

• Disposable personal income is higher than if the current tax system remains in place: 1.7 percent in year 1, 8.7 percent in year 5, and 11.8 percent in year 10.

• Consumption increases by 2.4 percent more in the first year, which grows to 11.7 percent more by the tenth year than it would be if the current system were to remain in place.

• The increase in consumption is fueled by the 1.7 percent increase in disposable (after-tax) personal income that accompanies the rise in incomes from capital and labor once the FairTax is enacted.

• By the 10th year, consumption increases by 11.7 percent over what it would be if the current tax system remained in place, and disposable income is up by 11.8 percent.

Over time, the FairTax benefits all income groups. Of 42 household types (classified by income, marital status, age), all have lower average remaining lifetime tax rates under the FairTax than they would experience under the current tax system. [KR]

Implementing the FairTax at a 23 percent rate gives the poorest members of the generation born in 1990 a 13.5 percent improvement in economic well-being; their middle class and rich contemporaries experience a 5 percent and 2 percent improvement, respectively. [JK]

Based on standard measures of tax burden, the FairTax is more progressive than the individual income tax, payroll tax, and the corporate income tax. [THBPN]

Charitable giving increases by $2.1 billion (about 1 percent) in the first year over what it would be if the current system remained in place, by 2.4 percent in year 10, and by 5 percent in year 20. [THPDB]

On average, states could cut their sales tax rates by more than half, or 3.2 percentage points from 5.4 to 2.2 percent, if they conformed their state sales tax bases to the FairTax base. [TBJ]

The FairTax provides the equivalent of a supercharged mortgage interest deduction, reducing the true cost of buying a home by 19 percent. [WM]

ALERT: Kotlikoff refutes Bruce Bartlett's shabby critiques of the FairTax.