So, you're going to pay the rent, you're going to keep the car, you're going to pay the cell phone bill. Do you think you want the neighbors seeing the electric is off? I don't think so. And, as things don't improve for months and months, you're going to max out the credit cards and home equity line of credit.
In retrospect, you're going to see that it was time to stop the hemorrhaging of money long ago, but you didn't do that. You couldn't do that. Where would you move? How much would that save? Are you underwater on the mortgage, ditto the car loan?
Whether it's looking for a job equal to, or nearly equal to the one that's long gone, or running in the right circles to get that job, appearances are important. The fear is if you're seen as a loser now there's no going back. Sadly, employers appear to be embracing this thinking as evidence continues to show that older workers and long time unemployed workers are being discriminated against.
Sustained under or unemployment, yours or that of your life partner, or any other significant decrease in income is certainly the most obvious way to find your tight budget has you looking for your next meal. But it is not the only way.
Case in point: Paul, a postal worker, and his wife Amy, a part-time housecleaner and full-time mother of six.
On paper, Paul doesn't look like he belongs on a breadline. He has a solid employment history, 23 years with the United States Postal Service. His wife not only raised their children, but supplemented the family income. He has always had a government medical insurance plan for the entire family. With $52,000 of earnings in 2010, you would think he would be at least lower-middle class.
Paul's family, formerly of Queens, NY, moved to south Jersey two years ago to get out from under an oppressive and ever escalating rent that ate up nearly half of their family income of $62,000 per year, $2,500 per month when they left, utilities not included.
There were other reasons to move as well. Two of Paul's children have learning disabilities. So it made sense to also look for a good school district that could meet their educational needs. The move to a two-plus bedroom garden apartment in Mount Holly, NJ at a rent of $1,300 per month looked like a smart thing to do.
With a little luck, Paul could make a swap transfer to a post office in New Jersey without losing his seniority. But the recession and luck was not with them. Housecleaning work in New Jersey has not been plentiful for his wife. The hoped for transfer has yet to materialize. And, Paul is spending $400 a month for a 2 hour commute to Brooklyn, NY on a commuter bus, then the NYC subway and then a second bus to main post office.
In New Jersey they also have a car expense. Paul tells me he is not a regular food pantry client, but the children are getting older and eating more in their teen years. At just over 130% of the poverty line, Paul's family is not poor enough to get food stamps. They are well within the 185% of poverty qualifier for food assistance.
What happened? Did Paul and his wife have too many children? They were all born by the year 2000. If their income was as little as $40,000 per year 11 years ago, they were no where near living in poverty. Just ten years later, with only a slight decrease in income and their efforts to decrease their housing expense, they are no longer getting by.
Paul's was probably one of the few families here with decent healthcare insurance. But ten years of higher living costs without enough increase in income has thrown them off balance and into a financial net loss.
Together, decreases in income and increases in living costs are the combined factors that will put more and more of us in the food lines. In a way, Paul and his family are solidly in the middle class, a middle class newly defined as not quite able to afford the necessities of life.
The imbalance is continuing even if, by academic measures, the recession is over. The engine of this financial imbalance for the middle class is another imbalance: wealth and income inequity. By all indications, the financial assault on working people will continue.
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