Courtesy of Michael Panzner of Financial Armageddon
Every once in a while I like to post a collection of recent reports that should, in theory, help to undermine the enthusiasm that so many in Washington and on Wall Street have for the notion that the U.S. economy is ‘recovering.’
Of course, few of those people are interested in the truth, or even a version or reality that is at odds with their own, but I soldier on regardless.
Fools’ errand? Maybe (though probably not for those loyal FA visitors who are interested in knowing where things really stand).
Be that as it may, here is (yet) another edition of "What a recovery!":
"When the Next Meal Is a Maybe" (Houston Chronicle)
A ground-breaking study takes a look at how many families in area counties are struggling to put food on their tables
Every day more than 700,000 people in Harris County are uncertain about where they will get their next meal. Not all of them are poor — many are working people who don’t qualify for federal food programs.
These are among the findings of a recent study that provides the first detailed look at hunger at the county level. Harris County families struggling to keep food on the table have a food budget shortfall of $12.97 per week, per person. To fill the meal gap, $277 million is needed annually to ensure that every person has three meals a day, according to the report’s calculations.
The federal government defines food insecurity as limited or uncertain availability of nutritionally adequate foods. On average, food insecure families go at least seven months of the year without enough food, the study said.
The study, based on 2009 figures, was conducted by Feeding America, a national hunger relief organization, with the goal of helping local food banks develop better strategies to target hunger. Food banks traditionally have relied on state and national data to estimate food insecurity needs, but the new county data give them a more accurate assessment.
…
The study uses the Census Bureau’s Current Population Survey data to assess the relationship between food insecurity and key indicators at the state level, including unemployment rates, median income, poverty rates and demographics.
While poverty and hunger are related, they are not the same. The national data show that 45 percent of food insecure families have incomes above the federal poverty level and that 53 percent of poor households are food secure.
"This study is important because it really shows very publicly there are children going hungry and families do not have sufficient food to lead active, healthy lives," said Anna Babin, the United Way of Greater Houston’s CEO. "For many children food is taken care of at school. The worry we have is summer is coming and where will they get food?"
Last year, the United Way’s 2-1-1 help line experienced up to a 30 percent increase in clients calling to request food assistance, Babin said. Many of the clients are the new working poor who were pinched by the recession and now face tough choices about how to spend their limited income. They’re making tradeoffs to pay the rent, utilities or medical expenses and food has dropped on the priority list, she said.
Rising gasoline and grocery prices have made family budgets even tighter and nonprofits worry that those extra costs, coupled with proposed federal budget cuts to SNAP, could further compound the hunger needs. Greene said any reduction to the food stamp program would be "absolutely disastrous."
"Slow Recovery Keeps Demand High at Food Bank" (Pratt Tribune)
Pratt, Kan. —
The slumping economy is causing families to seek ways to keep themselves fed with reduced income or no income at all.
The Pratt Christian Food Bank has seen an increase in the number of boxes, families and the number of persons served in the first three months of the year compared with the first three months of 2010, said Diana Harris, Food Bank Board President.
In January, February and March of 2011 the food bank has handed out 248 boxes and served 794 people. Some of the number of people served are probably duplicates.
For the same period in 2010 the Food Bank handed out 170 boxes of goods and served 521 people.
The increase has put a strain on the Food Bank supplies and more donations are always needed.
"Struggling Children Put Financial Strain on Families" (McClatchy Newspapers)
Setting limits can help parents deal.
ORLANDO, Fla. — When their daughter called a couple of years ago, stressed out by her college studies, apartment bills and part-time work, Dan and Lisa Costa welcomed her back into the house with open arms.
Already affected by the recession — Lisa had been laid off from her job as a public-school teaching assistant, and the building-materials company that employed Dan had been pinched by the housing slump — the Costas saw it as a way to stabilize the family’s finances when daughter Natalie moved back into their Maitland, Fla., home.
“It just made sense for everyone,” said Dan, 54, a sales-account representative. “We could no longer afford to subsidize her living away from home, and moving back in gave her the opportunity to focus on school better without having all the extra pressure out there.”
Millions of families across the country have faced similar situations in recent years as adult children returned to the fold amid a tough economy and high unemployment.
But though the outcome can be mutually beneficial, as it has been for the Costas, this “boomerang effect” can instead put a severe strain on households already in tough financial straits.
“We are seeing more and more young people, out of work or facing foreclosure, who are moving back in with Mom and Dad,” said Richard Schram, senior executive at CredAbility in Central Florida, a consumer-credit-counseling agency.
“In many cases, they are bringing a spouse or children with them,” he added, “and that can create quite a stressful dynamic in a household.”
"Older Workers Are Jobless Longer, Report Says" (Columbus Dispatch)
DAYTON — Ann Kingston, 59, has not found a steady job since moving back to the Dayton area in November, and she thinks her age has played a role in her unsuccessful job hunt.
Kingston said employers seem to view her and other older workers as more expensive, less capable of learning new technologies and unmotivated to work hard. Her experience is not uncommon.
Although older workers have a lower unemployment rate than other segments of the population, they remain unemployed longer and their jobless rate rose by a larger percentage during the recession than their younger counterparts’, according to a report released this month by the AARP Public Policy Institute.
In Ohio last year, the annual average rate of unemployment for workers 55 and older was 6.4 percent, up from 3.5 percent in 2007, according to U.S. Census data. On average, 75,000 older workers were unemployed at any given time, an increase of 38,000 from 2007.
A Dayton Daily News special investigation found that, at the end of last year, many older unemployed workers had depleted their retirement savings and unemployment benefits, and are seeking Social Security benefits before their full retirement age.
Even when older job applicants have a high skill set and plenty of work experience, employers are often reluctant to hire them because they typically held a job that paid higher wages, said Richard Stock, director of the University of Dayton’s Business Research Group.
Employers fear that paying those workers a lower wage might “demotivate” them and lead them to seek other job opportunities sooner than others, Stock said.
"Retiring Retirement: Older Americans Are Working Longer" (St. Louis Beacon)
Ernie Edelmann needs a job.
She’s a licensed professional counselor, has worked for 25 years with victims and survivors of domestic violence, sexual assault and rape, and she’s 75.
"It would be easier if I had a part-time job," she says.
Last October, Edelmann lost her job as a licensed professional counselor when the women’s shelter she worked for closed because of a lack of funding. Since then, she’s been able to make it, thanks to Social Security, Edelmann says, but barely.
"It’s a little tough trying to live on that. However, I can do it if I’m just very austere with my budget."
Between 1977 and 2007, the employment of people 65 and older increased by 101 percent, according to the Bureau of Labor Statistics.
And with more and more baby boomers turning 65 this year, those numbers should erupt over the next 40 years. According to the Census Bureau, the population of the U.S. will grow by 42 percent by 2050, with one in five Americans 65 and older.
Some will work because they want to, most because they have to. Regardless, the impact of those people staying in their jobs will affect not just them, but the ways in which companies operate, and social and public policy and society overall.
"Americans Raiding Retirement Funds Early" (Bankrate.com)
Nearly one-fifth of full-time employed Americans have raided retirement accounts in the past year to cover emergencies, according to a national Bankrate survey.
Despite increasing signs of a stabilizing U.S. economy, 19 percent of Americans — including 17 percent of full-time workers — have been compelled to take money from their retirement savings in the last year to cover urgent financial needs, the Financial Security Index found.
Though 80 percent of full-time workers didn’t dip into retirement funds, far too many consumers are ill-prepared for emergencies, says Kim McGrigg, manager of community and media relations at Money Management International, a credit counseling agency.
"Perhaps the most alarming thing about these numbers is that they suggest a lack of other options," she says. "Consumers generally consider using retirement funds only as a last resort."
Michael Masiello, founder of the Masiello & Associates wealth management firm in Rochester, N.Y., agrees. "I believe that 17 percent of full-time workers taking early withdrawals is a higher than normal number, and it’s certainly higher than it should be," he says.
"Small Businesses Struggle With Recession, Gas Prices" (NPR)
According to AAA, the average gasoline price in the U.S. is $3.86 a gallon. Last month, Tell Me More spoke with Edgardo Castro, whose small trucking operation was struggling because of high gas prices. Now prices are even higher — nearly 50 cents more per gallon. Host Michel Martin checks in with Castro and with Roben Farzad of Bloomberg Businessweek about what rising gas prices mean for the U.S. economy and American business owners.
…
MARTIN: Roben, let me ask you this question. It says that – the USA Today reports today that due to gas prices, economists are less optimistic about the recovery than they were three months ago. They’re now projecting 2.9 percent GDP growth for the new year down from their 3.2 estimate three months ago. Is that because of the price or is it because of the volatility? Or what’s the reason for that?
Mr. FARZAD: You know, there is a pretty linear relationship. A lot of economists I spoke with say that for every $10 hike in the price of crude you have a roughly 25-cent-a-gallon increase in the average price of regular gasoline across the country. And that shaves $25 billion off of economic growth every year. So you can imagine for oil shooting up $30 or $40 you’re talking about significant numbers. That’s the writ large relationship.
You can speak with Mr. Castro and small business owners, especially in this environment where we have near nine percent unemployment, stagnant wages, people coming off just a terrible emotional overhang of the Great Recession and in no mood to pay more for things that now they’re expecting a deflationary spiral to cut them some slack on.
So you as a small business owner can’t pass these prices on so you decide, well, I can either absorb them or I can downscale my business. When you downscale your business, that curtails economic activity.
"Arizona’s Middle Class Further Out of Reach for Young" (Arizona Republic)
The deep recession and slow recovery have caused financial stress for Arizonans of all ages. But in many ways, the downturn has hit young adults – many of whom came of age during almost 20 years of unprecedented U.S. prosperity – the hardest.
A tough job market, daunting student-loan balances, misuse of credit cards, the housing-market crash and reduced workplace benefits are among the challenges that have put many people under age 40 in a bind.
Will they be able to match the standard of living attained by their parents? Time, of course, is on their side, but for many, the middle-class dreams are on hold.
"This is the first time, for a lot of people in my generation, when things haven’t gone their way financially," said Jacob Gold, a 32-year-old financial adviser in Scottsdale. "The last few years have been a real wake-up call."
Jobs and the housing market are at the root of the issues. Job losses, limited opportunities and paltry pay raises have made it difficult to pay off massive student loans. Many young adults bought their first homes at the peak of the housing market and have struggled to make payments on underwater mortgages. Beyond that, many battle debt because they have used plastic to survive tough times, or to live beyond their means, or both.
These workers have time – if they downsize their aspirations – to repair some of the financial damage, financial advisers say. But young Arizonans say that the recession will have a lasting impact on their middle-class dreams.
