[Homestead] S.C. city, microcosm of economic downturn
bobford79 at yahoo.com
Mon Dec 22 06:47:34 EST 2008
I know some people are tired of economic news and my comments on the economy, so if you aren't interested in my comments ,please feel free to delete now. In this am NYT, this article about Columbia, SC , seemed to confirm my biggest worry about this recession. I don't think I have ever visited or known anyone from Columbia; like most non-residents, I am much more familiar with the coastal towns of SC. But, according to this article, official unemployment will be close to 15% there in a few months. Unofficial, if it is like most places is going to be about double the official numnber. One thing about this town, according to this article is that it has a larger percenatge than normal of government, medical, and university jobs, which should have propped up the numbers.
I think what is starting to happen is a fast separation between the working class and the business/professional class. If this continues for more than a year or two -- and even that would be catastrophic-- this country will become very different that what we know, today.
Last week I was over at JP Morgan/ Chase doing a little business. I always see the same personal banker (PBs are common in the city, it isn't a big deal, more like a clerk). She is a young girl in her early twenties and we talk and flirt when I go there 4 or 5 times a month, so I have become friendly with her. She is taking a week to go to Vegas during the holiday period to celebrate her new promotion. She was very excited, she had just found out about the promotion, though her vacation was already scheduled, so she changed her destination.
Her salary 'doubled'. Now, she's not making the big bucks or anything , like with 'real ' bankers. Still, she has not yet finished her undergraduate studies (she transferred to ASU from Texas where she lost her basketball scholarship, after an injury--she's 6') and she just went from making less than $24,000 to her new salry of $48,000. Almost exactly doubling her salary. At the same time, in the same town, I can get unskilled labor that will bust their butts for $5 to $7 per hour, that would have cost me at least $10 r $12 per hour, not even a year ago. I can get 'skilled' labor, today, for the same $10 or $12 per hour that I would have paid for 'unskilled' labor , less than a year ago. My bank employee friend is 22 y.o., and making almost $50,000, with great benefits with her promotion; while a 40 y.o. experienced carpenter is only getting $10 per hour with no benefits for hard labor skilled work, and he can't find enough work to support his
family. Something will have to give, if things continue like this.
I went to a popular local breakfast hangout yesterday, a mid-priced place, an omelet breakfast with tip will run about $15. The place was packed as usual. People in their Ralph Lauren and fancy handbags, plenty of German and better Japanes cars in the parking lot. . Everything seemed very normal. But, I wonder what it was like at McDonalds with their dollar menu. Were people buying one less egg mcmuffin? If what I am seeing, and fearing is correct, this will change society. Working people won't, and shouldn't, in my opinion, put up with this for long.
What I'm afraid will happen, though, is that the middle class -- not the very comfortable, and certainly not the rich -- will bear the brunt of the anger of the dis-enfranchised working class.
Think of the auto-bail-out. Now, I think the bail-out was stupid, just political payoff, to no good-end -- no matter what smart people like Krugman and Obama say. But still, those blue colar auto workers have caught pure hell over their wages. I think Unions today are corrupt, but that is beside the point. The workers had good livable wages. They must give back wages to get the bail-out; even men who have worked there for decades. Maybe that is right and okay; but none of the hundred of thousands of employees at Goldman Sachs, AIG, all of the great banks and investment houses were 'required' to give back salaries. Oh, sure, a few men who make eight and nine figure salries have vounteered to work for a buck this year, but, they'll make that back , have no fear. Why was there no outcry for the white collar salaried employee's salaries like there was for the blue collar workers wages?
One of my neighbors is just finishing extensive interior renovations on his house, so I walked down yesterday to look at his new custom made knotty alder cabinets and his front entrance door that cost more than an excellent used car, and his new 21 seer (?) cooling system. I aske dhim what in the world he was spending so much for, in this economy. he's a bit older than me and semi-retired. he said , well he already had planned to do this , over a year ago (he re-married about that time) and he say, "hey, I'm getting excellent labor ,cheaper than I've seen it in ages". The problem is he expects to move to his retiremnet home , up around, Sedona -- in five years. He thinks that the economy will have completely recovered and he'll be able to recouop the approx. $200,000 of renovations in five years. I think he is way off on his timing.
He'll be alright, either way; just worth less, if I'm right. But, people who build things or repair things or service things or servive the people who build and repair; they are looking at very bleak times ahead. A man who swings a hammer or turns a wrench or lays pipe is going to work harder for less income, 'when' he can find work. That unfairness can disrupt society, and lead to unexpected outcomes which are good for no-one, except the rich and politcially powerful -- the very people who caused these damn problems.
Anyway, that is just part of my new worrys; and this article is just another example from another place that seems to be confirming my worries. I knowe that many on tyhis list are not as reliant on society at large but we all have friends, siblings, etc; and I can't see whre most are not affected, at least somewhat.. Well, it looks like the market is going to open on an up-note if nothing happens in the next three hours. Maybe I'm worrying for nothing...................................
A Reeling City Is a Snapshot of Economic Woes
By PETER S. GOODMAN
Published: December 21, 2008
COLUMBIA, S.C. — Even before the job fair opens, the line snakes into the parking lot of the state fairground, a muted parade of lives derailed by layoffs.
Brett Flashnick for The New York Times
Lori Harris is disappointed with her job prospects after having earned an associate degree in medical assisting a year ago. She now pays $95 a month toward $23,000 in student loan debt.
“It kills me, it eats me up inside,” said Raymond Vaughn, who has been out of work for seven months, since he lost his job as a window installer. His fiancée now pays the bills. “I go into this fantasy world where I’m like, I’m in the wrong life and I’m actually a millionaire. It really bothers me I can’t do the things I’d like for her. Sometimes you get where you feel less than a man.”
As the American economy sinks deeper into one of the more punishing recessions since the Depression, frustration and fear color the national conversation.
This city in the center of South Carolina is an ideal listening post. According to a range of indicators assembled by Moody’s Economy.com — from job growth to change in household worth — this metropolitan area came closer than any other to being a microcosm of the nation over the last decade.
This is now an unfortunate distinction. Some 533,000 jobs disappeared from the economy in November, the worst month since 1974. In South Carolina, a government panel is predicting that the state’s unemployment rate could reach 14 percent by the middle of next year.
No speculative real estate bubble can explain what is happening in this metropolitan area of roughly 700,000 people. Neither the brick Georgian homes in the city’s core nor the ranch-style houses on the suburban fringes rose or fell much in value. The financial wizards of Wall Street seem far from the palmetto-dotted campus of the University of South Carolina and the domed state capitol downtown.
Yet as the toll continues to mount from an era of financial recklessness — as banks cut credit from households and businesses, reinforcing austerity — the damage has spread here, choking economic activity at places ranging from shopping malls to factories.
“This was not of our doing,” said Doug Woodward, an economist at the University of South Carolina. “We just got swept up in the crisis of confidence.”
The Carolinas may conjure thoughts of textile mills and tobacco fields, but Columbia has a diverse economy. The state is a major employer. So is the university, along with hospitals and banks. The Fort Jackson Army base employs 9,200 people. United Parcel Service has a regional hub here. Michelin operates a tire factory next door in Lexington County. The Computer Science Corporation develops software north of the city.
Early in the year, layoffs were concentrated among factory and warehouse workers. “Now, they run the gamut,” said Jessica Horsely, a case manager at the local employment office. “You see a heightened sense of desperation. People are just grasping for anything.”
President-elect Barack Obama has pledged to spend as much as $775 billion on his economic plan, including infrastructure projects like bridges, roads and classrooms, to put people back to work.
Columbia’s mayor, Bob Coble, is consumed with capturing some of those dollars for his city. He has assembled a list of ready-to-go projects totaling $140 million that he said could generate construction jobs and propel further economic development.
Mr. Coble, a Democrat who has been mayor for 18 years, has in mind the redevelopment of North Main Street, a bedraggled corridor of hard-luck retailers that lacks sidewalks in many spots, with exposed power lines dipping down to cracked pavement. That project is already under way, putting down sidewalks and burying power lines in a $19 million first phase. An additional $54 million could complete it.
Similar projects have restored shine to Columbia’s downtown, which was in a similar state of decay a decade ago, and nurtured the Vista neighborhood, a collection of brick warehouses transformed into trendy eateries.
The mayor has also been focused on expanding the so-called Innovista project, a campus developed by the university centered on research in areas like hydrogen-powered fuel cells and biotechnology. The aim is to cluster research labs, private companies and condominiums.
“This will be a once in a generation opportunity to transform a city with projects that have been on the books,” the mayor said over breakfast at a newly opened downtown Sheraton hotel set in an old bank whose original vault has become a cozy martini bar. “These are not bridges to nowhere.”
Yet questions confront the notion of putting people to work through federal largess. South Carolina’s governor, Mark Sanford, a Republican, has been an ardent opponent of federal aid for states, branding it pork barrel spending. If the money is delivered to state agencies like the Department of Transportation, which has its own list of priorities, Columbia might be disappointed.
Despite the attractiveness of Main Street, new sidewalks have drawn few retailers. North Main Street runs through a largely poor area, making it even less likely that improvements will attract business.
At the state fairgrounds, Lori Harris, 47, waited for the job fair to open. A year has passed since she graduated from college with an associate degree in medical assisting, yet she has been unable to find a decent job.
Ms. Harris previously ran her own house-painting company, but opted for a more stable career in a growing field. She saw an ad for the degree program on television: “Come become a medical assistant!”
Now, such talk seems farcical. She is paying $95 a month toward $23,000 in student loan debt. She is living with her boyfriend, who is supporting her, not always cheerfully. She has no health insurance and cannot see a specialist for a torn rotator cuff and recently applied for food stamps.
“I tried to better myself,” she said, “and I’m getting nowhere.”
She was offered one job, as a medical technician dispensing pills to patients. The pay was $7.50 an hour.
“Forget it,” she said. “I was like, ‘Is it worth going to college? Did I waste my time?’”
She wondered if her age explains the rejections. Or her Boston accent. Or the smell of her cigarette smoking.
“It’s getting really discouraging,” she said.
As the doors opened, people filed in quietly, entering a dark warehouselike space with concrete floors.
“You want a job that makes you smile,” proclaimed a placard at a booth for Wendy’s, the fast food chain. Another sign advertised the benefits for counter workers, among them: “free uniforms.”
A Border Patrol officer stood in his olive green uniform, his laptop running video footage of Latinos running frantically through garbage strewn patches of desert, chased by helicopters and jeeps. Raymond Vaughn stopped and inquired about a job.
“You will have to relocate to the southwest border,” said the recruiter, Michael Day.
The entry level pay was $36,000 a year. But the Border Patrol was looking for people no older than 40. Mr. Vaughn was 43.
At the window install job, Mr. Vaughn made $11.50 an hour. Since his layoff, he has been living on an unemployment check of $221 a week, and on the wages his fiancée brings home from her job as a hospital receptionist. He has applied for more jobs than he can recall. “They always say they’ll call me,” he said. “They never do.”
A former high school track star, Mr. Vaughn carried himself with pride. Yet as the months passed and his car deteriorated without any cash for repairs, as his loose-handled cooking pots went unreplaced, he was sinking. Among African-Americans, the national unemployment rate is above 11 percent, with Mr. Vaughn now part of that number.
“Inside of me, I always felt like I was going to be greater than I am now,” he said.
The job fair brought more disappointment. Only one job seemed possible, a technician position at an air-conditioning company. The starting salaries were less than $10 an hour.
“Even if I work for this, I’m taking a cut in pay,” he said. “But something’s better than nothing.”
At a booth for Amcol, a collection service that specializes in overdue medical bills, a recruiter made an aggressive pitch.
“The more you do in collections,” he said, “the more you make.”
Mary Bamou waited in line, holding copies of her résumé. She has been out of work for three months, ever since she was briefly hospitalized, ending her minimum wage job as a food service worker at the university. Now, she is getting by on an unemployment check of less than $100 a week.
Ms. Bamou, 50, has experience in medical billing, a skill she figured may translate to medical collections.
“Calling people up in these times is not going to be an easy task,” she said. “It’s a job. Worst thing they can do to me after cussing me out is to hang up.”
Frank Kelly, 52, surveyed the booths and wondered how much further this slide would go.
In the 1990s, he wrote computer manuals for I.B.M. in upstate New York, earning $65,000 a year. After he lost that job, he spent a dozen years supervising a lab that tested raw materials at a brake pad factory in nearby Orangeburg, S.C., where he made more than $55,000 a year. In October, amid the rapid deterioration of the Detroit automakers, Mr. Kelly was laid off.
At the job fair, he was standing in line in a suit and tie, waiting to apply for a position at a pet food processor.
He and his wife have been living off her income as an accountant for a food distributor. One of her duties is to check the creditworthiness of customers, which gives her an uncomfortable view.
“She gets to see everybody going downhill,” Mr. Kelly said.
More information about the Homestead