Posted on 10/19/2007 6:17:22 PM PDT by festus
NEW YORK - The calculus of living paycheck to paycheck in America is getting harder. What used to last four days might last half that long now. Pay the gas bill, but skip breakfast. Eat less for lunch so the kids can have a healthy dinner.
Across the nation, Americans are increasingly unable to stretch their dollars to the next payday as they juggle higher rent, food and energy bills. It's starting to affect middle-income working families as well as the poor, and has reached the point of affecting day-to-day calculations of merchants like Wal-Mart Stores Inc., 7-Eleven Inc. and Family Dollar Stores Inc.
Food pantries, which distribute foodstuffs to the needy, are reporting severe shortages and reduced government funding at the very time that they are seeing a surge of new people seeking their help.
While economists debate whether the country is headed for a recession, some say the financial stress is already the worst since the last downturn at the start of this decade.
From Family Dollar to Wal-Mart, merchants have adjusted their product mix and pricing accordingly. Sales data show a marked and more prolonged drop in spending in the days before shoppers get their paychecks, when they buy only the barest essentials before splurging around payday.
"It's pretty pronounced," said Kiley Rawlins, a spokeswoman at Family Dollar. "It seems like to us, customers are running out of food products, paper towels sooner in the month."
Wal-Mart, the world's largest retailer, said the imbalance in spending before and after payday in July was the biggest it has ever seen, though the drop-off wasn't as steep in August.
And 7-Eleven says its grocery sales have jumped 12-13 percent over the past year, compared with only slight increases for non-necessities like gloves and toys. Shoppers can't afford to load up at the supermarket and are going to the most convenient places to buy emergency food items like milk and eggs.
"It even costs more to get the basics like soap and laundry detergent," said Michelle Grassia, who lives with her husband and three teenage children in the Bedford-Stuyvesant section of Brooklyn, N.Y.
Her husband's check from his job at a grocery store used to last four days. "Now, it lasts only two," she said.
To make up the difference, Grassia buys one gallon of milk a week instead of three. She sometimes skips breakfast and lunch to make sure there's enough food for her children. She cooks with a hot plate because gas is too expensive. And she depends more than ever on the bags of free vegetables and powdered milk from a local food pantry.
Grassia's story is neither new nor unique. With the fastest-rising food and energy prices since the 1980s, low-income consumers are stretching their budgets by eating cheap foods like peanut butter and pasta.
Industry analysts and some economists fear the strain will get worse as people are hit with higher home heating bills this winter and mortgage rates go up.
It's bad enough already for 85-year-old Dominica Hoffman.
She gets $1,400 a month in pension and Social Security from her days in the garment industry. After paying $500 in rent on an apartment in Pennsauken, N.J., and shelling out money for food, gas and other expenses, she's broke by the end of the month. She's had to cut fruits and vegetables from her grocery order — and that's even with financial help from her children.
"Everything is up," she said.
Many consumers, particularly those making less than $30,000 a year, are cutting spending on nutritious food like milk and vegetables, and analysts fear they're further skimping on basic medical care and other critical services.
Coupon-clipping just isn't enough.
"The reality of hunger is right here," said the Rev. Melony Samuels, director of The BedStuy Campaign against Hunger, a church-affiliated food pantry in Brooklyn.
The pantry scrambled to feed 5,000 new families over the past 12 months, up almost 70 percent from 3,000 the year before.
"I am shocked to see such numbers," Samuels said, "and I am really concerned that this is just the beginning of what we are going to see."
In the past three months, Samuels has seen more clients in higher-paying jobs — the $35,000 range — line up for food.
The Regional Food Bank of Northeastern New York, which covers 23 counties in New York State, cited a 30 percent rise in visitors in the first nine months of this year, compared with 2006.
Maureen Schnellmann, senior director of food and nutrition programs at the American Red Cross Food Pantry in Boston, reported a 30 percent increase from January through August over last year.
Until a few months ago, Dellria Seales, a home care assistant, was just getting by living with her daughter, a hairdresser, and two grandchildren in a one-bedroom apartment for $750 a month. But a knee injury in January forced her to quit her job, leaving her at the mercy of Samuels' pantry because most of her daughter's $1,200 a month income goes to rent, energy and food costs.
"I need it. Without it, we wouldn't survive," Seales said as she picked up carrots and bananas.
John Vogel, a professor at Dartmouth College's Tuck School of Business, worries that the squeeze will lead to a less nutritious diet and inadequate medical or child care.
In the meantime, rising costs show no signs of abating.
Gas prices hit a record nationwide average of $3.23 per gallon in late May before receding a little, though prices are expected to soar again later this year. Food costs have increased 4.5 percent over the past 12 months, partly because of higher fuel costs. Egg prices were 44 percent higher, while milk was up 21.3 percent over the past 12 months to nearly $4 a gallon, according to the Bureau of Labor Statistics.
The average family of four is spending anywhere from $7 to $10 extra a week — $40 more a month — on groceries alone, compared to a year ago, according to retail consultant Burt Flickinger III.
And while overall wage growth is a solid 4.1 percent over the past 12 months, economists say the increases are mostly for the top earners.
Retailers started noticing the strain in late spring and early summer as they were monitoring the spending around the paycheck cycle.
Wal-Mart and Family Dollar key on the first week of the month, when government checks like Social Security and public assistance generally hit consumers' mailboxes.
7-Eleven, whose customers are more diverse, looks at paycheck cycles in specific markets dominated by a major employer, such as General Motors in Detroit, to discern trends in shopping.
To economize, shoppers are going for less expensive food.
"They're buying more peanut butter and pasta. And they're going for hamburger meat," Flickinger, the retail consultant, said. "They're trying to outsmart the store by looking for deep discounts at the end of the month."
He said the last time he saw this was 2000-2001, when the dot-com bubble burst and the economy went into a recession after massive layoffs.
For now, low-price retailers are readjusting their merchandising and pricing.
Wal-Mart is becoming more aggressive on discounting. It announced Thursday it is expanding price cuts to 15,000 items, ranging from Motts apple juice and Progresso soups to women's fleece tops, heading into the holidays.
Family Dollar, whose food offerings were limited to candy and snacks until two years ago, has expanded its mix of groceries like fruit cups, cereal and such refrigerated items as milk and ice cream while cutting back on shoes. This summer the chain began accepting food stamps.
Food pantries are also getting creative. Samuels said her church, Full Gospel Tabernacle of Faith, just started offering free cooking classes to teach clients who are diabetic or have other health conditions how to prepare vegetables like squash. It's also offering free exercise classes.
"We are trying to make them health conscious," Samuels said. "It's not right to give them just anything. Our mantra is eat well and live well."
Also, don’t forget that the Chinese made DVD player would most likely break a few years down the road, most stuff made in the U.S. or even Japan/Taiwan, lasted longer. Right now as I type this, I’m listening to classical rock music on WABC 770 kc out of New York City on my grandfather’s 1953 Philco 5 tube, “All American,” two-band radio. I think the tubes might be original too. It was made in the U.S. My 1982 Zenith TV, I’m sure it has some foreign parts on the electronic compenent level, but it was still made here in the U.S.
I’m of the opinion that all youngsters should go through socialist, Ayn Rand, Herman Hesse etc. phases as part of their education. There is value in discovering a writer or philosophy and then outgrowing it or them.
I tend to be deeply suspicious of those folks who hold the same views at 50 that they held at 20.
As I recall, the original topic was living pay check to pay check...this happens not only in the poorer communities but in the educated, wealthy community. That may be where we differ in opinion.
I can’t say that common sense is a common place commodity. If there is no common sense to administer a high IQ, one might still be living under a bridge. Your reference to the Chinese leaves out one part of the equation...opportunity.
This may be a “post industrial” world, but we still need the worker bees, who may not work in the white collar world.
Do you have any idea what normal I.Q. plumbers make in the course of a year? (Talk about job security) ;~)
The article is written as propaganda designed to make people believe that the economy has gone bad (presumably under Bush's leadership). This article is a Democrat campaign ad and nothing more.
Exactly. If it’s 25% cheaper, but you have to replace it in a year, you’ve lost money, not saved it.
I’ve got a couple old radios like that, but none working as of now unfortunately.
Also you answered the question from my freepmail in another post. A.Pole was great.
Heh, my 20 year old Nintendo still works, but the X-Box I bought last November died.
But unlike many on the government dole, we paid with low wages, long hours and a couple of overseas wars to contend with. No we did not live in government housing.
“What we really need is the Government to come in and make life easy!”
You would think that would work but it doesn’t. I can give numerous examples.
Why are you so hateful against people that need help?
/s (as if i had to)
Whether it be Outback, Applebees, Ground Round, Bugaboo Creek, Olive Garden, On The Border, Macaroni Grill or any of the dozens of other cookie-cutter casual dining joints that saturate American from coast to coast, you will find them absolutely slammed on Friday and Saturday nights with up to an hour wait for a table.
And it's not cheap eating in these places either. For a typical family of four, the bill can easily reach $50 before the tip - even more than that if Mom gets a margarita or two and Dad gets a 22-ounce Killian's on draft.
And these casual eating joints are perpetually understaffed and always looking for help. If the economy was so bad, you'd thinking people would be snapping these jobs up for some extra cash. But no. Instead you get these poor, harried waitresses trying to take care of 12 tables at once and that's why your "Monster Margarita" finally comes to the table with the ice half melted.
So I'm just not buying into articles like this.
true
Actually, I’m not hateful to people who need help. Here is an example of how government can mess up things. Let’s take the 2.3 cost of living increase for 2008 for Social Security recepients. It will be approximately $24 a month, less than $1 a day. We all know how the prices of everything is rising. Let’s say those recepients living in government subsidized housing. Their rent can actually rise more than the cola! I know it can because it happened to me. Not complaining much about it. Just
pointing out a fact.
“The article is written as propaganda designed to make people believe that the economy has gone bad (presumably under Bush’s leadership). This article is a Democrat campaign ad and nothing more.”
I didn’t read it with that in mind and figured this would degenerate into the usual remarks that accompany these types of articles.
Some folks may be doing quite well in their little corner of the world but others aren’t. I don’t have solutions but I don’t nit pick and name call those that have a hard time making ends meet. Hits too close to home on occasion.
Near sixty. Parents neither undermined or helped much. One out of seven kids. Father sole provider...like most parents in those days. Parents in those days had pretty much a hands off attitude towards their children. Lower middle class. But now I have two sisters (very liberal)who both have a net worth over a million. I don't. No complaints from me.
I had started a small collection of old radios and tvs some time back, but I realised I was either going to have to figure out something to do with them or buy a warehouse.
Like to think at some point I’ll have more time to learn to rehab them. In the meantime, that collection has been replaced by a pile of cheap electronics that worked for a few months and have no hope of repair.
Of course it's true, but dishonest. In a population of 325 million, you can find, always, even in the best of times examples such as those cited. There is never a time when they are totally absent, for a variety of reasons totally irrelevant to this discussion.
Then there are always the "poor by choice", who spend first on drugs, alcohol, tobacco, large screen TV, sports attendance, the latest model game box, ipods, camera phones for whom planning ahead is a concept that doesn't exist in their universe, since a riot or two and mass protests will trigger increased benefits from the government fairy...
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