Laid-off Corporate Workers Confront New Reality

Dallas Morning News ^ | 05/20/2003 | APRIL M. WASHINGTON

[CMClay]

More aid requests from once affluent seen

ALLEN – Mary Ann Knight thought she had seen and heard it all in the eight years she has worked at Allen Community Outreach, helping people make ends meet.
That is, until former upper-middle-class residents, hit hard by corporate layoffs that have rocked North Texas the last three years, began walking through the agency's doors, seeking help paying bills.
Mixed in their stacks of monthly bills that cover life's necessities are those that also cover lives the clients don't want to leave behind: $800 car payments, private school tuition that ranges from $1,200 to $2,000, mortgage statements up to $4,000, cable TV bills in the hundreds of dollars and country club dues, to list a few.
"I didn't think I could be shocked any more," said Ms. Knight. "When we tell people, 'We can't help pay those kind of bills. ... We're here to help with the basics,' they get upset with us. They'll say, 'We've always given to charity.'
"It's not like we don't want to help. But it's just that there are no funds for folks like that. They're just living way above the level in which we can help them."
Facing the prospect of losing their way of life, an increasing number of the unemployed are turning to social-service agencies for assistance for the first time. Allen Community Outreach has seen its number of clients increase by nearly 37 percent in its last calendar year, said executive director Glenda May.
Since January, the Assistance Center of Collin County in Plano has helped 2,292 residents by paying for prescriptions, utilities, mortgages and rent. About one-quarter of such charitable agencies' clients are previously unserved middle-class residents who request assistance of $4,000 to $8,000 a month, agency officials say.
Agency directors call folks new to being needy "the situational poor." They've depleted their savings and retirement accounts and struggle to cling to a lifestyle they no longer can afford.

"Our clientele has changed so much," said Kimberly Girard, program coordinator at Frisco Family Services. "We used to serve the working poor. Now it's the CEOs and former executives of companies. They've tapped out their bank accounts and borrowed from family members." Traditionally, charitable agencies have served the "generational poor" – a single mother of two who grows up poor and earns less than $15,000 annually, for example.
But the lagging economy has hit Collin County, the state's wealthiest county, particularly hard. Home to many of the telecommunications industry's top companies, the county boomed in the 1990s as newcomers flocked to fill high-paying positions.
In the last two years, though, the county's jobless rate has more than tripled, from 2 percent to 6.5 percent in March. The county has witnessed a 103 percent jump in the number of homes facing foreclosure.
Randi Lucero, 55, of Frisco is one of thousands who fell victim to the economic downturn. The marketing assistant was laid off from an electronics company after 22 years. Her unemployment benefits ended last week.
"My lifestyle is going to change drastically," Ms. Lucero said at a recent employment workshop. "I'm in an awkward situation because I support a lot of people. I also help provide for my daughter and grandchildren. There's a lot that we do, so I've got to figure a way to come up with some money."
At the Assistance Center of Collin County in Plano, Jackie Hall said cash-strapped homeowners today seek twice to three times as much in mortgage assistance than they did two years ago. Some are seeking as much as $4,000 in mortgage help a month, far exceeding most agencies' emergency assistance budgets for all their clients that range from $3,000 to $5,000 per month.
"Our funds are definitely stretched these days," said Ms. Hall, executive director.
Area social-service agencies are funded in part by the Collin County United Way, state and federal grants, and donations raised through annual fund-raisers. Said Ms. Girard of Frisco Family Services: "Just since the first of the year, we've seen an increase. Put it this way: In January, we had 15 new clients. In April, 58 new people walked through the door.
"I've had people who paid rent that was almost $1,200. I had a gentleman that wanted us to help pay $4,000 in bills. Our measly $300 assistance wouldn't get him anywhere."

Of the two groups the agencies primarily serve, many job counselors and case workers say that the 30-something and 40-something former professionals have the toughest time adjusting to sudden changes. "The people we call the situational poor are so beyond the level of what we can help with," said Ms. May. "It's like they're in denial. Some have even said, 'I want my United Way donation back.' In many ways, they're actually worse off than the single mother we normally help because they've never had to deal with adversity."
Tim Brown of Frisco, who was laid off by a small software development company 14 months ago, did everything society deems necessary to be successful: he earned a college degree, is highly skilled and eventually earned a six-figure salary.
"I still carry a lot of anger around with me," said Mr. Brown, who has since returned to graduate school for a master's degree and has tapped into his savings and retirement funds to support his wife and three children. He recently sought job-counseling assistance at Frisco Family Services.
"I don't know what the situation is going to bring me in the next six months. I was talking to someone who said, 'You're lucky you're getting your master's degree this summer,' but I don't know how lucky I am. The times changed so quickly, and it didn't allow a lot of planning to come along with that."
Wendy Darling, a career development coach for Frisco Family Services, said highly educated out-of-work professionals tend to identify with their professions and lifestyles more than the working poor.
"We identify so much with our jobs," she said. "For a lot of people, that's who they are. A lot of them are still attached to their salaries and the work they did. We all like our comfort zones. It's hard for them to adjust and accept their current circumstances before it's too late."
Several human service agencies have shifted their focus by providing job-coaching workshops and counselors to help the struggling cope and consider new careers.
"We're trying to get people to think out of the box and accept they may not make six figures any more – but is that so bad?" said Ms. Darling. "I think the positive lesson that could come out of this is that we as a community need to reach out to help our neighbors and get back to the basics in life.
"It's OK to have a nice home and nice things, but when they're gone, that doesn't mean you lose your soul."

[RomanCatholicProlifer]

The world owes no one a living, regardless of where your MBA is from. I am sick and tired of these whiney cry babies who have forgotten how to work, and feel the world owes them something because they were foolish enough to be blindly loyal to some faceless, soulless corporation.

[Prodigal Son]

Many of those people are still living the same way even after having gone through bankruptcies.

Yeah, I just can't see living week to week or relying heavily on credit myself. I understand why other people do so but you gain so much by breaking out of that cycle. You gain independence. Not just financially but in your mind as well.

I haven't owned a television since 1991. I'm not exposed to advertising in this form any longer. When I walk down the aisle of a supermarket or a department store all products are equally unfamiliar to me. I have no special urge to consume any one particular product.

The only credit my wife and I have used in the past ten years is a mortgage. We wanted to pay cash for the house (and could've) but we also wanted to make some major rennovations to it so we took a small mortgage. We've just bought it and we'll have it paid off soon (or rather the people we rent it to will pay it off for us). We use credit cards but only for the insurance on goods bought and transactions they afford. The balances are always paid off in full every month automatically. We purchase cars with cash. A car is a tool to us, not a status symbol. We purchase the one that best suits what we'll be doing with it. We apply that across the board to everything we do.

What I'm driving at is (and you already understand this) I don't pay the man in order to get a load of junk I probably don't need anyway. Just the money you save on interest paid is like an investment. What the average person spends on paying interest for credit they could easily take a luxury vacation every year to an exotic location. It just aint worth it to pay the bank when you could be treating yourself and all it takes is a little discipline.

[<1/1,000,000th%]

Rich Democrats.

[ladyjane]

The marketing assistant was laid off from an electronics company after 22 years. Her unemployment benefits ended last week. "My lifestyle is going to change drastically," Ms. Lucero said at a recent employment workshop.

Laid off 26 weeks ago and she expects her lifestyle *will* change? Her lifestyle should have changed the minute there were rumors of downsizing.

[Prodigal Son]

When you speak of 'corporations' & 'the corporate world', I am not sure I understand exactly of whom you speak.

A corporation? Microsoft is a good example. But there are thousands of other good examples out there that most people have never heard of. Supreme Corporation for example. I worked for them before I joined the military. They build dry freight and refrigerated van bodies and other utility vehicles. I'm fairly certain you are familiar with any number of corporations. They build the things you use in your everyday life.

When I speak of the corporate world or Industry I am merely referring to the economy or marketplace at large. All those companies, corporations and other service entities that make all the products and provide all the services used in our society.

In a free society, these entities are the ones that need educated individuals most. Knowledge for knowledge sake- never applied to something useful- is no more than trivia and trivial. You've heard the saying "Those who can- do. Those who can't- teach". This is the truth.

Noam Chomsky serves no useful purpose whatsoever. He is an evil piece of dung who has found a way to leverage the economy without actually adding anything to it. Although liberals slobber at his feet and hang on his every word, this isn't very useful is it? You know who has really made an impact on life? The fellow that invented the sanitary napkin. He has brought more freedom and liberation to more women worldwide than a fellow like Chomsky ever will with all his fawning and apologizing for the Pol Pots of this world. The Bill Gates', Michael Dell's the researchers at Monsanto (to name a few)- these are the types of people who bring real goodness to life. Companies like Bayer, Pfizer, Intel (and thousands of smaller ones)- these are companies that need educated people and therefore they are de facto the biggest consumers of education. They drive society. They keep the world going. They are good.

Increasingly though, our universities are merely centers for political activism. The consumers of education are increasingly getting a defective product at a time when competition is getting tougher. Industry will one day have to address this. While we sit around and argue about standardized tests for teachers and students, while we quibble about whether school should be a place to learn social skills or to learn facts and critical thinking, industry is the one that suffers an actual monetary loss and hence all of society suffers as well. Money talks- or it should in a free society. Industry will eventually find a way to solve this equation- hopefully at least.

[harpseal]

It really does not much matter how much education a persaon has per se when people are faced with no jobs because H1B visa people are filling them or because companies have sent all their functions off shore, Masters in engineering don't need it or a BS or a PhD all those functions are done in China at a cost of $4/hour. Oh yes we have a few senior engineers left here but we will eventually move that offshore also. You have your MBA? Sorry we have farmed our financial anaysis positions out to India.

Can you say would you like fries with that? Maybe as long as you will work at minimum wage put up with whatebver hours we give you and we don't find an undocumented person who we can get for less.

[Jason_b]

bump

[Prof Engineer]

Rich Democrats.

You're probably right. This area the article mentions is overwhelmingly Republican, but I'm still surprised at times by the occasional monster Lexus suv with the "Kirk for Senate" or "Gore-Lieberman 2000" bumper sticker.

[Prodigal Son]

Aye, this is an issue too. But I was addressing a specific comment made in the article:

The times changed so quickly, and it didn't allow a lot of planning to come along with that." (made by a man talking about getting more education).

There is no way the education-industry symbiosis can address that problem. It is a problem for the politicians.

Out of curiosity, how would you solve that problem? I hear lots of ideas but have never really made up my mind on the subject.

[showme_the_Glory]

"IMHO, everyone, at least twice a year, should have a "I just lost my job" drill. Think about the implications, etc. You'll be better off."

IMHO I couldn't stand it twice a year. Once this year was plenty for me, even without a $4k a month mortgage.

[taxcontrol]

"A financial reversal without a prospect of a full recovery causes a lot of suicides among men."

Captain, while I understand you reasoning, I tend to disagree. It is the lack of purpose in a man's life that leads him to turn to measuring his self worth in material things. It is this miss placed purpose that when lost, causes such reactions.

It is a shame that religon in America has lost sight of the fact that "purpose of life" is what people turn to religon to supply. To my mind, all of us who hold Christian values can and should do more to get this simple message out to our neighbors.

[ican'tbelieveit]

I think that is what men perceive will happen. Many times, just being honest with a woman is the best way to gain her loyalty and assistance.

[Steel and Fire and Stone]

I was an independent software consultant for about 10 years. Overall, we did pretty well, but it's a high risk career path, and there were definite "ups" and "downs" we had to deal with. One had to have a strong sense of one's personal self-worth and abilities to make it through the tough times, and it also requires a habit of saving like a child of the depresson-era. I saw the writing on the wall about three years ago (i.e. declining IT, explosion of foreign H1B workers, etc)), and wanted to cut down on the travel so I spend more time raising my kids. So, I "bailed" at the right moment, got a job with a consulting company, lost 1/3 to 1/2 in compensation, survived 4-5 layoffs, and am still treading water. Many, many others in my situation, including a friend (ex. Naval Academy, Marine Pilot, converted career IT worker) lost their jobs, have never recovered, and have lost everything.

We always had the "count-down" plan, though, about what we would do to cutback if I was between contracts for an extended period of time. That was a business plan, and it involved every asset we had, and shutting down services we consider "critical", such as the kids school. We were never in a situation which required us to alter our lifestyle in more than minor ways (i.e. elminating dining out, vacations, etc.), but we had two six month periods over about a three year period that were scary times.

I agree about the "manhood" issue, though it's probably true also for any woman who is the sole provider. But there's more to it than that. Some folks, and I'll use myself as an example, gave up a lot to get to the point where they are in life. When I was in high school, I had lots of kids I knew who spent every spare hour and nickel having the party of their lives. I studied my butt off, saved money, ran two or three of my own "businesses" between 10 yrs and 14 yrs old before I started a working regular job ... it wasn't "fun". Same applies for college. While most of the kids I knew lived in the college dorms, had loads and loads of social fun, I worked 40 hours a week to put myself through college, lived with my parents, commuted an hour to school, had no "vacations" or weekends off for five years, and never even had time for a "date".

Then I went into the Navy, and did the same pattern again, i.e. Navy schools, a tough sea tour, etc. When I left the Navy, there was (another) recession, and two great jobs I had "locked in" 60 days before my end of service, evaporated with corporate downsizing two days before I detached. I was out of work for six months, embarassed to be living at home, debt free because I'd paid my college loans off with my Navy pay, but with little savings. My college degree plus 48 months managing 100's of men and $millions in material weren't enough to get me an entry level corporate job during that recession.

So, I "started over" again, took an Information Technology job that paid less than my Ensign pay four years earlier, went through Ross Perot's "boot camp" IT training, and started a new career. However, in the last 5-7 years, my government has used the value of green-cards to in-effect, offer my job to the lowest international bidder. I'm a guy in my 40's with good experience, but there are lots and lots of good kids - foreign nationals in their 20's with 4 years work experience, a top notch education, etc. , who are willing to take my job at about the entry-level pay of about 15 years ago. (The companies still pay perhaps 70% of the market scale, but brokers get most of the money, and the actual workers are getting about 1/3 my compensation level.) There are lots of skilled service guys who make more than I can today, with a good education, with a great resume, with top-notch skills and certifications, etc.. It's a competitive world out there for everyone, but I'm competing against the US government, and I can't beat the promise of a green card and live in the (US) promised land. These kids would work for nothing just to live in the US.

This may sound like some guy "crying", but my point is not how tough I've had it, but that my experience is very, very typical of many middle-aged Americans. There are lots of folks out there who have paid their "dues", who have believed that hard work will pay off, and due to situations (industry downturns, industry realignments, etc.) the pay off just isn't there. When a guy in midlife has to liquidate 20 years of savings, his home, and and other possessions just to stay alive, he knows it's likely he'll have to work harder the rest of his life just to keep a roof over his head, let alone return to his previous "lifestyle". Life is more than "bread", and there are indeed higher priorities than one's possessions. However, time is one thing we all have a finite amount of. Once lost, it cannot be recovered. This reversals are lost time, as much as they are about possessions. It can be crushing to look in the mirror, see the wrinkles, lines, and the 30 lbs age has put on you (ok...ok.. it was those twinkies too), it can be tough to "buck up", recover your composure, and redirect your life into another direction. Many of us had a tough time developing experise in one profession. I've done it in at least two (actually three or four, if you count my work experience before college graduation). Not everyone can make the adjustment.

I've "been there", "done that", and feel for everyone in this situation. Our family is are blessed that I have a mediocre job in a dying industry, which is gradually being outsourced to India and other 3rd world countries. So, I'm looking for my next career ... gotta stay ahead of circumstances. This one will be one from which no H1B can displace me.

FReegards, SFS.

[Gunslingr3]

We won't be living like serfs unless we end up with another fascist president like FDR who tries to micromanage the enormous economy from Washington D.C. We are however, apparently at the crest of another Kondratieff Wave:

Here is something interesting from the February 2000 Richebacher Letter, a financial newsletter, maybe it's 'crazy talk', but I offer it as food for thought about what has occurred (is occurring) "A friend of ours now living in London told us sometime ago of an astounding conversation he had in the early 1970s. At a lunch with Mr. Greenspan (when he ran his own economic advisory service), they discussed gold and the Kondratieff Cycles. Mr Greenspan stated that he would love to be head of the Fed when the Kondratieff Cycle was due to end in the late 1980s. He was quite sure that he could overcome the deflationary impact of the cycle by injecting sufficient credit into the system to offset deflation. He ended the conversation by saying that should he fail to achieve his objective, there was a chance that when the cycle did end, the resulting Depression would be by far the biggest the world has ever known. He did become head of the Fed. The amount of credit he has pumped into the system has been on a scale never before seen in economic history. So far he has been successful. In the end, nevertheless, his final statement will prove correct."

[q_an_a]

This story shows that 20/20 hindsight is a bunch of bunk. Just 12 years ago there was so much empty housing and offices space in Dallas that eveyone thought the world had come to an end. One story said Dallas had more EMPTY office space than some cities had in their downtown TOTAL.

Then the banks got turned around, the internet jumped, telecom went crazy and the cycle was repeated. This time the banks aren't closed. This time unemployment is 6% not 12%. In 1990 100,000 dollar condos foreclosed for 25,000 and buyers got rich. That is not happening this time either.

[razorback-bert]

who request assistance of $4,000 to $8,000 a month

An nut of $44,000-$96,000 after taxes, wonder how many have refinanced their house to pay credit card bills?

[harpseal]

To me the two issues are intimately related. The lack of jobs which provides the real basis for the actual learning seems to require a baseline of education. If the education is not there then there is a reasonable basis to question the ability to perform at the base level required and futher to have the prospective employee aquire the additional sjills necessary to excell in the job.

My personal persciption for this is contained in the following post which I wrote. Saving our Economy. I welcome any comments and I would only hope some movers and shakers in the Republican Party take action on these points.

[TomSmedley]

The article does not say which specific jobs are available and out there for these unemployed people. Many unemployed do not expect six figure jobs anymore, but where, specifically, are the jobs for $35,000 - $60,000? What address, and which companies have these available jobs and how do they apply for them? Post the addresses for all to see.

Heard a lady speak the other day, a fellow technical writer, of going from $60K to $16K in two years. During this same period, my income fell to 60% of its prior peak -- but my God has been faithful.

It's really good to have "invisible means of support" when the obvious props are collapsing!

[MrCompletely]

"Agency directors call folks new to being needy "the situational poor." They've depleted their savings and retirement accounts and struggle to cling to a lifestyle they no longer can afford."

---

The road to a new job in the technology market is a long one. In Austin, layoffs and pay cuts began in 2001. Wall Street and politicians of both parties claimed then that a recovery was around the bend. It didn’t happen, but the claims continue. What hasn’t been used from savings to weather out the storm has been depleted by losses for many in the stock market. All the while, corporations outsourced $80,000 American jobs to Indians happy to do the same job overseas for $5,000. Wall Street demands corporations to meet the quarterly expectations of the street. Politicians bicker about judicial appointments and redistricting. In the meantime, the jobs that are created (or replaced) are either shipped overseas or performed domestically by H1Bs for lower pay.

Yes, there are many who lived beyond their means, and who should have planned for a “rainy day” that is beginning its third year. Yes, there are many who are still in denial about dropping the country club membership, the private school, and the $800/month lease on the Mercedes. Yes, there are those who struggle to maintain a lifestyle they can’t afford.

Many more have accepted the new reality, however, but find that the options in the new reality are wanting. There is now a 6-year supply of million dollar homes on the local market, and upper end prices have fallen up to 30%. The unemployment rate is now steady, but the new jobs created locally now pay an average weekly salary of $280. The old salaries are an old memory. Many have come to the realization that Washington looks the other way while jobs are exported, and Wall Street doesn’t care as long as street expectations are met. Some corporations are loyal to upper tier management, but not much else.

Why not provide corporations with the tax incentives to keep jobs here? Why are we freeing dividends from taxation so that corporations will be encouraged to fund the dividends on the backs of those who had their jobs exported?

[anniegetyourgun]

I've often wondered why folks like this don't sell their 'big hats'. However were these people thinking they were going to survive retirement if not by selling the 4,000 sq. ft. house for one of 1600 sq. ft? Or moving from 3 vehicles to 1? Seems to me that they could start early with this concept.....