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TEXT OF STORY
Bob Moon: Today’s unemployment news makes it painfully clear how many more victims the financial crisis is claiming every day — 651,000 more Americans
out of work.
That’s not just some statistic. It’s a flesh-and-blood reading on what’s happening out there.
For some, the recession represents their first reversal of fortunes.
But as Marketplace’s Jeff Tyler reports, zigging in and out of work is becoming an all too familiar game of financial musical chairs for a lot of us.
Jeff Tyler: We expect to trade-up, from job to job. But often, for every two steps forward, there’s one step back.
Frank Stafford: In the real world, things are not stationary. People’s economic fortunes vary substantially from year to year.
University of Michigan economics professor Frank Stafford directs the Panel Study on Income Dynamics. It’s tracked almost 8,000 families for 40 years.
Stafford: Over the last few decades, there’s been increasing variability in all the different aspects of life. Ranging from income to people’s wealth position to people’s stability with employers.
Instability is something 31-year-old Todd Krost knows well. He had a job in Michigan as a sales rep. But his clients were tied to the auto industry. When the industry plunged, it took Todd with it.
Todd Krost: I’m unemployed as of December 15.
Now he’s a stay-at-home dad. The family lives in the Detroit suburbs in a house that’s worth about $40,000 less than they paid for it.
Krost: If I were to find another job somewhere else, it would be difficult for me to move.
It’s also become more difficult to move up and attain a better standard of living than the last generation. John Morton is director of the Economic Mobility Project. He says that, adjusted for inflation, thirty-something’s like Todd, are making less than their parents did.
John Morton: That median income has fallen by 12 percent. So, the median income back in the mid-70s was around $40,000 for men in their 30s. Today it’s around $35,000.
Looking back, Todd Krost says his dad’s jobs got better and better.
Krost: Whereas mine, in hindsight, have been: good, OK, bad, none.
Todd’s dad, 55-year-old Mike Krost, lives near Peoria, Ill. Like his son, he’s also in sales.
Mike Krost: I can remember in my early days that the jobs that I had were with employers I got to know on a personal basis, where, with my son, they seem to be just jobs and there is no relationship to the employer-employee.
The lack of social ties creates even more volatility. And it’s getting worse. Reversals are happening faster and they’re more extreme. Some folks get shaken off the ladder and join the ranks of the poor, at least temporarily. Again, Frank Stafford.
Stafford: The prevailing concept of poverty as some sort of persistent condition is not correct.
40-year-old Michelle Patterson didn’t know she was in jeopardy. The Newark, N.J. native thought her company, which publishes educational books, was on solid ground.
Michelle Patterson: I actually thought I had a secure job. I actually thought the company I had worked for was recession proof.
On paper, she’d done everything right. She got an MBA. She bought a condo. And she finally felt secure enough financially to concentrate on her personal life.
Patterson: I signed up for eHarmony. And I’ve lost 40 pounds. And then this happens.
In January, she got laid off.
Patterson: It did feel like going off a cliff.
In the midst of the worst recession since the Depression, how long will it take to bounce back?
Frank Stafford says the trends aren’t encouraging.
Stafford: There’ve been more widespread incidences of what we could call a persistent shock. So you lose your job and you don’t just take a year or so to get back on track and recover to your income, but a more protracted period.
That would be tough for Michelle Patterson. She has enough savings to last about two months. Her condo — that toe-hold on middle-class stability — is back on the market. Undaunted, she’s looking for work full-time, and hoping for a bounce that brings her back up.
I’m Jeff Tyler for Marketplace.
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