Crisis aside, many face other economic woes

Allison Linn Senior writer • Profile • E-mail

Lisa Holt Johnson isn’t worried about the financial crisis on Wall Street; she’s too busy worrying about the financial crisis in her own home.

Johnson, 43 and a single mother with two kids, makes $9.25 an hour working in property management in Gastonia, N.C. To make ends meet as food and fuel prices have risen, every month Johnson plays a juggling act with her bills, often asking for extensions on some so others can get covered.

When all the bills are paid, there’s often only $35 or $40 left for the week’s groceries, compared with $65 or $70 a year ago. Extras that she could once afford — such as a trip to a museum with her 12-year-old daughter, or to Toys "R" Us with her 6-year-old son — are out of the question now. Although she has health insurance, she recently had to cancel a battery of tests her doctor ordered because the clinic required a $550 deductible upfront, and she didn’t have the money.

Asked about the Wall Street debacle recently, she said: “I’m not worried about that. I’m worried about average living, about real life.”

The crisis on Wall Street has drawn attention away from the financial problems many Americans were already facing because of the weak economy.

Most people are paying more than they were a year ago for nearly all their necessities: food, gas, home heating, even household cleaning products. The jobless rate has been climbing steadily, and home prices continue to weaken.

U.S. businesses also are feeling the fallout as the financial crisis compounds already weak economic conditions. Companies ranging from chicken producer Pilgrim’s Pride to software giant Microsoft have fretted about the economic climate. If businesses see profits drop, that could lead to more job losses and further erode the overall economy, making it harder for everyday Americans to make ends meet this winter.

“We think this is a recession,” said David Wyss, chief economist with Standard and Poor’s.

For Johnson, who is living week-to-week and struggling just to stay above water, it can be frustrating to hear about a multibillion-dollar bailout for an industry whose executives make millions, while she’s worrying about how she’s going to make it to the end of the week with $2 in her bank account.

“It’s really bad, and I’m not on welfare — I couldn’t get it if I wanted,” Johnson said. “I’m working. I’m trying.”

Johnson buys clothes for her family at Goodwill or the consignment store. At the supermarket, she hates having to tell her kids they can’t have even a small treat, like a box of cookies, because she needs to focus on necessities like milk, eggs and oatmeal.

“I am a nervous wreck when I am in that grocery store,” she said.

For some families struggling with soaring costs, there isn’t even money left for the grocery store.

Ross Fraser, spokesman for the hunger relief group Feeding America, formerly America’s Second Harvest, said an April survey showed that food banks were seeing a 15 percent to 20 percent increase in clients — and that was before this summer’s hurricanes and flooding left more Americans in need of help.

Twenty year ago, Fraser said the food banks mainly serviced homeless and very low-income people, but economic conditions have changed that.

“What we’re anticipating and seeing now (is that) we’re going to be feeding the working lower middle class and probably the working middle class, as people are becoming squeezed by paying more for food and paying more for gasoline,” he said.

With demand high, Fraser said he and others who work in nonprofits are now worrying about whether the crisis on Wall Street will mean that some major donations dry up, adding even more stress to their organizations.

As colder weather settles in, there also is concern about how Americans will be able to pay their home heating bills. Although fuel costs have fallen from their highs a few months ago, prices remain high by historical standards.

Mark Wolfe, executive director of the National Energy Assistance Directors’ Association, said he has been heartened by the combination of lower fuel prices and more federal assistance for struggling families who need help with their heating bills. Still, he said, for most Americans salaries have not kept up with heating costs.

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