The United States economy is affecting the breadth and depth of the country. The unemployment rate continues to rise and consumer confidence is shaky, despite the government’s efforts to stabilize the situation. Elisa Embers, a 31-year-old financial analyst, understands unemployment well. Standing in line in the unemployment office, she nervously twists her hands, shredding a Kleenex and wrinkling the papers in her hand. “I’ve been off work for four months. Now I have to come in and prove I need the help in order to keep getting my check. ” Her fear and frustration are as obvious as the tears in her eyes.
“I’ve looked and look and nothing’s out there. ” Embers isn’t alone. According to the Bureau of Labor Statistics, unemployment rose to 8. 9% from 5% this time last year and state unemployment offices are running out of money. “When the states can’t help, when the money is gone, then the country is going to be in real trouble,” said Alfred Mayer, Ph. D. , an economics instructor at California State University, Fullerton. “Consumer confidence is up from April, but still not as high as it should be. I hope I’m wrong and that things will turn around soon, but I doubt it.
” “I’m just not spending money right now,” said Bob Everett, 72. “I guess I’m preparing for the worst. ” The Los Angeles Times reports that retail spending has dropped as well, down 2. 7% from last year. The largest drop in retail sales is in the gasoline industry, dropping 15. 7%. Everett has canceled his summer vacation plans due to the hardship. “With prices going up and my [social security] income hasn’t kept up. It’s been really hard. ” In Santa Ana, Nicole Canter, 22, worries about the future of her waitressing jobs. “It’s affecting everyone,” she said.
“I still have a job, but my hours have been cut and business is poor in general. ” Canter believes the economy as a whole is bouncing back and will soon translate into an improvement in business. “I have to believe it’s getting better, otherwise I’ll go mad with worrying. ” Things are difficult in Tustin as well. 72-year-old Geoffrey Simonson had his retirement planned and was set to live out his days in comfort, but his investments took a 40% hit and now he doesn’t know if he’ll have enough. “I just get so angry I could scream. But I don’t want to cash in now or I’ll lose too much.
I’m just going to wait it out and hope that things get better. ” Geoffrey is one of millions who lost money on the markets downward spiral. Fullerton resident Charles Gothart, 42, was laid off in April of 2008 and has struck out finding new work. “I’ve been living off my investments but the market has taken such a vicious hit that they’re not earning what they should be. ” Forced to eat into his capital, he has a rather pessimistic view of the economy. “It’s crap. Nothing short of that. We’ve all lost so much and so much of it was avoidable if the right measures had been taken.
For that, they should not be forgiven. ” Mayer believes that the worst is over and that the economy will see a gradual improvement over the next nine to twelve months. “Contrary to the opinion of the V-shaped recovery, this will be more gradual. ” The two prevailing schools of though are that the economy has hit bottom and will begin a recovery. The difference lies in how fast that recovery will occur. The V-shaped recovery is a rapid improvement in all economic factors, sending the U. S. back to where it was two years ago. They believe that things were bad but the public overreacted and the economy will come back.
The more predominant theory, and the one Mayer subscribes to, is that while the economy is recovering, it will take time – months if not years – to see the same degree of improvement. Both agree that the worst is over and the second half of the year will be better. This is welcome news to consumers. Both young and old have been affected by the instability of the economy. Sixteen-year-old Bethany Mills has had to move three times and is now living week-to-week in a hotel with her mother while her father searches throughout the state for work.
Tears fall as she speaks, her head bent down to the floor. “It’s so shameful. I don’t want to tell my friends. I just won’t let them come home with me. ” Bethany’s mother, Isador, tries to keep things positive. “My husband is interviewing for a new job tomorrow. I know he’ll get it. I know he will. ” The Mills family lost their home seven months ago, unable to keep up with the payments. This trend is growing throughout the country, with one out of every 374 homes in foreclosure. Nevada has the greatest number of foreclosures with one in every 68.
Families are being forced to move to different cities, into tiny apartments, into hotels or out on the streets. California had more than 150,000 residents move out of state due to the high cost of living. A mere ten years ago, the budget was balanced and the outlook for the country looked promising. Now, the Congressional Budget Office reports that the national debt stands at $11,305,673,498,034. 18 as of May 25, 2009. This is a truly scary figure as the government struggles to keep spending in check, balancing the war abroad with the battle for financial recover at home.
“The national debt is frightening,” Susan Smitton, 45, worries. “I’ll be eligible for social security in thirteen years and there won’t be anything there. And in this economy, it’s impossible to put anything aside when it all goes to survive. ” Smitton had grown a modest portfolio by investing in stock; however, the events of the last few months have virtually decimated her value. “I’ve lost 80%. I was into the wrong things. ” The Dow Jones has dropped significantly from last year, but it has been stabilizing over the past few weeks, rising and falling according to the whims of the market.
“People were in a panic last year but that fear is calming down and the market is improving,” Mayer says. “The Dow Jones and NASDAQ are indicators of how well the market is doing, but they’re not the only signs. ” Both the Dow Jones and NASDAQ have regularly finished down, but the numbers are not as drastic as before. “It’s a gradual shift, but a positive one,” says Mayer, predicting a steady rise in the market. Bloomberg. com reports that the mortgage rates are up from last month as well, to 5. 35%, increasing from 4. 94% last month.
This rise is directly related to the confidence in the United States economy and our astronomical deficit. Financial analyst, Ben Bernanke believes that the national debt threatens the nation’s stability but feels that the recession will soon be ending. Consumers hope that he is right. Nicole Forrester, 22, has seen a dramatic fall of sales in her flower shop, with sales dropping 64% from last year. “I don’t know how much longer I’ll be able to hold on. I’m terrified. ” The crisis is not limited to the large businesses like AIG or Bank of America. Small businesses are closing across the country.
From the corner butcher shop to the small dry cleaners, every facet of the economy is affected. “Business go down,” said Chi Lin, 62, owner of Best Cleaners. “Is not good. ” His business has fallen by nearly 50% since last year and Lin and his wife are pouring every hour of their day into keeping their business alive. They’ve offered coupons and discounts, which have lessened the drop but did not halt it. Charles Godwin, 42, has been one of the lucky ones. He was laid off last year, after having worked there for fourteen years, but thanks to wise planning on his part, his investments have held him through.
“I got a severance package which lasted a few months, but mostly, it’s investment income that’s kept me going,” he says. “I’d like to get a part time job so I stop eating at my capital, but overall, I’m better than a lot of people. ” Godwin hasn’t spent a lot of time searching for work and recently had his first interview since losing his job fourteen months ago. “I loved my job and I guess part of me is terrified to end up somewhere I hate. So I don’t look. ” He realizes that this is illogical; however, as he puts it, “there aren’t a lot of jobs out there anyway.
I’ll wait until the market shows more promise. ” Some people have been completely devastated by the economy. April Young, 54, is an elderly caregiver who is barely hanging on. “My client lost so much money in the market that my hours were cut to one half-day a week. I haven’t been able to find supplementary work. ” Young is one of the workers that falls through the cracks. She is self-employed so she doesn’t pay into unemployment or disability. Because she had knee surgery in December and will be having another on June 11, she is technically disabled; however, she doesn’t qualify for disability.
The only benefit she’s been able to get is food stamps so she is able to eat. “My daughters have been helping me. But I’m going to have to move as soon as I recover from my surgery. I can’t go yet, but I can’t make the mortgage payment either. I keep hoping that I’ll find work and get back on my feet. ” In the meantime, Young is selling various items she finds at yard sales on eBay. She’s not making a lot, but it’s some income at least. “Every little bit helps,” she says. Luiz Gonzales wasn’t so lucky. “The bank took my home, they took everything.
” Gonzales spends his days outside of Home Depot trying to get work, but most days, he stands all day without an offer. “I sleep under bridge. My family stays with friends, but they soon be without home too. ” Gonzalez stares into the distance, not quite meeting my eyes. His gaze shifts and he looks at me again. “I should be able to support my family. It is my duty. ” The current situation is not as bleak as it was, but the economy has a long way to go before it is healthy again. “It’s going to be a long road, says Mayer. “But we’re heading in the right direction. That’s a start. ”