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Feeling the pinch -- More seeking services while waiting for economy to turn around
The economic turmoil is taking its toll across the U.S., including for those in the McCook area who are adapting to unemployment, high food prices and the turbulent stock market.
The first to feel the reverberations are usually those living on the edge, said Barb Ostrum of the Community Action Partnership of Mid-Nebraska. These include the elderly on a fixed income or the "working poor," those living from pay check to paycheck when an unexpected cost like a medical emergency makes other bills impossible to pay.
Ostrum coordinates a variety of services from her McCook office, including one-time payments to avoid utility disconnection and the supplemental food commodity program. But recently, Ostrum said she's been seeing people who normally would not seek help.
"We're getting calls from people we've never heard from before, who call and say, 'I've never done this before, but I was just wondering if you could help me out,'" she said.
She's also seen other indicators that the economy is straining consumers. More are signing up to use the Prairie Food program, she said, a program where $45 worth is food can be purchased for $24, and more families and elderly are showing up Thursday evening for the free dinners at the Methodist Church. The coats given away at the annual Coat Closet have increased each year, Ostrum said, with 800 coats given away this year, an all-time high, compared to 700 in 2007.
The one-time payments of utility fees, to stop disconnection of services such as gas or electricity have increased from her office as well, from 26 payments in September 2007 to 41 this year.
And she's getting more out-of-state calls from adult kids wondering about available services for their elderly parents still living in the area.
But consumers of all ages are feeling the pinch and are scaling back on spending, forcing manufacturers two major manufacturers of McCook to adjust .
Today, officials at Valmont Industries confirmed that 41 employees were laid off at the McCook plant Wednesday and cited the weak agricultural economy. The company produces irrigation systems at the McCook plant.
A total of 52 employees were either laid off or took a voluntary layoff in November at Parker Hannifin, a manufacturer that produces rubber hoses and rubber compound for consumer items like washing machines and industrial components for the building trade. Plant officials said the downsizing was due to lack of consumer spending and are planning tentative call-backs in January if the economy picks up.
But cautious consumers are only part of the problem, according to "Ted M." -- not his real name -- a 49-year old who worked for 13 years at Parker and was part of the cutbacks.
"I'm not angry at Parker, I realize it's because of the economy, but I'm frustrated with the government," Ted said, who now works at his wife's business, causing a part-time employee to be laid off. "They should have got on this sooner, seen the signs."
Government bailouts won't trickled down to the middle class or help small businesses, he contends, but stay in the stock market or in executive's bank accounts.
Ted's biggest concern is insurance. With his diabetes and high blood pressure, the cost of the six kinds of medication he needs to take will jump from $200 per month to about $600 when his insurance from Parker runs out in January.
"My choices are to cut back on food and other things, so I can afford the medicine. Either it's cut back or die," he reasoned. Unemployment benefits are keeping the family afloat for now, but those will eventually run out. Jobs around the area are scarce, he said, especially those that pay above $10 an hour with good insurance.
Although Ted's wife remains optimistic, even she can get a little nervous about the future.
"I believe the economy will turn around, but how long it will take and if we can survive that long I don't know," she admitted. The family has always lived modestly, she said, with no extravagant purchases like expensive vacations. Still, it's only essentials at this point -- no soda pop, no eating out and a trip to a niece's wedding reception is out of the question.
"At our age, we're running out of time -- we didn't expect to be in this situation and have start over," she said. "We're just holding on and hoping we don't have to leave McCook and start over somewhere else."
Despite the recent layoffs, Don Hopkins of the Nebraska WorkForce office in McCook said he's seen no dramatic jump of job seekers in the area. Latest available figures from the Nebraska Labor Department do not include October and November and put the unemployment rate in Red Willow County at 2.6 for September, under the 3.5 rate statewide. Nationwide, the unemployment rate for October stood at 6.5.
But in November, the Nebraska Department of Labor released numbers that had jobless claims jump 42 percent in October compared to a year ago.
With outdoor work winding down, construction workers and seasonal employees are the kind of job seekers he typically sees this time of year, Hopkins said.
Unemployed or not, everyone is feeling the sticker shock in the grocery aisle, where food prices remain about seven percent higher they were a year ago. Although gas prices are now down below $2 a gallon, any solace gained from that can evaporate with the weekly grocery bill.
Volunteers with the McCook Food Pantry, who give out items such as bread, sugar, apples and other food products once a month to those who meet income guidelines, said they typically see an increase during winter months but are seeing more than usual this year.
"We've definitely been feeling it," said Bob Hardy, a volunteer with the Pantry. "It's been increasing steadily since October."
Records at the pantry showed that 194 families were helped in October 2008, compared to 168 in October 2007. And they keep coming in, Hardy said. The third week of November had 11 families helped one day, 16 families the next, with a total of 56 family members.
For 61-year old "Richard R.," desperate times call for desperate measures and for him, that means getting off the roller coaster ride of the stock market. He and his wife had planned to retire early but recently withdrew about 40 percent of their investments and plan to put them into municipal bonds or CDs.
"I don't know what the stock market is going to do," he said. "I could lose it all and I can't let that happen."
A long-time employee of a McCook business, Richard said he "got tired of being a gambler." During the good years, some of the high-risk stocks in his portfolio made as much as $30,000 a month, but his losses now total about $200,000.
"I'm never going to recoup what I lost and I'm back to where I was 20 years ago," he said. "I won't make a whole lot this way but I won't lose like I have been."
Where the economy goes from here is anyone's guess. Consumer confidence may jump-start with holiday shopping and there's talk of some kind of stimulus package from president-elect Obama. But for now, most are taking a wait-and-see attitude.
"It's tough all the way around," Ostrum said. "I don't know what will happen. But people in Southwest Nebraska are used to hanging tight and working together, so we'll get through this some way."
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