ONTD Political

Notes on the US social crisis

By Naomi Spencer
20 July 2011

The economic crisis manifests itself in virtually every facet of working class living conditions in the US. New state budgets include devastating cuts to basic social programs, even as the job and housing markets continue to worsen and need grows.

17,000 apply for 1,800 jobs in Louisville, Kentucky

In the span of a few days, 16,837 people lined up at the Kentucky Office of Employment & Training last week to apply for 1,800 openings at Ford’s Louisville Assembly Plant. The company will select applications to review through a lottery process.

The positions, many nightshift line jobs assembling the Escape SUV beginning in the fall, will pay only $15.51 per hour—half that previously earned by autoworkers in the US. Benefits will not begin for new hires until after eight months on the job.

Steven Stone, the United Auto Workers chairman at the Louisville plant, defended the wages. He commented to the Louisville Courier-Journal, “Those are good jobs even though they are ‘two tier.’ ” The Louisville plant is among the first in the country to implement the two-tier system.

The line-up is similar to a 2009 run on job openings at General Electric’s Louisville plant, when 10,000 applicants vied for 90 positions. Kentucky is attractive to corporations concentrated in the Midwest because of its “business friendly” tax structure and low wages. Louisville has higher than 10 percent unemployment and widespread poverty.

“Nobody’s working. You stand in the unemployment line, and you’re there for hours. It’s unbelievable,” one resident told local channel WDRB Fox 41. After being unemployed for a year, he explained, “I’m behind on everything. The bank’s after me. I’m just barely making it.”

State Medicaid programs confront end of federal “stimulus” funds

The fiscal year beginning July 1 marked the end of 2009 federal “stimulus” funds. For Medicaid programs, which are jointly funded by the federal government and the states, this signals the drying up of billions of dollars in aid for ailing budgets, even as the health care program for the poor buckles under record enrollment.

According to a report by Federal Funds Information for States, Hawaii’s federal funding has plunged 16 percent. Louisiana, Washington, Alaska, Nevada and many other states saw declines of more than 10 percent. The fall in funding will translate into major cutbacks in eligibility and access to care for millions of people.

California terminates Adult Day Health Care program

Some 37,000 low-income, disabled, and elderly adults are being “transitioned” off the Adult Day Health Care program with no alternative safety net in place.

Ten centers serving the program have been closed, including one in San Francisco’s Richmond District. Advocates told the San Francisco Chronicle that shuttering the centers would push recipients into nursing homes, emergency rooms or mental institutions within the span of a few months. In San Francisco, nursing homes have long waiting lists due to bed shortages.

Directors at 290 other facilities received letters last week from Department of Health Care Services director Toby Douglas announcing they would be allowed to remain open after September 1, when funding is to be cut off. Care providers have filed a lawsuit in state court against the budget cut, arguing it puts too many patients at risk of institutionalization, in violation of the Americans with Disabilities Act.

Illinois ends indigent burial program

An Illinois program that funded funeral services for the destitute has been eliminated. The state had paid for more than 10,000 burials each year, although funeral homes were poorly reimbursed.

“You start getting an influx of these types of calls that are public aid as most people remember it,” Gallatin County Coroner Tony Cox told local news channel WSIL 3. “You’re not getting any money, or you’re having to wait for a long time. As you can see, it’s pretty obvious it can really affect that business.”

Many states have seen a large increase in the number of indigent burials over the past several years. In some city morgues, the bodies of poor residents lie unretrieved or unclaimed for years on end.

Harrisburg funeral director Mike Weirauch explained that while funerals cost him $4,000 to prepare, the state compensated only $1,655. “It’s not that you don’t care, it’s just that if you have very many of these…after a while you couldn’t stay in business because all your money is going out and none is coming back in.” Funeral home directors have reported a rise over the last few years in cremations, which are less expensive than burials, as families struggle with finances.

Sales fall at dollar stores as poor customers forgo “extras”

Citing high fuel prices and worsening financial distress among the working poor, dollar stores reported lower-than-expected quarterly earnings last week. For largely the same reasons, Dollar General, Dollar Tree, and Family Dollar previously saw gains in revenue with the onset of the economic crisis.

Family Dollar spokesman Josh Braverman told the Wall Street Journal that the store’s customer base of families earning less than $40,000 has expanded to include households making up to $70,000. At the same time, the Journal noted, “their price-sensitive customers, pummeled by high unemployment, stagnant wages and soaring gasoline prices, are buying more food and other basics like cleaning products, which have relatively low profit margins, and fewer higher-margin discretionary products, such as apparel and home decorative items.”

Toys, clothing, and other items from the winter remain unsold on shelves, and summer items have failed to sell well even with deep discounts.

Profits soar for pawn shops, predatory lending companies

Pawn shop operator Ezcorp Inc. reports an average 46 percent annual increase for five years running, and a doubling in its stock value over a year ago. The company’s soaring profits are a direct measure of desperation in the working class, as millions of people sell their jewelry, musical instruments, and other personal possessions to make ends meet.

“Payday loan” outfit Advance America Cash Advance has also seen its stock price double; Cash America International stock rose 64 percent. Such companies prey on people with poor credit ratings, offering quick loans with usurious fees and interest.

Profits at debt collection agency Encore Capital Group have risen 50 percent in the past year. Encore primarily targets those who have fallen behind in credit card repayments.

North Carolina cuts legal aid, drug treatment funding

Legal aid programs to the poor are being slashed across the country. In North Carolina, regional district attorney offices have seen funding for witness protection, victim assistance, and domestic violence programs cut. The state cut $38 million from its court system, eliminating more than 300 staff positions.

North Carolina Conference of District Attorneys director Peg Dorer told the Winston-Salem Journal July 16 that the cuts will especially impact smaller counties, which have been historically understaffed.

The state also cut funding for drug treatment courts. These courts were designed to manage nonviolent, drug-addicted offenders as an alternative to the draconian sentencing laws that have condemned millions of people across the country to prison.
fenris_lorsrai 20th-Jul-2011 06:38 pm (UTC)
Ending the adult daycare one is definitely in category of pennywise, pound foolish. all the other alternatives cost way more and they'll shortly be overwhelmed.
romp 21st-Jul-2011 04:23 am (UTC)
Cutting those most in need is just STUPID. They don't disappear--care is still needed so it will be more triage and damage to caregivers.
staringiscaring 20th-Jul-2011 07:26 pm (UTC)
So, Illinois is just going to let the bodies pile up then? Are we going to have mass pauper's graves now?

Everyday I feel more and more like we are going back to the Gilded Age. I wonder when they finally take away the child labor laws. "Go on Jimmy, get into that coal cart. Time to go into the mine."

Edited at 2011-07-20 07:27 pm (UTC)
cparamo 20th-Jul-2011 07:36 pm (UTC)
Makes me think of something Barbara Ehrenreich wrote a few years ago, "As long as the middle class is still trudging along and the poor are not starving flamboyantly in the streets, what does it matter if the super-rich are absorbing an ever larger share of the national income?"
staringiscaring 20th-Jul-2011 07:40 pm (UTC)
Sadly enough that is true for people. :(
xochitl 20th-Jul-2011 07:38 pm (UTC)
"only" 15.10 an hour..? that's more than I make right now, and I went to college.
xochitl 20th-Jul-2011 07:38 pm (UTC)
whoops, *15.51
hermionefan87 20th-Jul-2011 07:56 pm (UTC)
I live in Kentucky, have a college degree, and that's almost twice what I make.
angry_chick 20th-Jul-2011 08:18 pm (UTC)
Seriously. $15.10 would be fucking DIVINE to me.
cparamo 20th-Jul-2011 08:19 pm (UTC)
"Only" because it's a huge step backward, considering auto workers were paid much more during the 50's-70's, etc.
angry_chick 20th-Jul-2011 08:22 pm (UTC)
This is also very true. My grandfather made it up the ladder for GM. He's a very rich man that lives quite cheaply.
redstar826 21st-Jul-2011 01:16 am (UTC)
exactly. I grew up in a very nice middle class neighborhood in a suburb of Detroit. Many of my neighbors were retirees who had worked for either GM or Ford on the assembly lines. Those jobs used to provide a very nice life.
roseofjuly 21st-Jul-2011 03:45 am (UTC)
It's still not very much, especially to support a family on. That's about $2100/month before taxes, or by my estimate, about $1700/month after taxes.
synth___romance 20th-Jul-2011 07:58 pm (UTC)
those pay day loan places disgust me. Preying upon those who don't understand how that quickly that fucks you is especially in this economy is terrible. I wonder if the people working there understand that they're just fucking over people to make tons of money for the people at the top.
anese 20th-Jul-2011 08:35 pm (UTC)
I interned at a market research firm that was helping to defend those creeps.

It made me sick.
erunamiryene 20th-Jul-2011 09:09 pm (UTC)
Unfortunately, there are also people who really don't have a choice. I could just not pay bills, or get a payday loan to pay for it when I didn't have any money left that payday. The problem is getting out of the cycle. :/
synth___romance 20th-Jul-2011 09:14 pm (UTC)
there are local credit unions that offer small loans as an alternatives to the pay day loans so that people don't get caught in those scams. In most cities where the pay day loan places are, there are other options, people just aren't aware/don't look for them.
erunamiryene 20th-Jul-2011 09:15 pm (UTC)
Not when your credit score is 510 or less. Every single up front place I went to gave me "so sorry, but no." Trust me, I looked elsewhere first.

*I should add, this is just my experience. My experience, obviously, is not everyone's.

Edited at 2011-07-20 09:16 pm (UTC)
synth___romance 20th-Jul-2011 09:21 pm (UTC)
one of the credit unions i went to specifically gives out loans like these to people with not so good credit to keep them from going to the pay day loan stores. They have one customer who took out one of these kinds of loans to pay off the pay day loan store then deal only with the credit union.
I visited and read about small credit unions in Chicago and if i'm remembering correctly there are some federal laws (this was two years ago before or right around that credit law obama passed came out) about who banks are required to loan to and have business with and where.
serendipity_15 21st-Jul-2011 01:51 am (UTC)
Those payday loan places and those tax prep places like H&R Block disgust me too. When I was down in Louisiana Baton Rouge was littered with those payday loan places. Their absolutely predatory behavior disgusts me.
roseofjuly 21st-Jul-2011 03:51 am (UTC)
I am so fucking pissed at H&R Block. I went in for a tax filers program that was $29 for prep fees for people making less than $31,000 a year. My graduate fellowship is $30,000, so I thought I was just scraping by. But they counted a TA-ship payment I made - even though it's listed as financial aid and not income - and that brought me over to $33,000, so they wouldn't take the coupon from me. Best part is, they didn't tell me this until they'd already entered all my taxes in. I didn't realize I could just get up and walk away.

But it gets better - I was like no big deal, the 1040EZ is only $80. More than I wanted to spend, but I could afford it. NO. Because of some bullshit they explained - they said that my fellowship made the filing "complex" and I had to file a 1040 form + some additional fees because of the "complexity." I watched the processor file it and the only extra thing she had to do was go into the scholarship screen and enter the amounts straight from the school forms I supplied her. But they charged me $240 for that. I know they were bullshitting me because I filed the taxes from home the last two years, and I had a fellowship those years too and I used the 1040EZ with no issues. I will never use them again.

But I think you are talking about these tax refund anticipation loans, which I think should be illegal. Although they are usually pretty right with their estimates...I'm pretty sure they charge rather high interest rates for them.
serendipity_15 24th-Jul-2011 01:43 am (UTC)
I was talking about the refund anticipation loans and I agree with you, I think they should be illegal also. The interest rates they charge are high and so are the fees they charge, especially if the person does not have a traditional bank account at a bank or credit union where the refund can be deposited.
roseofjuly 21st-Jul-2011 03:46 am (UTC)
Of course they know that. But they're doing what they have to do, too. It's not the cashier's fault, usually; it's their greedy-ass bosses and the regulatory system that allows them to fuck people over like that.
romp 21st-Jul-2011 04:25 am (UTC)
I've been waiting 20 years for a crack-down on the poverty industry. Guess it's up to the free market now.
erunamiryene 20th-Jul-2011 09:08 pm (UTC)
The positions, many nightshift line jobs assembling the Escape SUV beginning in the fall, will pay only $15.51 per hour—half that previously earned by autoworkers in the US. Benefits will not begin for new hires until after eight months on the job.

Henry "If I pay my workers enough, they'll buy my products" Ford would be goddamn ashamed.

Kentucky is attractive to corporations concentrated in the Midwest because of its “business friendly” tax structure and low wages. Louisville has higher than 10 percent unemployment and widespread poverty.


Jesus christ, America is fucking falling apart. Why doesn't the whole country look like Madison does, with people in the streets demanding justice? Oh, right, because we've been conditioned over decades that "it's not those benevolent corporations that are ruining your life, it's OMG THOSE BROWN PEOPLE OVER THERE/OMG THOSE GAY PEOPLE THAT WANT TO GET MARRIED/OMG THOSE WELFARE QUEENS/OMG SOSHULIZM/OMG ABORTION", so we do nothing, while our "leaders" and the corporations bleed the country dry.
masakochan 20th-Jul-2011 10:07 pm (UTC)

masakochan 20th-Jul-2011 10:08 pm (UTC)
Blagh typo- 'Reagen was a* saint'
browneyedguuurl 21st-Jul-2011 08:38 am (UTC)
Fuck Reagan!
ladygoddess 21st-Jul-2011 02:49 am (UTC)
The only light I can share is that at least six of my library school classmates have landed jobs in the past two weeks.
romp 21st-Jul-2011 04:28 am (UTC)

At the risk of being a downer, have you seen this? Toronto libraries being looked at for privatization. RAGE at any privatization of a common good!
ladygoddess 21st-Jul-2011 11:36 am (UTC)
I think in 100% of the six cases I mentioned, they are all going to academic libraries so there is a bit of a buffer.

Privatization makes my blood boil.
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