“73 Year Old Apologizes to his Wife in Manchester, Ct”
Sometimes the work I do for a living just sucks!
On Saturday I met with this couple for a refinance, both on social security and he is still working part time. They want to refinance their home in Manchester CT to get a lower monthly payment. The owe $174,000 and their interest rate is 7.5%, they have 24 years left on their mortgage.
The problem, the value of their home is about $150,000. Since their mortgage is not owned by Fannie Mae or Freddie Mac, we can’t refinance through HARP 2.So they are stuck, as they don’t have enough savings to pay down the mortgage.
They shared with me, that they have spoken to their mortgage servicer about refinancing or modifying their mortgage, they were told no, they couldn’t because they were current on their mortgage, that they would have to be late for three months, which they aren’t willing to do. They value their credit and are not willing to be deceitful.
After an hour of conversation the husband turns to his wife and says, “I’m sorry honey, I have to keep working until the value of our home goes up”. I couldn’t help myself, I had tears in my eyes. The wife said to him, “We are having a good life and we will see this through, like we have everything else”.
For Middle-Aged Job Seekers, a Long Road Back
By: Ben Casselman, The Wall Street Journal
Much of the attention during the prolonged U.S. employment crisis has been on high rates of joblessness among young people. Less noticed, but no less significant to many economists, has been the plight of the middle-aged. More than 3.5 million Americans between the ages of 45 and 64 were unemployed as of May, 39% of them for a year or more—a rate of long-term unemployment that is unprecedented in modern U.S. history, and far higher than among younger workers. Millions more have quit looking for work or, like Mr. Daniel, have taken part-time jobs to get by.
"I try not to think that this is the end and I'm just going to have to shut everything down," Mr. Daniel says. "My mind doesn't work that way. I think that if I can get up I'll find something. I've got to keep moving."
The two decades between 40 and 60 are meant to be workers' prime years for earning and building wealth, the period when they buy homes, send children to college and save for retirement. Unemployment, especially for an extended period, can short-circuit that process. The effect can span generations, because middle-age workers are more likely to be supporting retired parents, sending their children to college or supporting adult children.
Part of what set the most recent recession apart from the milder downturns of the 1990s and early 2000s, argues Steven Davis, an economist at the University of Chicago, is that this recession didn't primarily strike young workers, or those with erratic work histories. It also hit productive, steady workers in the prime of their careers—people who are ordinarily the backbone of the economy.
In the 1990s, the unemployment rate among 45- to 64-year-olds peaked at 5.7%. In the brutal downturn of the 1980s, that jobless rate barely topped 7%. This time, it topped out at 8.2%.
As of May, the unemployment rate for people ages 45 to 64 was 6%, some 10 points lower than for people under 25. But the lower rate disguises the fact that when middle-aged people lose their jobs, it's much harder for them to find a new one. Those between 45 and 64 take almost a year on average to find a job, more than two months longer than workers between 25 and 44.
"Even when you do return to work, it's a much worse job than before you were laid off," says Sewin Chan, a New York University economist who has studied the impacts of late-in-life job loss. "No one's going to reward you for skills that only apply to your old job."
Some experts have suggested the government has made the problem of long-term unemployment worse by extending jobless benefits—just under half a worker's previous salary, on average—to up to 99 weeks in some cases. They worry that could discourage some job-seekers from looking for work or from accepting low-end jobs.
David Grubb, an economist at the Organization for Economic Cooperation and Development, has estimated that at least half the increase in unemployment during the recession could be tied to extended benefits. Other studies have found far smaller effects from extended unemployment benefits. In recent months, extended benefits have expired in many states while long-term unemployment has remained high.
Some middle-age job seekers worry they will end up being effectively retired, without the resources for the retirement they had expected. Appleton, Wis., resident Tonja Adams was 62 when she lost her job as a sales associate at a local publisher of safety literature in 2009. A former freelance art director for advertising agencies, she expected to find work quickly.
"I'd never been out of work for any length of time in my life," Ms. Adams says. "I just networked like crazy and I just assumed that I would get a job within two or three months."
More than three years later, she is still looking. Her savings gone, she was forced to take Social Security early, though that meant accepting a lower payout. The monthly checks for $1,280 don't cover her expenses. She receives food stamps and, to her embarrassment, help from her elderly parents.
She is still looking for work, she says. "I never would have dreamed that I could not find a job, that I was unemployable."
Even workers who took advantage of unemployment benefits to improve their skills haven't necessarily found work. When Earl Schoolfield lost his job in 2009 after two decades in telecommunications sales and customer support, he quickly found he needed to go back to school if he wanted to get a job. The 59-year-old Bridgeport, Conn., resident spent a year getting his certification as a computer technician. His unemployment benefits expired last year after close to two years.
The new credential hasn't helped. Last fall, Mr. Schoolfield's 22-year-old niece helped him land a part-time job on the night shift at a local heating-oil supplier, paying $180 a week. He also found seasonal work as a package handler for FedEx during the holidays.
Other than that, Mr. Schoolfield has had little luck finding work. He has borrowed against his life insurance, dipped into his church's benevolent fund and gone on food stamps. Taking in a boarder hasn't been enough to keep Mr. Schoolfield from the brink of eviction, he says.
The struggles of the middle-aged unemployed point to a larger economic problem: The labor market can't fully heal until people like Ms. Adams and Messrs. Daniel and Schoolfield can get back to work. The longer it takes, the deeper and more permanent the scars of the recession become—not just for the workers themselves, but for the broader economy.
On a recent Wednesday morning, Mr. Daniel sat at the converted poker table that serves as a desk in his sparsely furnished home on Chicago's outskirts. He pored over job listings on Craigslist, noting prospects in neat pencil in a spiral-bound notebook next to his laptop. So far on this day, the notebook had one entry: a job driving patients for a local medical clinic. He dialed the number.
"I'm calling about the nonemergency driver position," says Mr. Daniel, his phone to his ear.
The person he needs to talk to isn't there. He is told to call back after 3 p.m.
Such moments—calls that go unreturned, interviews that lead nowhere, online applications that disappear into the ether—are among the most difficult in a job search, says Jennifer Drew, a case manager at National Able Network, a Chicago-based nonprofit that works with unemployed adults, mostly in their 40s and 50s.
Ms. Drew has worked with Mr. Daniel and says he has done an unusually good job keeping his spirits up. But long-term unemployment can be demoralizing for anyone. "Job searching by yourself in your home can be very isolating and very discouraging," Ms. Drew says.
A divorced father of two—his younger daughter, a sophomore in college, lives with him—Mr. Daniel could pass for a man 10 years his junior. Athletically built with a close-cropped beard untouched by gray, he is still fast enough to serve as a frequent pinch-runner in the softball league where he has played three times a week since 1983.
Growing up on Chicago's South Side in the 1960s and 1970s, Mr. Daniel joined the Army out of high school, then held a variety of low-skilled jobs, working for a moving company, a flooring manufacturer and a maker of injection-molded plastic parts.
In 2000, Mr. Daniel landed a job at Elkay Manufacturing, an Illinois-based maker of stainless steel sinks. He worked his way up, learning to drive a forklift, run the steel press, polish the sink bowls and repair defects. A union member, Mr. Daniel had health insurance and a 401(k) plan. His pay eventually topped $18 an hour, almost $40,000 a year before overtime, which could add thousands more.
It was enough, Mr. Daniel said, to afford "some of the finer things in life," such as dinners out, new power tools and the ability to let his daughter raid his wallet for a $20 bill when she headed to the mall.
But when the housing market collapsed, so did demand for sinks. In 2008, Elkay began laying off more than 250 workers in Illinois. The ax fell on Mr. Daniel in early 2009.
With no college degree or special skills, he found himself with few options. The unemployment rate for workers with a high school education but no bachelor's degree was 8% in May, more than double the rate for those with a college education.
Middle-aged people struggle to find work for a variety of reasons: They are more reluctant to change industries than their younger counterparts and tend to have greater financial commitments that make it harder to start over with an entry level job. Because they made career choices decades earlier, they are more likely to work in industries in decline.
They are also less able to move to find work, more likely to be tied down by a mortgage or a spouse's job. Experts say employers often give preference to younger workers, who they perceive to be more flexible, technologically savvy and able to "grow with the company."
"They tend to go for a younger worker, a more recently educated worker, a more recently trained worker," says James Manyika, a director at the McKinsey Global Institute who has researched employment trends. "If you're 50 and you've been out of employment for a while, it's going to be way harder to get back in."
Mr. Daniel qualified for a government program, the Trade Adjustment Assistance program, which pays for retraining laid-off workers in manufacturing and other industries affected by globalization. He hadn't taken a math class in more than 30 years, but the retraining program required him to go back to school first. So more than three decades after he graduated high school, Mr. Daniel found himself in a classroom full of people his daughter's age, studying trigonometry, algebra, English and computer skills. "Back when I was going to school, I could look at it and pick it up," Mr. Daniel says. "Now, I have to pay a bit more attention."
Time and money were a bigger challenge. Government programs subsidized his classes but didn't help with his bills. By mid-2010, Mr. Daniel's unemployment benefits were running out after more than a year and a half of unemployment, and he dropped out of training after a year to focus on finding work.
Mr. Daniel is scraping by. He teaches baseball umpiring for a city-run program a few days a week and teaches fitness to high-school students for a few hours more. Together, the jobs pay around $300 a week, a fraction of what he earned at Elkay.
To make ends meet, Mr. Daniel does odd jobs: lawn care, snow removal, tree cutting. He has drained his savings and 401(k), and borrowed money from his mother and sister to pay bills. Friends picked up the fees to his bowling league this spring, and he worries his beloved softball could be next to go as money gets tighter. He is hopeful a $16-an-hour part-time job as a bus driver for a local college will come through in August.
Mr. Daniel's's garage has become increasingly cluttered with miscellaneous items he has picked up since losing his job.
While waiting to call back the medical clinic, Mr. Daniel opened his email, where he had been corresponding with a man looking to have a branch removed from a tree on his property. The day before, Mr. Daniel had offered to do the work for $100. He hoped to do the job in the afternoon before his softball game, but the man hadn't written back.
Mr. Daniel opened a new email and drafted a follow-up response, punching the laptop's keys with his index fingers as if operating a manual typewriter. "I sent you an estimate of what I would charge you," he begins, "but got no response."
Mr. Daniel's daughter, Auriel, a sophomore in a local college, walked into the room looking for a ride to her summer job at the cleaners down the street. She has financial aid to pay for most of school, but Mr. Daniel helps with expenses, even though she is working more hours than he is. "She's mentally strong," he says.
After dropping off Auriel, Mr. Daniel called back the medical clinic about the transportation job. The voice on the other end asked him to wait a moment, and the sound of shuffling papers came through the receiver. The man returned to the phone: "It's filled already."
image: Dr Joseph Valks/freedigitalphotos.net
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