Problems with the American Dream or Part 2

Today I'm going to talk about some sensitive issues that affect a lot of young families (as well as others) and are major concerns when it comes to how I see kiddo's future.

Last night I posted my story as an example (or at least an indicator) of some of the structural problems that plague America and thereby affect American families (I know this sounds academic and horrible, but bear with me. It's important). In that post I mentioned the following issues:

1. Large student loan debts (with little practical relief)
2. Oversupply of educated labor in the market
3. Low real wages (even in skilled positions)
4. The high costs of health care (with and without insurance)
5. Structural problems with eligibility of government benefits (and the clear need for benefits with the above mentioned conditions)

So let's unpack these one at a time.

Student Loan Debt

Lately there's been a lot of news about student loan debt, in part because the interest rates on loans were allowed to double. It was, at least when I was in high school, that anyone who wanted to make anything of themselves needed to go to college. So, millions signed promissory notes gleefully, as this was the only way we could pay for schooling. Now, of course, with the high debt amounts (and higher interest rates from that period) combined with poor job prospects, student loan debt is absolutely crushing.

Remember what I said in my last post? Our student loan payments are 30% of our income (well our previous income). That's the rent of a nice studio apartment in Oakland, or a mechanic's special off Craigslist, or maybe even a haute couture stroller (because that's my main concern right now - if I'm as fashionable as moms living in the Presidio). Needless to say, the money coming in isn't enough to cover the required money out.

And are there options for relief? Not really. Not for the average person. And that's a big problem.

Oversupply of Labor

This brings me to the first problem relating to job prospects - too many educated people vying for the same jobs (many of them dinky jobs). I explained in my last post how there were too many people like me in the Bay to allow me to get a good job. Pretty much everywhere else (a.k.a. podunk towns, small cities, and medium sized cities) I'd be able to find something that used my skill set, but in large cities and those with multiple colleges and or universities, the prospects are bleak.

The result is a ton of overqualified employees in stupid jobs which don't pay enough to pay off student debt...or anything really.

Low Real Wages

This gets into the fact that real wages have decreased in recent years, even in skilled jobs. Though productivity has increased, wages stagnate, and when combined with inflation - purchasing power decreases. Instead of companies and high networth individuals letting go of a few million here or there (and really, after a certain point, can you even tell if it's missing?) to allow the economy to stir up and people like me to well, live (and pay off crushing debts).

High Costs of Health Care

This one is a doozy, especially when considering the lack of jobs and our decrease in purchasing power. Health is apparently a luxury (wait...what?!). Because the government doesn't set prices for health care, this allows business interests to drive up prices and default care to the most expensive options.

I'm starting to feel like there is a trend here... business interests...shafting the average person...cycle of poverty... middle class shrinking. Hmm.

Eligibility of Government Benefits

I'm not sure who it was who first started talking about people "gaming the system." Maybe in other countries this is possible. Here you would need to make it your full time job, and frankly, I think organized crime pays better for less work.

The eligibility requirements for government benefits is staggering. In Alameda County, where I live, you have to have documentation for everything you put on your application. You have to report everything you earn - and I mean, everything. You also can't have like any assets whatsoever. A retirement account basically renders you ineligible for benefits.

So let's review. You get minimal support. You have to work really hard to get that minimal support. Oh, and by the way, you have to own nothing.

I'm amazed there are even 47 million Americans getting assistance. Oh wait, those are the extremely poor - not the working poor who are working pretty hard to become extremely poor...

Conclusion

The whole situation reminds me of something I saw yesterday. Christian and I walked down to the estuary and stopped to gaze out at the water. Probably 200 yards down was a tandem kayak with a father and child. They were paddling in the center of the estuary where the current is the fastest. The tide and wind combined would take a little effort for even experienced paddlers to get anywhere, but these two were not experienced. Their strokes were inefficient. The current was too strong. All their efforts to move forward simply held them in place. If they stopped for even a second, they lost progress. As we watched, they slowly drifted nearer.

I wanted to call out and tell them to paddle closer to the edge where the current was weaker... but I wasn't sure. Maybe they didn't care. Maybe they were just having fun...

I am in that kayak.

Like the kayak in the estuary, these economic factors all work together to make the situation worse. There maybe people on shore who see the situation, but they do nothing to change it. They let the boaters flounder, making assumptions that may or may not be true. They comment on what the paddlers could do better, the type of boat, the type of paddle, but the reality is, the whole situation could be solved by a few choice interventions. The situation really isn't that complicated. Solutions could be implemented that benefit everyone (after all, a healthy economy IS good for everyone).

It just takes some people on shore to notice and take action.

Struggling to Find the American Dream

I'm angry. Really angry. And part of me wishes I could move to Norway, or Finland. "Why? What's so great about the land of Norse gods?!" you might ask yourself. Well let's have a little fireside chat about some of the things the American legislative branch has decided are unnecessary, namely government assistance to the poor.

I want to make the situation pretty clear here so there are no questions. In this post I'll give you a lowdown on my own situation, and then we'll get into the facts as they are for millions of Americans in at least a second post (if not more).

My Story

I went to school - college and graduate school - thinking that it didn't matter what I studied because I'd be able to find a job easily considering my skill set. I'm competent. Every job I've ever worked and put the slightest effort into, my bosses have loved me. They've always said I could move up (and several times I did just that).

In 2008 the economy crashed - horribly. Still, I was able to land a job after a couple of months because I happened to live in a city at the time that didn't have a lot of people like me in the labor force (Phoenix AZ). I supported my husband while he was in school, but we still couldn't pay for his schooling outright. We still needed loans to make things livable. Meanwhile, I was making payments to my own student loans.

During our time in Phoenix, it became progressively clearer that I couldn't continue to work for the company where I was employed because it was affecting my health. I was so stressed my body went haywire and I ended up being put on medication which actually made my situation even worse (turned out later the stuff wasn't fully vetted which meant people died and the company ended up being sued...but that's a different story). We ended up having huge medical costs despite my insurance coverage.

In an effort to cut our losses, when Christian graduated we rented our newly purchased home out and left the state. Christian got a job working for a shop at flat rate while I looked for something that would pay - anything. We didn't understand that flat rate meant we would NEED assistance in the winter and wouldn't be eligible. We thought I would be able to get a job quickly because of my skills and experience. It took me 6 months from 2010 to 2011 to get a part time job paying me a fraction of what I made in Phoenix per hour. Keep in mind, at this point Christian's loans came due. Our student loan payments doubled and we were living in a more expensive city.

With the help of Christian's family, we scraped by for months. They helped us financially in ways that are embarrassing, because it felt like we should have known better. I thought we should have figured out that flat rate wouldn't work long term. I felt like we should have known that working on motorcycles not only wouldn't be lucrative, but would render us downright poor. It was only when BMW invited him to the STEP program in New Jersey that we left the shop. I stayed with my parents for 2 months, while Christian was across the country. It was the only way we could afford him to go, and I knew the training would be good for him. I hoped our financial situation would be made better.

After he finished the program, he came back to California and he received several offers. We crunched numbers and determined the most cost effective location would be Bakersfield. While I didn't love the idea of living in Buck Owens' stomping ground, I liked the affordability. I didn't want to be in the same situation we had experienced in Hayward.

Bakersfield turned out to be much better than we expected. Even though it took some time for me to find a job (3 months), I found one that was fulfilling and exciting. There was room for growth. I looked forward to the idea of staying with the school and teaching more and more classes. I loved it. Christian's work on the other hand, made him want to shoot himself in the face every day. He became more and more sullen minute by minute. It was horrible to watch - painful.

Then of course, we had a disaster with our renters in Phoenix. We couldn't afford to fix what they ruined, and so they left. Suddenly we were stuck with rent payments and a house payment. We couldn't find renters for the price we needed. We had to cut our losses. We sold the house for more than we paid, but probably not more than we put into it. Considering the situation, it could have been worse. As it is, we're not eligible for an FHA loan until at least Fall 2014.

Christian's work got worse until he had the option of applying for a job with BMW San Francisco. We crunched numbers. They made an offer. It was enough for us to make ends meet, especially if I could find ANY kind of work (even a dinky after school job). I was horrified I would have to leave my good job in Bakersfield, but the benefits package and the idea of being in the Bay was enough for me to let go. We moved again.

BMW San Francisco was about as good of a position as you could possibly get in the motorcycle world. They paid hourly and when Christian took the job, they had an insurance program that didn't involve premiums. We could even make payments to our loans (which while being 30% of our income, we could just swing it). It was because of this we finally felt safe enough to think about a family. I planned to teach online classes or some other online thing.

Unfortunately, I wasn't able to find any consistent online work. As my pregnancy progressed, it became clearer and clearer I didn't have the energy to devote to a job and often, even my writing (something which I never find rarely if ever draining). I figured I would try again a few months after the baby was born and hopefully there would be some options.

Then last week happened. I was at 31 weeks into my pregnancy and Christian lost his job. With it went our insurance, our modicum of security, and any semblance of normalcy in our lives. I looked into government assistance - WIC, food stamps, and MediCal. Christian applied for unemployment. Then he quickly found a job, rendering us ineligible for any benefits and making it more difficult to navigate insurance (We will have to figure out Cobra - which I have heard is incredibly expensive and we'll have to have. I don't like the idea of going into labor without coverage if something goes wrong.).

This is the sum total of our financial struggles during the first 5 years of our marriage. It has been a trying, stressful, and incredibly painful time for us. We were only eligible for some benefits some of the time. Our loans were never able to be placed on deferment, despite our dire straits, because of the strict rules of eligibility. We were never able to save any money. I had to struggle to find a job every time we moved (and several times the pressure was incredibly great because without 2 incomes, we would have been incapable of supporting ourselves).

I have been unemployed for a total of  19 months since being married in August 2008, through a combination of moving and poor labor markets. During that time, I've been eligible for government assistance a total of 2 months and wasn't able to claim anything. I've used 26 months of forbearance on one of my loans, and 12 on the other (Christian's were also on forbearance for 12 months each). At some points, our loan payments were more than our income yet we were still unable to take advantage of deferment options. Meanwhile interest continued to accrue.

Did I mention our retirement accounts? Those have been earning less than the rate of inflation. And at least one of them has a fee taken out for "maintenance" (a fancy way of the institution saying, "We like to shit all over poor people, so we're going to take out money to pay our 6 figure salaries while you wonder what you'll do come your 65th birthday."). I won't go into the changes in our credit scores that occurred or the bank fees we incurred because we couldn't pay our bills regularly...

But here's the funny thing. According to various sources, our estimated income is still around the median for California (even adjusted for cost of living per state). This is disturbing considering we were struggling even with the small security of hourly pay that Christian received while working at BMW San Francisco.

My story points to several serious social problems:

1. Large student loan debts (with little practical relief)
2. Oversupply of educated labor in the market
3. Low real wages (even in skilled positions)
4. The high costs of health care (with and without insurance)
5. Structural problems with eligibility of government benefits (and the clear need for benefits with the above mentioned conditions)

I'm going to tackle these problems in at least the next post (if not several) because they all point to long term problems for the majority of Americans, not the least of which has been a personal concern - the need to postpone starting a family (or bringing children into poverty). It is my hope that my story and the discussions it brings with it will help people to think a little harder about what the most important issues are today (and who needs to be voted into or out of office).

If you have personal experiences like mine, please comment below! I know I'm not alone in this. There's power in numbers.

The Treacherous Path to Government Assistance

I am doing something I never expected to do in a million years. I'm applying for federal and state benefits, aka government assistance.

Because Christian became unemployed quite suddenly, we find ourselves in a situation that is one of the most painful and frightening we've ever been in. We are unable to care for ourselves and need assistance. I find it ironic that right after these programs received a huge cut (courtesy of our beloved representatives who were more interested in getting kickbacks from big corps and people like the Koch brothers than standing up for the American people) I'm having to take advantage of them.

I guess it's nice to know that systems I have paid into will actually serve me. It's amazing how zero to no income will make you eligible for pretty much everything. Yes. I can take comfort in these things.

At first you see, I had to get over my pride. Maybe it was my pride that made me cry off and on for the past 24 hours, rather than real worry about what will happen to us.

I am, at the heart, a middle class girl. I never wanted for anything, but I didn't live lavishly either. Growing up I never worried about a roof over my head or food on the table. I always expected those things to be true. My parents provided these things for me. We didn't need help. What they did financially before I was born was a different chapter, far removed from my experience.

Going from that land of plenty to this stress-filled concrete wasteland of not enough is harsh and jarring. But the reality is, we have to do what we have to do. My life isn't just about me. I have two other people I'm at least somewhat (if not totally) responsible for. I can't sit and mope in my underpants and neglect my basic needs. My kiddo needs me. This, more than anything, removed any last hesitation or reservations I had.

Whether or not I actually get benefits that work for us is a different story. I might qualify for the minimum of one thing while nothing of something else. I may only get enough to get basic staples. I may have to learn how to cook dry beans (my last attempts were DISASTROUS). I may have to figure out how to live without meat (Ugh! That is horrifying! Especially seeing as I'm borderline anemic...).

Tomorrow Christian will apply for unemployment. We'll probably visit the WIC office (that application has to be in person). The food stamp application can be done online, and we'll drum up all of our bills to enter exact numbers so we can figure out exactly what benefits we deserve according to California. We'll put our loans on economic hardship deferment. If we can get all those things done and have time left over (after all, loan companies are notoriously a pain in the butt over the phone) then we'll research job opportunities and things for Christian. Maybe while he's doing that, I'll actually get some writing things done. I feel like that would be an okay compromise, seeing as I'll have to be involved with the other parts of our schedule tomorrow. I feel like my involvement with those other things would be enough to assuage any guilt I have. Plus I may finally be able to concentrate on something dream related once I've dealt with some of our basic needs.  This weekend it's been impossible.

I don't know. We'll just have to see.

I should say, to the interest of everyone involved and reading about my exploits, I've had several dreams that have come true/deja vu moments in the past week. That is both reassuring and annoying. It's reassuring because it means this was meant to happen. It's annoying because it means this was meant to happen.

I really need to have a sit down chat with the guy upstairs.