"Who would believe that tens of thousands of working families in this, the world's biggest economy, would have to rely on food handouts once meant only for the most unfortunate in society?"
Those who are trying to provide the food handouts to the folks on the street, that's who....
Business & Media: GREENBACK'S SLIDE: DOLLAR CHILLED BY RISE OF EURO: Where jobs are scarce and bellies are empty: In vast swathes of the Midwest, working families are turning in desperation to food handouts and loan sharks, writes James Doran in New York
(Guardian Newspapers Limited, Mar 30, 2008)
There are troubling signs across America that the deepening economic crisis engulfing the country is taking a terrible and historic toll on its people, as growing numbers of once-affluent middle-American families resort to desperate measures to make ends meet.
Who would believe that tens of thousands of working families in this, the world's biggest economy, would have to rely on food handouts once meant only for the most unfortunate in society? Or that times are so tough that in some parts of America high-street banks have shut up shop completely, leaving millions of people with no access to credit or financial services other than the cutthroat offerings of legal loan sharks?
But these are the financial facts of life in large areas of the US, in states such as Ohio and Michigan, where tens of thousands of people worked until relatively recently making cars, refrigerators, air-conditioners and the countless other manufactured goods on which 20th-century American prosperity was built. Now that many of those jobs have been shipped overseas where labour is cheap, a large number of the families that once lived a comfortable middle-American life are wondering, literally, where the next meal is coming from.
Ohio has been particularly hard hit. The state's unemployment rate was 5.3 per cent in February, way above the 4.8 per cent national average. The area known as the Rust Belt, which includes much of north-west Ohio and some of Michigan - the heartland of the US car industry - had average unemployment of 6.4 per cent last year, and the numbers are not improving. Big Ohio cities Toledo and Cleveland, nursing the loss of one big manufacturing plant after another, have joblessness rates of more than 7 and 8 per cent respectively.
Jim Brenizer knows better than most how badly the economic climate is affecting Ohio's working families. He runs a religious outreach programme in Lucas County near Toledo, which helps those below the poverty line to get food stamps and other benefits. His newly created job title at the Toledo Area Ministries says it all: 'I am the director of meeting human need,' he says, adding that once-proud working families in Toledo have been seeking his services in greater and greater numbers.
'We originally did a lot of our work with seniors who have little or no income, but more recently we are helping a lot more people that you would call the working poor,' Brenizer says.
Lucas County is on the shores of Lake Erie in the very heart of the Rust Belt. Fierce Arctic winds blow across the great lakes from Canada and make for hard living most of the year. Only the prospect of full employment, a home, good schools and everything else the American Dream promises made life tolerable in this harsh country. But now the fires of industry are cold and this vast region of the Midwest faces a long and bleak economic winter.
Brenizer says: 'Families who were until recently doing well, and maybe would be giving food to our pantries for the homeless scheme, are now faced with the necessity of using the pantries to put meals on the table.'
The federal food stamp programme was introduced by President Jimmy Carter in 1977 and is run by the US Department of Agriculture. It is essentially the backbone of the scant federal benefits that make up what passes for welfare in the US. When they were introduced, food stamps were issued in a little book and exchanged at grocery stores for essentials such as milk, eggs, meat and bread. In most supermarkets, food stamp users had to line up at a separate checkout - the poor were segregated from other shoppers. Today, most states issue debit cards pre-loaded with food stamp credits, but the stigma of using them is still great.
Brenizer says that only about one in four people eligible to receive food stamps ever applies for them. 'Especially for those who have worked all their lives,' he says, it takes real guts to accept a handout.
Even so, the latest figures show that one in 10 Ohioans are now receiving food stamps, a staggering number that exposes how deep these pockets of brutal poverty have become. 'Never before have so many people in this state received food stamps,' Brenizer says.
And that is not the only unfortunate record Ohio has chalked up in the economic downturn. Record numbers of so called 'pay-day loan' shops are springing up all over the state, a trend mirrored all over the country as workers struggle to meet mounting bills like overdue mortgage and utility payments.
The typical 'payday loan' is around $300 with a term of two weeks, but the average US borrower ends up paying back $793 for a $325 loan, according to the Center for Responsible Lending, a not-for-profit organisation based in North Carolina. It estimates that some $30bn of payday loans are written every year across the US.
In some parts of Cleveland, the city in Ohio hardest hit by the sub-prime mortgage crisis, all the conventional banks have been replaced by payday lenders. Data compiled by the CRL shows that there are now some 1,650 in Ohio, more than all of the McDonald's, Burger King and Wendy's fast food restaurants put together.
Payday loans are so insidious that they have been banned in a handful of states - in New York, annualised rates of interest offered by any lender must not exceed 25 per cent. But even in New York the number of so-called 'check-cashing shops' is on the rise.
Every march the US Census Bureau conducts its Current Population Survey Annual Social and Economic Supplement - a rather wordy title for what is essentially a report on American poverty. The data is collected from every corner of the US and takes five months to crunch.
Last August the bureau found that there were 36.5 million Americans living in poverty in 2006. Most experts believe the official figure will also be little changed for 2007, as the first half of the year was fairly prosperous, but the outlook for 2008 is bleak indeed.
'The poverty rate is undoubtedly going to get worse this year,' says Ron Haskins, a poverty expert at the Brookings Institution, a Washington think-tank. 'I think we should be very concerned.'
Back in Lucas County, Jim Brenizer and his wife Marj will more than likely be helping out at another 'feed your neighbour' night at their local church this weekend, and they will probably see some more new faces. 'We will see some first-time families, for sure,' Jim says, 'and hopefully we will be able to help them out in these rough times. A lot of people in this part of the country need help.'
