March 12, 2010

Bottom falls out for middle classRecession shreds expectations of a stable standard of living

ANN S

— By . KIM

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Photo by John Ewing/Staff Photographer... Tuesday, March 10, 2009...Georganna Prudhomme, of Yarmouth, is a licenced clinical social worker who lost her job in January and no longer feels she can maintain a middle class lifestyle.

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20090312_MiddleClass

Gordon Chibroski

Staff Writer

Matthew Charlebois is spending a lot of time these days worrying about things he once took for granted.

He's scared he'll lose his home. He wonders whether he'll be able to afford new clothes for his job search. He wishes he could do more for his daughter's upcoming wedding. He's selling his tools for cash, even though he'll need them if he finds work.

As a cabinetmaker, the 52-year-old Raymond resident never made loads of money, but he never spent a lot either.

''I wasn't worried about everything,'' said Charlebois, who lost his job in December as manager of a shop that specialized in high-end work. ''Now, I don't know if I'm going to have to squat and live in a tent city in Deering Oaks or not.''

The recession has Mainers like Charlebois worried about something very basic: falling out of the middle class. Job insecurity, investment losses, declining home values and threats to their health care coverage have these people concerned about some once-fundamental assumptions they held about their quality of life.

''This has been a real shock to the middle-class psyche,'' said Dennis Jacobe, chief economist for Gallup, a polling organization. ''Most of us think it will take quite a long time before people will feel as financially secure.''

The term ''middle class'' is a broad one without a single, universally accepted definition. Many Americans -- as many as 90 percent, according to some public opinion polls -- think they fall within that category. They include 40 percent of adults who make less than $20,000 a year and one-third of those making more than $150,000, according to a survey conducted by the Pew Research Center last year.

''Those who do consider themselves middle class really span a wide range of incomes, lifestyles, cultures because part of the American self-image -- or American mythology, we might call it -- is everybody is middle class. We're all part of this big, broad middle,'' said Seth Ovadia, a sociologist at Bowdoin College in Brunswick.

At the start of the recession, the American middle class was already feeling some anxiety. In a Pew survey conducted from Jan. 24 through Feb. 19 last year, 79 percent of respondents said it was more difficult to maintain a middle-class standard of living than it was five years earlier. In 1986, 65 percent of respondents felt that way.

Twenty-five percent said they felt they hadn't moved forward in their lives in the past five years, and 31 percent felt they had moved backward.

''It was already clear things had already started to go south,'' said Paul Taylor, director of Pew's Social and Demographic Trends project.

The survey of 2,413 adults has a margin of error of plus or minus 2.5 percentage points.

Many middle-income people lacked the assets to deal with a financial crisis even before the recession hit, according to a study by Demos, a liberal New York-based think tank. In 2006, 76 percent of what the organization described as middle-class families do not have the financial cushion to meet three-quarters of their basic expenses for three months. The study defined families as middle class if their household earnings fell between 200 percent and 600 percent of the poverty level, or between $40,000 and $120,000 for a family of four that year.

Now, some Mainers who never imagined themselves facing foreclosure, choosing between groceries and medication or depending on public assistance are confronted with the looming fear of poverty.

For Georgana Prudhomme of Yarmouth, a middle-class life meant taking some simple things for granted. It meant being able to go out to dinner with friends, rent a movie, buy a birthday gift for someone or shop for groceries without scrutinizing the type of cheese that went into her basket.

Prudhomme, a licensed clinical social worker, was laid off from her job as a floor supervisor at a nonprofit agency in January. Prudhomme, 47, has never before encountered as much difficulty in finding new work.

''It's shocking,'' she said of her layoff. ''You go through the stages of grief. It's a loss.''

But Prudhomme said she doesn't have time to be angry or sad as she looks for work. And although she had been working on a retirement plan before her layoff, she can't focus on getting that back on track now, given her more immediate concerns.

''I don't know how that would even be an option unless I suddenly start making a lot of money,'' she said.

Even without a job loss, the recession has taken a toll on Americans' retirement plans. The average 401(k) account lost 18 percent of its value in 2008, according to Hewitt Associates, a human resources firm.

For many, though, there are more immediate concerns.

A cutback in Michael Grace's hours meant losing his health insurance. Grace, a registered nurse who lives in Pownal, had hoped to retire from his job as a wellness professional for a supermarket distribution center. But now, Grace, 57, is scrambling to find a full-time job with insurance -- a must because he is a Type II diabetic.

His wife, Brenda, works for a company that provides in-home care to elderly clients, and has had her hours cut back as well. She isn't able to get insurance through her job.

Grace is eligible for unemployment benefits, but feels uncomfortable about signing up for them, saying, ''It just feels wrong.''

The couple have started to tap into savings to pay their bills, and Grace worries that if he doesn't land a job soon, their savings could be exhausted. In the past, they have taken for granted that they will have enough income to pay oil bills and buy groceries, but Grace is finding that even those assumptions are now in question.

Dana Petersen, the father of two college-age daughters and a son in high school, has been looking for work in his field, facilities engineering, since losing his job last month. But Petersen, 51, isn't above taking an hourly wage job if that's what's needed to keep his household running. That goal may be even more challenging because his wife, Debbie, will lose her position as a purchasing manager when RR Donnelley in Wells shuts down.

''I think we'll be able to hold on. It will be rough,'' Petersen said.

Charlebois, the cabinetmaker, doesn't foresee his industry rebounding anytime soon. He's finding for the first time that there is no work for him at the other local woodworking shops.

''I don't have an education. I'm just a guy, like working with my hands. Working with my hands was who I was. As of a couple of months ago, my identity's gone. I don't know who I am anymore,'' he said.

Charlebois is researching other careers and is considering trucking. He is trying to sell his one toy -- a motorcycle -- to help pay the tuition for the certification program.

Despite the challenges, Charlebois is remaining optimistic. In addition to being resourceful, he feels lucky that he and his wife, Kate, are healthy and have health insurance.

Kate held on to her accounting job despite recent layoffs at her workplace.

''You can look over your shoulder and see 10 people worse off than me,'' he said.

Staff Writer Ann S. Kim can be contacted at 791-6383 or at:

akim@pressherald.com

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