Hovering Above Poverty, Grasping for Middle Class

Globalization has thrust many firms and their employees into a new, more intense competition to perform more efficiently. Many computer-based jobs can now be done anywhere in the world. Similarly, lower trade barriers have allowed markets for manufactured goods, raw materials and capital to span the globe. And even when factories stay in the United States, technology has made it possible for them to produce more with fewer workers. Meanwhile, unionization has declined to single-digit percentages among private-sector workers, further eroding the leverage of employees. All of this has been a drag on salaries.

On Their Own

As the nation endures its first sustained downturn since welfare reform a dozen years ago, low-income workers find themselves increasingly on their own. Many low-wage workers are straining to pay for life's necessities and say they feel little impact from government programs designed to help.

With inflation up 5 percent in the past year, the vast majority of those surveyed are having trouble paying for gas, saving for retirement or for their children's educations. Most find it difficult to afford health care and housing, and nearly half struggle to pay for food.

For many, their jobs contribute to the stress. Three in 10 work for companies that do not offer them health insurance or paid vacations. About 4 in 10 get no sick days or retirement benefits.

To cut expenses, most said they are trying to minimize their use of electricity and heat, and more than half said they have postponed needed medical or dental care.

"Our company doesn't provide medical insurance. I have to provide my own, and I cannot find any that I can afford," said Angela Dobson, 36, a restaurant worker in Anderson County, S.C. "As far as having a full-blown checkup, I have not had one in probably 10 to 15 years."

Many others said they have dipped into their savings or cashed out retirement funds in the past year to make ends meet, while 41 percent said they have borrowed money from friends or relatives to get by.

"Prices have gone up, and it's not just gas," said Elaine Judy, 38, who prepares meals for students in a reading program in Burlington, W.Va. "It is hurting the hard-working person."

Neither Judy, nor her husband, Rick, who works for a firm that sells truck parts, have received significant pay increases in recent years. And with two of their three children still living at home, they have had little choice but to tighten their belts. "We've had to cut back on things like going out to eat and shopping to make sure we have the necessities," she said. "We feel okay, but you have to worry more than you used to."

The anxiety is growing. Half of respondents said that financially they feel "less secure" than they did a few years ago. Meanwhile, the vast majority said it is harder for people like them to get ahead financially.

About half said they would only be able to survive a month before landing in financial trouble if they suddenly lost their jobs, while a third said they would last two weeks or less. A third of those polled said that someone in their families has been laid off or lost a job in the past year, while many others said their own or a family member's work hours had been reduced.

Marisa Delgado, 37, a grocery store worker who lives in Bonita Springs, Fla., has been her family's sole breadwinner since her husband was laid off from his construction job six months ago. Now her job hangs in the balance. The Albertson's store she works for is among 49 recently purchased by the supermarket giant Publix, and she has had to reapply for a job that is likely to reduce her pay.