FISCAL FALLOUT | Making Ends Meet

From Middle Class to $5 in the Bank

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By Brigid Schulte
Washington Post Staff Writer
Tuesday, November 25, 2008

Mark Goldman once lived comfortably in a house with a pool. He ate out. A lot. With a six-figure salary from his work in information technology, middle class was more than his economic status: It was his state of mind. Comfortable. Secure. Hopeful.

Alenia and Kirby Johnson didn't have the pool, but, like Goldman, they had good jobs, paid their bills on time and were saving to buy a house to tighten their hold on middle-class life.

Then came the layoffs.

Each of these families learned just how fast the slide to the bottom can be. The Johnsons have been able to eat some months only because they became poor enough to qualify for public assistance. And Goldman, 57, who is in his 11th month without a full-time job, thinks in his worst moments that bankruptcy might be his only option.

Don't talk to them about a rainy day fund, the three to eight months of living expenses that financial advisers recommend everyone set aside as a cushion. Goldman burned through his in a few months. "Oh my God, is that even realistic?" Alenia Johnson asked, laughing at the idea. "Who can afford to do that?"

Theirs are stories that will become all too familiar as the stock market slide, global bank crisis and credit crunch move into the next phase: job shedding, pink slips and company restructuring. Already, Citigroup, Sun Microsystems, Yahoo, General Motors, Ford, Morgan Stanley, the Shopping Channel and a host of big companies have announced major layoffs. Last week, more Americans filed for unemployment benefits than in any week in 16 years. The most pessimistic of Federal Reserve officials expect joblessness to rise to 8 percent at the end of next year, the highest in a quarter-century.

Economists say the Washington area is more recession-proof than other regions in the country because of the large number of federal jobs. But several large employers, including Washington National Cathedral, the Discovery Channel, Circuit City, CarMax and Legg Mason, have announced layoffs. And the pain of the loss -- the struggle to regroup and survive -- is huge when the person laid off is you.

Alenia Johnson, 31, learned the importance of living within her means long before her husband, Kirby, lost his job in June. She had almost finished college when she was forced to quit because she couldn't afford to have her son, Lozenzo, now 7, and pay for books and tuition. Lorenzo's father held several jobs, but after Sept. 11, 2001, she said, he came home one day and never worked again. After breaking off the relationship and becoming a single mother, she went on public assistance until she found a job as an administrative assistant at the American College of Physicians in the District. She still works there.

So when her husband, Kirby, 37, was laid off from his job as a security guard, she had long been careful with their budget. They had big student loans, but no credit card debt. Unlike many of their friends, they had resisted easy money deals to get a house. Still, she had no idea how tough it would be. She had their daughter, Kadence, in April and had been home on maternity leave. "I went back to work lickety-split," she said.

They cut the luxuries first: movies, restaurant dinners, pedicures and hair appointments. But soon they were hemorrhaging anyway. They decided to concentrate on keeping a roof overhead -- their apartment in District Heights -- and food on the table, and pay the rest when they could. Their phone was cut off. The cable bill lapsed. One night, they heard the security alarm beeping on Kirby's 2002 Dodge Ram as repossessors came with a tow truck to haul it away.

Alenia applied for public assistance and began frequenting Sav-a-Lot, a discount grocery store where she could buy off-brand food cheap. She opened her cupboard recently. "This soup isn't Campbell's, it's Kaskey's," she said proudly. "The can of chicken here isn't Sue Bee, it's Sweet Sue. And the tuna isn't StarKist, it's SeaNet. And it costs so much less than anything you could find at Safeway."

But while Alenia pinched pennies, Kirby struggled internally. Raised in St. Croix, Virgin Islands, he had once juggled two jobs and college classes and survived on two hours of sleep a night.


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