Standing on Shaky Ground
For up to 50% of Americans, a job loss or medical crisis could spell financial ruin.
I knew a guy who lost his job, his home, and, subsequently, his self-respect.
His story occurred years before terms like “strategic default” entered our vocabulary, but it’s happening a million times over today.
A new report from the Rockefeller Foundation, “Standing on Shaky Ground: Americans’ Experiences with Economic Insecurity,” states that one-third to one-half of all Americans would be vulnerable to serious economic instability if they suffered a medical or employment crisis.
Instability is defined as lacking substantial financial reserves to draw upon in emergencies. It’s not being able to pay off current debt or to borrow $5,000 from family and friends if needed.
One-third to one-half: That’s a lot of people who, according to the report, cut across all income lines. Over the past four years, the foreclosure crisis has claimed 10% of all homes with a mortgage, The New York Times reports.
Anecdotes don’t make an argument or good public policy. But behind every statistic is a story more commonplace than not. And behind each story is often a family that deals with the consequences of foreclosure long after the actual event.
The man I knew was a senior executive for a corporation, which sold two factories where he worked to an even bigger corporation located 1,000 miles away. The new owners made him CEO. His job was to close both factories and liquidate their assets. He was guaranteed a good job afterward.
The idea sickened him: The factories were viable, and losing them would mean losing hundreds of jobs. He knew the majority of displaced workers would be hard-pressed to find new jobs.
A man of principle, he then made what was the worst decision he’d ever make for himself and his family: He quit.
This veteran—an enlisted man who became a captain and won the Bronze Star—thought his country was better than what large corporations were doing to it. And he was confident he’d find another similar job.
Inevitably, he struggled financially, eventually missing mortgage payments because he lacked not only a job, but financial reserves. He tried to negotiate a modified payment schedule with his bank. He launched a small sales company as a last resort but he ran out of time.
The bank foreclosed. Bankruptcy was out of the question: His pride wouldn’t allow it and he didn’t like stiffing a creditor. He just needed time.
The sheriff’s notice arrived, giving him just days to vacate the place he and his family had called home for two decades. He never showed his wife and kids any outward signs of stress because he was a strong, old-school guy. But at night, he’d sit in front of the fireplace deep in thought and rub his hands together.
He blamed the two corporations for the damage caused to the community but not for his situation. His choices, he said, were his own.
Three sons scrambled to bail him out. By digging deep, they were able to buy the house and halt the eviction. They paid the mortgage for the next five years.
While the father was appreciative, it forever altered the family dynamics. In his mind it branded him a failure, even though he had similarly helped his own father years before.
I’m often appalled by the tenor of the debate over the unemployed or people losing their homes. Some seem to believe that all these folks are deadbeats or get-rich schemers.
“Get a job,” they say. “Start a small company,” they advise. “Sell your home, and rent” (as if it’s as easy as that). There’s seemingly little compassion for our fellow citizens.
I believe the guy I knew could have used a credit union. Not because the outcome would have been different, but he would have dealt with more compassionate people who at least would have searched for a possible solution.
That’s all he would have wanted—not a handout and not charity; just a little respect.
Watch Jacob Hacker and Mark Schlesinger from Yale University discuss "Standing on Shaky Ground: Americans’ Experiences with Economic Insecurity," the first study to detail how economic insecurity affects the well-being of Americans. It's based on a new two-wave survey of Americans that examines their experiences and perceptions between March 2008 and September 2009.