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Economic crisis has made safety net for poorest families even weaker
Tuesday, December 16, 2008

The prolonged economic downturn is increasing the hardship on people at the very bottom of the income scale in the Pittsburgh area even as it threatens to pull more people from the middle class into the ranks of the poor.

As families lose their homes, workers lose their jobs and retirement savings are threatened, lines have grown longer at shelters, soup lines and food banks here and across the country.

"We've seen a higher percentage of people using our shelter and eating our meals who come from a more middle-class background who have fallen on hard times," said Steve Rorison, a manager at Light of Life Rescue Mission on North Avenue.

"The majority of homeless who come through our door are hardcore, so when someone comes in from a more middle-class background they stand out a bit in the way they express themselves and carry themselves," Mr. Rorison said.

Poverty rates tend to rise in every recession, and the uncommon severity of this economic slide could signal more trouble ahead for people of lesser means, said Ann Chih Lin, co-author of a recently released book "The Colors of Poverty," published by the Russell Sage Foundation in New York.

Dr. Lin, an associate professor of political science at the University of Michigan, said the downward migration of the middle class is hastened by the nation's massive foreclosure wave. For many families, their home is their major source of wealth. When they lose it, they have little else.

Also in a slower economy, the poor become more exposed to cascading crises in which one problem leads to another keeping them in a hopeless cycle of need, she said. "If you lose a job in a bad economy, it will take you longer to find one and in that period of unemployment, any other bad event such as sickness, a child doing poorly in school or difficulty with a landlord will make things worse."

Each new setback is that much harder to recover from. "Suddenly you are not dealing with one crisis -- job loss -- but more," said Dr. Lin. "The likelihood that a financial crisis will be extended by another crisis is greater. Those new crises in and of themselves make it harder to get out of poverty."

Charity leaders in Allegheny County recently joined forces to create an emergency fund to help more than two dozen nonprofit organizations that started seeing an unprecedented spike in demand for their services. Aid requests at Pittsburgh-area agencies have jumped 73 percent in the past six months while support for the same agencies is falling, according to a report by the Forbes Funds.

Those who help support the charities are also hurting from the economic downturn, which in turn leaves more without the help they need.

"The bulk of our giving comes during the holiday season and we've experienced a 25 percent budget shortfall in November," said Beth Healey, public relations director for Light of Life. "That's an indication to us of how the economy is affecting our donors. If this continues, it will affect the poor and destitute we serve."

Pittsburgh households that are turning to human services agencies for the first time, according to the Forbes Fund report, are most often those with incomes of up to $42,200 living paycheck to paycheck and barely making ends meet.

"An increasing number of these households in this income range have fallen into poverty," the report said.

Although the foreclosure crisis has not affected the Pittsburgh area as intensely as many other major cities, a significant number of homeowners here will suffer from higher adjustable interest rates in the next few years and many residents will need help rebuilding their credit ratings after being foreclosed on.

The cascading problems triggered by the economy can already be seen at Family Links in Shadyside, which operates a shelter for children aged 21 and under.

Lenny Prewitt, a senior program manager, said when families break up, many of them end up at the shelter after having to fend for themselves.

"In an indirect way, we are seeing the effects of what is going on in the economy," Mr. Prewitt said. "There's no way to quantify it, but we know there are families being hit by financial hardship and their core gets dissected and the family is scattered."

Poverty as a way of life shows no signs of slowing down. In 1980, the poverty rate in Allegheny County was 9.2 percent, climbing to 11.5 percent in 1990. In 2005, the latest year figures are available, the poverty rate in this county hit 12.4 percent.

And with the arrival of the winter months, local human service agencies are especially concerned about an expected influx of residents needing help for basic needs such as utilities that are close to being shut off and homes on the verge of default.

"The poor are like a fever," Dr. Lin said. "It's a symptom that something more fundamental is wrong. That there's an infection somewhere we haven't discovered yet.

"We should care about the poor because of the fact that if their families, schools, jobs or health is bad it suggests something is wrong with the system at large."

Tim Grant can be reached at tgrant@post-gazette.com or 412-263-1591.
First published on December 16, 2008 at 12:00 am