Sunday, September 28, 2008

Economic Reflection in a Time of Less

The New York Times today (September 28, 2008) had an interesting article based on six vignettes taken from the lives of new yorkers. Each one touches on the impact of less money flow in their lives. I relate to each of them in a different way (and only highlight three of the six below), but can you determine which of these creates intense mixed feelings for me?

New Yorkers Reflect in a Time of Less

A small-business owner in Brooklyn worries about making the payroll. A homeowner in Queens faces foreclosure. A suburban stay-at-home mother cuts back on luxuries. A retiree watches rent, food and cable bills rise while her income stays flat. An aspiring musician chooses between recording fees and a trip to see his family at Christmas. A head of a nonprofit group sees grants disappear.

Six New Yorkers anxiously watch the Wall Street roller coaster and wonder how it will affect them.

Making Drinks and Song, But Not Enough of Either

Rescalla Cury, 22, an aspiring musician, lives in Williamsburg, Brooklyn, and tends bar at a restaurant in Chelsea:

I came to study music. I am taking private lessons, which made things a little bit harder. I also wanted to take a sound engineering course, but since I’m a foreigner, I would have had to pay the whole course up front, like $15,000. I play solo. I sing and play the guitar. My music is like Brazilian jazz with rock and blues. Hopefully I’m not going to be a bartender for the rest of my life.

What I can see from last year to this year is that the season is definitely slower. I’m making less money because less people are going out. And when they go out, they spend less than what they used to. I’ve been doing the same, I’ve been having friends together in my house, to drink bottles of wine, instead of going out to bars. It’s kind of like a chain. I make less money, and I stop going out too.

The rent is so absurd, and everything is so expensive. How can people afford $2,200 for an apartment? I want to stay in the apartment I’m in; hopefully my building won’t get sold.

I was planning to start recording a track by the end of the year, but I don’t know if it’s going to happen or not. Because I may have to choose between recording a track and going home for Christmas with my family.

Income Is Unchanged, Costs and Worries Rise

Betty Jones, 79, a retired social work administrator, lives in Stuyvesant Town, in Manhattan:

I live on a fixed income to the extent that I get Social Security and then I get a small federal pension from my husband, who died in 1999. Then I get a monthly check from my retirement plan.

Those three checks add up to about $5,000 a month — about $2,000 a month short for covering my expenses. My basic yearly expenses are $60,000 to $65,000 but other things come up. I fortunately have some other savings my husband and I put aside, and that’s how I make up the difference.

Rent has gone up. The cost of food is up. I have RCN for cable and phone and that’s gone up. So I really have to budget more carefully now.

I just came back from Rwanda. It cost about $5,000, for 10 days. I went with People to People, to volunteer in orphanages and vocational training programs for young people. I came back wondering what’s happening to my money. It was right in the middle of the week when the market crisis was happening. I was worrying, “What about my money-market at Citibank?” I get my statements and I’m getting poorer and poorer. I’ve lost about $40,000 or $50,000 in the past few months.

The money has to last a long time. I expect to keep ticking.

I’m not nearly as frightened as some of my friends. But I won’t spend $5,000 for another trip right away. Having been a part of the Depression as a child, I worry about what happens on Wall Street. I wonder, “My God, are we going to live through that again? Is everything going to collapse around me?”

I haven’t taken any of my money out of the market yet. Where do I put it, under the mattress?

Restoring Hot Lunches, At the Expense of Jobs

Stanley Richards, 47, is chief operating officer of the Fortune Society, a nonprofit organization in Long Island City, Queens, which helps former convicts find jobs and housing:

Our budget is about $14 million. Ninety percent of our contributions come from government funding and the rest is mostly foundations. We’re already feeling the pinch. We’ve talked about the worst-case scenario and what programs we absolutely can’t cut. The cuts will come down on the drug treatment side, on the housing side, for the next few years.

This year for the first time, the city gave us a 50 percent cut in a contract that had started in January. It was already August — the year was more than half over — so we had to end the program immediately and go through a series of steps to recoup the money we’d already spent past July 1.

Also, we had a discharge-planning program — for prisoners who are going to be released soon. The Department of Corrections stopped funding it, so we’ve canceled that.

We’re looking at a minimum of a 5 percent cut from the city. State contracts will be cut worse. We expect notification any day now. A funder at the city Department of Health and Mental Hygiene told us to be prepared for our AIDS housing funding to be cut by two-thirds, from about $1.6 million a year to $600,000.

Two foundations have told us that their portfolio is in trouble. One is cutting back their contribution this year and the other told us to reapply and ask for less.

We wiped out our hot lunches earlier this year, but we’ve decided that has to stay, and so we’re going to bring it back and have layoffs. The food program, for some of these people who come in — some of them have kids — it’s the only meal of the day. Right now we’re serving peanut butter and jelly and what they call “jail soup,” which is dry packets.

Earlier this year, we laid off 21 people — about 10 percent of our staff. It’s very personal for me. A lot of people who work here are former inmates. This is the first place they come when no one else wants to hire them. I started here in 1991 as a counselor. Prior to that, I’d been in prison several times, for robbery the last time, a four-and-a-half year term.

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