Is the glass half full or half empty? It’s the same glass, depending on your job situation or political persuasion. I’m one who says that both views are correct. The economy is trudging out of the recession, but the road is littered with casualties.
My friend Bill is a perfect case.
Five years ago, then in his mid-30s, Bill was earning $65,000 as a manger of a printing plant. His wife was raising their two children, but planned on returning when the children reached the upper elementary school grades.
“We took out a home equity loan to help us get through this one-income period,” he said. “We figured we could quickly pay off the loan when my wife got back into the workforce.”
The recession gutted their plan.
In the past year, Bill’s wife has returned to work. She has a part-time job (20-30 hours per week) paying $28,000 annually. However, Bill’s pay has tumbled. His full-time hours have been sliced and his annual bonus pay eliminated. Last year he earned $40,000.
Between the two, the family earned $68,000, a mere $3,000 more than their income in 2007.
“And it certainly costs more to live,” says Bill. “My kids are now entering junior high, and we all know the price of teenagers. At the same time, we’re paying more for health insurance and groceries, and now gasoline.”
His home (purchased 12 years ago) is worth slightly more than what he owes, but has lost about $40,000 in equity due to falling real estate values. Additionally, he and his wife have struggled to make a dent in their home equity debt.
“We’ve had to cut back,” he says. “We don’t spend anywhere near as much at restaurants and have totally eliminated Saturday night dinners at our favorite neighborhood eatery. We’re also driving our cars longer and we haven’t taken any major vacations.”
But Bill and his wife aren’t downcast about their situation. “We’ve adjusted. We’re not upside down on our home. We still eat well. And it appears that business is picking up both at my wife’s work and at my job. It could be a lot worse.”
Will his economic situation dictate his vote for President?’
“I’m not sure yet,” he says. “Obama hasn’t done all that he promised, but then again he faced some real bad economic conditions when he took office. The only Republican I’m tempted to vote for is Mitt Romney, but I’m not convinced that a rich man like him can understand the average family. I think the rich should pay a little more in taxes; they can afford it. When it comes to my vote, I’m not sure which way I’ll go.”