The first installment of the series highlights the efforts of Good News Baptist Church in Jennings.  Several days a week, a team of church volunteers makes the early-morning drive to the St. Louis Area Foodbank to retrieve all the food they can cram into their cars.  As you can imagine, Good News has never been concerned about having too much food to give.  The church has observed the need grow as the economy has worsened, and it has served many families who never imagined they would seek the help of a food pantry.

The sheer bulk of food distribution is staggering.  Last year, Good News gave out 341,673 pounds of food.  This is only a small portion of the 22 million pounds of food distributed by the St. Louis Area Foodbank to 261,000 people.  Of those assisted, 39% are children.  Even more remarkable, these massive efforts are fueled mostly by donations and unpaid volunteers.  The Beacon makes a point of highlighting the enthusiasm of the workers at Good News.  The group certainly owes much of its success to the kindness of its members and their ability to create a comfortable environment where everyone feels welcome.

Organizations such as the foodbank must face bleak realities each day, yet it is uplifting to consider the success they have at mobilizing volunteers and helping those who need it most.  Especially in these hard times, it is refreshing to see the charitable spirit of St. Louis.  As part of the series, the Beacon posted a list of ways residents can help in the battle against hunger.  Check it out to see how you can contribute.

You can read other installments in the Beacon’s series here and here.

The most recent Job Talk from the St. Louis Beacon laid out the numbers.  The economy gained a total of 162,000 jobs during March.  The healthcare and manufacturing industries were exceptionally strong, gaining 27,000 and 17,000 respectively.  While encouraging, the figures are partially tempered by the large portion of temporary positions that make up total job creation, including 48,000 new census employees.  Still, experts are quick to point out the temporary job growth is still job growth, and these individuals will spend money and fuel the economy just the same. 

Also humbling is the unemployment percentage, which was unchanged in March.  It held steady at 9.7% for the third month in a row.  It’s worth noting, however, that the constancy of this figure should not be seen to contradict the positive job growth numbers.  As the economy improves, more people who had previously left the job market are once again looking for work, which increases the unemployment rate.  However you slice it, this sort of job growth is a stark contrast to the peak of the recession, when the economy was losing over 700,000 jobs a month.  Perhaps the pair of economists recently interviewed on the NewsHour described the numbers from March best: “encouraging but modest.”

If your family is struggling in this difficult economic climate, please heed the Wrights’ advice and seek help! You can find a comprehensive list of St. Louis area resources on our Find Help page. Don’t wait!

The event will take place on March 11th at the Urban League from 3:00pm – 5:00pm.  The Urban League is located at 3701 Grandel Square, St. Louis, MO 63108.  Visit their website for more upcoming events or to see other services offered by the organization.

R.A.A. is a local organization that works to improve the conditions of struggling residents and low-income communities by providing educational resources.  The group collaborates with a number of community partners to sponsor events ranging from job skills training to voter registration drives.  To learn more, visit their website, where you can sign up for their mailing list and explore volunteer opportunities.

More than ever before, people in this position are choosing to strategically default, or “walk away.”  This decision has severe effects on one’s credit rating, but people are more and more willing to take the hit, opting to rent for drastically cheaper rates.  In a letter to NPR’s Planet Money blog, one homeowner described how staying in his home doesn’t make sense: “If house prices climb by 5% a year, it’d be 15 years before we broke even … We can rent for half the price. Over the 15 years to break even, it would cost us $12,000 a year in extra payments for no equity and we’d be trapped in the home.”

The issue of walking away has been discussed from many angles.  Often creeping into the dialogue is the question of morality: isn’t it wrong to abandon a loan and shirk one’s financial obligations?  Homeowners are increasingly demonstrating that they don’t think so.  One factor is the prevalence of foreclosures.  Experts suggest that defaulting on a mortgage was once seen as a sign of irresponsibility.  Now, however, foreclosures are commonplace, and this stigma has diminished.  People are more likely to consider walking away when several of their friends and neighbors have already been foreclosed on, especially when continuing to make mortgage payments is such a raw deal. 

A widely read report by Brent White of Arizona State University argues that individuals observe different norms than financial institutions, and this has a crippling effect on homeowners’ financial decisions.  Businesses operate with the sole purpose of maximizing profits, even if that means increasing rates or downsizing their workforce of loyal employees.  Such moves are viewed with the understanding that they are necessary for the company to remain economically viable.  Individuals, however, see moral implications in their decision to default on a loan, even when it is by far their best financial option.  This asymmetry works against homeowners.

Strategic defaults serve as another illustration of the recession having the potential to forever alter how Americans approach their finances. This issue will surely continue to develop as the weak housing market lingers.  The prevalence of strategic defaults has been widely covered among major news outlets and many perspectives are out there.  For additional information, try this New York Times report or this story from CBS News. 

If you are having trouble paying your mortgage or are considering walking away, please see a housing counselor who can explain all of your options.  To find one near you in the St. Louis region, see our community resource map.  You can locate HUD-approved housing counselors nationwide at HUD’s website.

The article highlights Chris and Kelly Green, whose family of five has been crippled by unexpected expenses and the difficult job market.  Both parents are employed, but Kelly has reduced her hours with the arrival of their new daughter.  Their precarious finances were dealt a crushing blow when Chris was in a car accident, leading to medical and repair bills.

As part of the Greens’ efforts to reduce expenses, they successfully appealed to their lender.  Though they did have their payments reduced for a short period, the temporary fix didn’t make a dent in the family’s long-term financial problems.  In hindsight, the opposite may be true.  The report explains that the family is required to make up the difference, and they must pay 150% of their original payment for 11 months.  The additional expense is difficult to manage as their financial situation has not changed considerably since they first applied for the modification.

The government’s effort to aide homeowners has been largely unsuccessful.  Obama’s Home Affordable Modification Program (HAMP), an initiative that gives incentives for banks to modify the mortgages of struggling homeowners, was widely viewed as a good start in the effort to turn the tide of the housing crisis.  HAMP, however, has not met the administration’s expectations of saving 3 million homes.  The program has resulted in only 66,645 permanent modifications. 

You can read the full Beacon article here.  As always, if you’re having difficulty making your mortgage payments or are facing foreclosure, please speak with a housing counselor.  You can find a trusted resource close to you by using our community resource map.

The economic downturn has led to unemployment among groups who have never before had to worry about paying their bills on time.  Among them are established professionals in their 40s and 50s who were left without a job and little direction.  As we’ve discussed before on our blog, people who are unaccustomed to financial problems are often reluctant to seek help, making them more likely to mismanage their limited assets.  The GO! Network emerged from the recession with the specific purpose of assisting these individuals. 

GO! Network hosts talks from business professionals who discuss a variety of topics from networking to entrepreneurship.  The organization also hosts job fairs, workshops, and other events.  The GO! Network has created a strong community of like-minded individuals.  The group has a professional culture tha’ts upheld by each member.  They dress in business attire and stay focused on the pressing issues they’re facing.  As one member puts it, “You feel like this is a professional job search.”  Participants are able to maintain their business mindsets that might otherwise slip away during unemployment.  

The group has met great success: “Nearly 200 people attended the first session on Feb. 3, 2009. Since then, more than 2,000 people have joined the network and nearly 25 percent of them have found full-time employment.”

For more information on the GO! Network, including upcoming events and programs, visit their website.  You can read all reports from the Beacon’s Job Talk series here.

We hope you’ve enjoyed these videos.  A huge thanks to Buz Zeman for talking with us.  Additional information on reverse mortgages is available online from HUD and AARP.  If you are seriously considering a reverse mortage, please heed Buz’s advice and talk with a good counselor!  To learn more about H.O.P.E. or to make an appointment with one of their housing professionals, visit their website.

If there are other products or issues you’d like us to discuss on the blog, please let us know!

A recent Job Talk report describes the situation of a local resident who falls into the category of “underemployed.”  This distinction applies to any individual who has a job, but it’s in one way or another not adequate.  This includes workers who are forced to work part-time instead of full-time or who have resigned to taking low-skill, low-pay positions not suited to their experience level.  These individuals are not counted in the unemployment statistic more commonly reported in the news.  Current underemployment is estimated to be 17%, a whole 7 points higher than the unemployment rate.

The article illustrates how many people in this situation are in dire straights.  Though they have some source of income, it’s often only a fraction of their previous salaries and not adequate to cover their expenses.  The man in this article works 50 hours a week, yet has undergone bankruptcy and is facing foreclosure.  His struggles have taken a toll: “It’s brutal.  It is just a crushing, crushing depression.  I wouldn’t wish it on my worst enemy.”

The report brings to light an important, though not uplifting, truth surrounding the economic downturn.  Many people who are able to escape unemployment have found themselves crippled by the recession.  The economic downturn has had complex, far-reaching consequences, and they’re not easily captured by any statistic.

We’ll continue to follow the Beacon’s Job Talk series and update our blog as new reports are posted.  You can read all articles from the series here.