Nickel and Dimed: Barbara Ehrenreich and Tap Dancing on the Edge
Originally published in The Hook on March 11, 2004.
Best-selling author Barbara Ehrenreich nurses a bottled drink at Whole Foods café and talks about her research. She is understated, a trim blondish grandmother, nothing like the firebrand one might expect of the woman who wrote the book that helped propel the plight of the working poor into the national consciousness.
Nickel and Dimed: On (Not) Getting By in America, Ehrenreich’s first-person chronicle of low-wage labor, pulled back the curtain to expose a dirty little secret: Working hard and playing by the rules do not guarantee economic survival.
“The big change in the last 10, 15 years,” Ehrenreich, a new Charlottesville resident, says, “is that the people showing up at homeless shelters and food pantries are more and more likely to be employed.” Many of her neighbors would agree.
“Towards the end of the month,” says Allie, an employee at a package mailing company, “the refrigerator is really on E.”
Allie goes to soup kitchens for lunch almost every day. She can tell you which ones give the extras, the little bags of cookies and breads she brings home to her kids. On nights when she’s not working, she takes her daughters to the Salvation Army for dinner. Her days are a carefully choreographed dance of survival.
“I think people in Charlottesville live under this myth that everybody’s doing fine. And that’s very far from the truth,” says Joe Szakos, executive director of the Virginia Organizing Project, a group committed to securing living wages for working people.
“Particularly hard hit are food service workers, [people doing] retail, landscaping, hospitality. They work 60-70-80 hours a week,” he says.
Others are underemployed, unable to get hired in full-time jobs.
A bitter wind buffets the men and women bundled against the cold, waiting patiently for the doors to open at Holy Comforter Church. Those without heavy coats fold into themselves, shuffling in place. Black, white, Latino, young and old, they wait for food. It’s a long line.
Inside, generous servings of pasta, salad, bread, and lovely desserts await the hungry. Nursing students prepare to take blood pressures in front of a table loaded with neatly folded donated clothes.
Maria is a city resident living on the edge. Her rent is $700. But the salary she earns as a hair stylist makes it necessary for her to apply for food stamps for herself and her young son.
“We’re the ones who do the service work for the community,” says the vivacious brunette, “and we’re poor.” Seated near her is Stan, a part-time UVA employee who’s here because his electric bill is a higher priority than lunch money.
What is poverty?
Timothy Hulbert, President of the Charlottesville Regional Chamber of Commerce, says of local wages: “Our Chamber members overwhelmingly pay in excess of $8.50 [per hour]. The practical reality is that in this marketplace, you’re going to struggle to get and keep the employees you want unless you pay a decent wage.”
Hulbert explains that by “decent,” he means “competitive.”
“So the market forces in Charlottesville and Albemarle, for the most part, are working,” he says, “but they’re not perfect. Some people are making less.”
The problem, says Joe Szakos, is “Even $9 an hour in Charlottesville is not enough to live on. Everybody knows that.” In fact, a single parent of three, working fulltime for $9 an hour, falls below the federal poverty line.
As for the $5.15 federal minimum wage, “beyond obscene” is how Szakos describes it.
Back at Whole Foods, Ehrenreich asks a clerk about her income. The employee reports she’s making $6.15 an hour, adding that at that salary she can’t afford to shop at the upscale grocery where she works.
John Robertson, a Whole Foods’ team leader, explains that most employees start at $8 an hour, and he adds that Whole Foods’ benefits package includes health insurance paid for by the company, stock options, and a 20 percent store discount.
But even $8 an hour, Ehrenreich notes, “doesn’t square very well with local rents.”
Measuring poverty is problematic. In 2004, income above $18,850 exceeds the federal poverty level– for a family of four. The 2000 Census reported that 12 percent of Charlottesville families meet that criterion. Of families headed by women, more than 30 percent were below the line.
In Albemarle, 4.2 percent of families were below the poverty level in 2000, with 12.4 percent of female-headed households below the threshold. (Although the Census characterized nearly 26 percent of all Charlottesville residents as impoverished, Dr. Merry Hanson of the Thomas Jefferson Planning District Committee believes this number might be distorted because of the inclusion of UVA students who may have little or no income.)
A Seattle-based researcher offers another model. This one takes into account regional cost differences in housing, food, health, and childcare, taxes, and transportation. According to the researcher, Dr. Diana Pearce, “The Self-Sufficiency Standard” for Virginia suggests that a local parent with an infant, a preschooler, and a school-age child needs an annual salary of over $45,000 with health benefits in order to exist without assistance.
Out of the frying pan
The mid-’90s saw a national push to restrict dependence on welfare and to encourage employment. Time limits were put on certain types of assistance. Of welfare reform, Ehrenreich writes: “Both parties heartily endorsed it, and to acknowledge that low-wage work doesn’t lift people out of poverty would be to admit that it may have been– in human terms– a catastrophic mistake.”
Charlottesville’s Department of Social Services has had an almost 90 percent success rate in helping clients who are receiving Temporary Assistance to Needy Families (TANF) find jobs.
“The unfortunate thing,” says Ursula Palmer, chief of benefits programs, “is that they’re transitioning from welfare to low-wage work. And they’re still living in poverty.”
Palmer reports the average hourly pay for these clients is less than $7. “Their wages are not sufficient for them to meet their daily needs of rent, food, and clothing for their children, and medical expenses,” she says.
Szakos says that without self-sustaining incomes, workers must turn to the community for help. In other words, taxpayers are subsidizing employers who pay below a living wage.
Hulbert replies, “Taxpayers subsidize a lot of things. We subsidize home mortgages, we subsidize education. My guess is that if we put all those subsidies in a pot, you’d pull some of them out, and I’d pull some of them out, and maybe some of yours would be mine and some of mine would be yours… I don’t have a good answer to that question. I don’t think anybody does.”
Palmer estimates that approximately 5,000 local people receive benefits administered by Charlottesville Social Services. “I would guess that at least half are working or looking for work, and the other half are not able to work,” she says.
Palmer emphasizes that this figure does not reflect the numbers of people turning elsewhere for help. The Thomas Jefferson Area Food Bank reports a 25 percent increase in food distribution over the past three years.
No place like home
Planners say Charlottesville has a shortage of affordable housing, and it’s little wonder. Restrictive zoning ordinances have been blamed for the scarcity since places where multi-family units can be built are limited. Meanwhile, demand by UVA students for high-end apartments may be driving up rents. According to a report from the Thomas Jefferson Planning District Commission, 12,000 of UVA’s more than 18,000 students live off campus.
With the market rent for a two-bedroom apartment in the area hovering around $680 (according to MACAA, the Monticello Area Community Action Agency), a minimum wage earner would have to work more than three 40-hour weeks just to pay such rent. Throw in taxes and normal family expenses, and it becomes clear why working people are among the guests at the soup kitchen.
“Rent is high in Charlottesville,” says Allie. “You need at least a thousand for the first month’s rent and deposit. And then you have to come up with a deposit for electric. And that’s just saving up money to move.”
Allie’s family stayed at the Salvation Army while she was socking away the money for an apartment. It took months. “It’s hard to save up,” she explains.
Buying a home is even harder. According to the Charlottesville Area Association of Realtors, the median sales price for the market area in the first half of 2003 was $187,000 a $19,000 jump from mid-year 2002.
Where does it hurt?
Ehrenreich describes poverty as place that smells like fear. Courtney knows this dread. She’s been caring for her mentally handicapped brother for almost 10 years. While committed to keeping him at home, she doesn’t know what their address will be when they can no longer afford the hotel they’re staying in.
“This is about as scary a time as I’ve ever lived,” Courtney says. She had to stop working in the hospitality industry after their last living situation fell apart. The slight 46-year-old supplements her brother’s disability payments with odd jobs: During a late February storm, she earned $60 shoveling snow.
Courtney, who is uninsured, is losing her teeth, which makes her self-conscious. “It’s a symbol of being a have-not,” she says. “It’s almost as if [people] tally up a score, and they just knock 10 points right off the top. I probably shouldn’t give a damn about that, but sometimes I do. It just hurts my feelings.”
David K. Shipler, author of The Working Poor: Invisible in America, writes that bad teeth limit employment opportunities, noting that they are both an indicator of and a contributor to poverty.
Erika Viccellio, executive director of the Charlottesville Free Clinic, calls the state of dental care for the uninsured a “community crisis.”
“If we applied our [dental] wait list to the amount of service we’ve been able to offer, it would take us six years to treat everyone,” Viccellio says. And even if Courtney were eligible for Medicaid insurance– which she isn’t because she’s not disabled, pregnant, or a TANF client– she’d still have to search for a dentist willing to accept it. The National Center for Chronic Disease Prevention website reports that only 17 percent of Virginia dentists do.
Playing by the rules
Donna is a full-time salaried employee at UVA Medical Center. When she leaves that job at the end of the day, she clocks in for her second job in retail where she earns $7 an hour.
Donna says of herself and her struggling co-workers: “These are the people who take care of the patients; they make the phone calls, they do the registration, they make sure the referrals are there so the University gets its money.”
But Donna says their salaries don’t add up. “Gas prices, real estate taxes, food, and health premiums continue to go up but the wages are stagnant,” she says. “So what you made five years ago isn’t going to cover the prices today.”
Donna is also discouraged by a lack of paid holidays. “If you’re not here [on Christmas], they take it out of your vacation time,” she says, adding, “Benefits– such as they are– are on an ever-downward spiral.”
Donna hasn’t applied for charity, but she’s worried about being away from home between 60 and 70 hours a week– leaving her teenager alone. The single mom says she feels like she’s spending her life “tap dancing away from the edge.”
The University of Virginia and its Medical Center employ upwards of 18,000 local people. Marguerite Beck, director of public affairs at UVA Health System, says, “The Medical Center gave performance-based increases in 2000, 2001, and 2004. In 2003, employees received either a market adjustment or a bonus. In 2002, employees received a bonus.
“The amount of these increases varied either by performance or job classification,” she adds.
While insurance premiums have gone up, “The majority of this increase has been absorbed by the employer, with only a small percentage passed on to UVA employees,” Beck notes.
As for paid time off (PTO), “There are no specified holidays that are designated as paid holidays. The employee uses PTO for both vacation and holiday time. However, employees who work on Christmas receive time-and-a-half pay.”
In an article in a recent Daily Progress, Jan Cornell, president of UVA’s staff union, describes Medical Center workers as having “poor morale, low pay, unfair human-resources policies… and a paid time-off plan that restricts annual and sick leave.”
Pulling the rug
The Chamber’s Hulbert notes the “continual erosion of private enterprise and jobs.” Between 1999-2002, more than 5000 area jobs disappeared. While Hulbert stresses that this is not a net number– other positions have been added it’s highly unlikely the workers “are employed some place else in this community at their [former] salary levels,” he says.
When CD-maker Technicolor left town, Allie was among the hundreds who lost paychecks. She says the company strung her along as it packed up.
“I would go all the way in, be there two hours, and they’d say ‘Okay, you can go back home.’ Sometimes they’d say they didn’t need you at all,” she remembers.
Allie was paying for childcare and carfare about as much as she was bringing in. Finally she just stopped going. “That made me not get my unemployment, because they said they had work for me to do and I refused it,” she says.
Technicolor’s media relations officer declined comment.
Allie used to earn $16 an hour. Now she’s making $9–three days a week.
When you’re poor, transportation is serious business. The city has extensive bus service– with some routes going from 6 in the morning to midnight with a 75-cent fare– but it runs only six days a week. That’s an obvious problem if one is supposed to be deep-frying French fries up Route 29 for the after-church crowd on Sunday.
Getting into town from the outlying counties isn’t cheap. Publicly funded Jaunt, for example, charges $6 for a round trip from Crozet to town. And while this transit system provides free rides 24/7 for participants in the Welfare-to-Work program, there’s no weekend service for the general public. According to a report by the MACAA, a county resident earning minimum wage might spend as much as 15 percent of his salary getting to work. Allie used to pay $12 for roundtrip taxi rides to Technicolor on Sundays.
It’s the little things
It’s important to Allie that her girls look good. Even though she often washes their clothes in the bathtub, her monthly laundry bill is over $40. On laundry day, she stuffs everything into a rolling backpack which doubles as a grocery cart– and walks to the laundromat. Cleaning bulky coats was a winter burden. Miscellaneous items such as dishwashing liquid, toilet paper, and hair and sanitary products also drain the family budget.
…and the not so little things
Allie’s daughters miss out on a lot. Cheerleading is a passion for her high schooler, but finding rides home after late games is almost impossible. Allie worries her daughter might have to quit the team. This wouldn’t be uncommon. Local research shows that poor kids are much less likely to be involved in extra-curriculars than their more affluent counterparts.
The hamster wheel
“One little thing goes wrong, and you will be just derailed, ” Ehrenreich says of the fragile economic balancing act of people like Allie. When the balance shifts, many of the working poor are forced to turn to what some people call predatory businesses.
Payday lenders, for instance, offer small loans some with interest rates as high as 15 percent. “Once you get in, it’s hard to get out,” admits an employee of one such area business, “especially if you take out a $500 loan. If your pay- check is only $600, and you’re giving me $575 of it, you have to turn around and get it right back to have money for the next two weeks.”
Although rollovers are illegal, borrowing, repaying, and shelling out fees on the same $500 works out to be the equivalent of an annual percentage rate of almost 400 percent.
“People don’t come here just to be coming here,” the employee adds. “Their car breaks down. Or a kid’s hospital bill comes in.”
In fact, some of the charges are so inflated that the State Corporation Commission published a list of alternatives to high payday loans that suggests, for instance, borrowing from friends.
Mainstream credit card companies also pose a danger. According to Bankrate.com, almost 40 percent of them “have built ‘universal default’ clauses into their agreements, which allow them to raise interest rates if a client is late making a payment even to someone else!”
Interest rates can go up to almost 30 percent. One local consumer credit counselor says clients get into trouble charging groceries. When they’re not able to catch up, late fees push them over the limit, triggering additional charges.
Being poor limits your choices but not your desires, and so there are lease-purchase stores to capitalize on consumer aspirations. Matching furniture is something Allie longs for.
“It sounds so good to have a five-piece living room suite,” she says of a collection she’s seen at one local rent-to-own showroom.
She’s also had her eye on a bunk bed to replace the bed her daughters are sharing.
“Rental purchase agreements are designed to appeal to a wide variety of customers by allowing them to obtain merchandise that they might otherwise be unable to obtain due to insufficient cash resources or a lack of access to credit,” explains Rent-A-Center’s website.
The company also offers complimentary maintenance and delivery– attractive features to someone like Allie who once carried a thrift store television home on the trolley. If you don’t have credit and can’t come up with the cash for a big-ticket purchase, breaking the price into weekly payments makes it manageable.
It costs, though.
The Rio Hill Rent-A-Center has a Whirlpool refrigerator for rent for $15.99 a week. However, the full contract is for 91 weeks, for a total price of $1455.09. The same model retails at Sears for $469.99.
Bill Keese, executive director of the Association of Progressive Rental Organizations, denies that the industry takes advantage of poor people.
“They don’t know what they’re talking about,” he says of critics. “We have a higher satisfaction rate among our customers than retail has.”
Pointing to the “Mom and Pop” feel of the stores, Keese notes that an increasing number offer lifetime reinstatement if service is interrupted. “And,” he says, “unlike retail, we don’t report [customers] to credit bureaus.”
Why do 75 percent of customers nationwide return items within the first four months?
“Any number of reasons,” Keese replies. “They may have lost their job; they may have had illness in their family and couldn’t afford to make the payments anymore. People will rent a refrigerator, and their mother or Aunt Suzie decides to give them a refrigerator or give them money to buy one– they’ll return to us and do that.”
Rent-to-Own is a nearly $6 billion a year industry.
After lunch at Holy Comforter, a man passes around a newspaper ad. It’s a call for medical subjects– an opportunity he thinks the other soup kitchen visitors might want to know about. In addition to the $700 pay, the offer includes a hotel stay.
Outside, back in the wind, Courtney tries to give her scarf to a homeless man. “At least I have a place to stay,” she explains.
“Most civilized nations compensate for the inadequacy of wages by providing relatively generous public services such as health insurance, free or subsidized housing, and effective transportation,” Ehrenreich reports.
But such observations rankle. Although she’s a hero in many quarters for actually working in the food-service industry, during a recent speech she gave in North Carolina some students and lawmakers characterized Nickle and Dimed as “classic Marxist rant” and “intellectual pornography.”
Ehrenreich responded in The Progressive Magazine: “I don’t know much about pornography and am eager to hear from any reader who has detected it in Nickle and Dimed but I do know obscenity when I see it.”
Ursula Palmer of Charlottesville Social Services points out that public assistance helps more than just its direct beneficiaries. The money stays in the community.
“It pays our landlords,” Palmer says. “It pays our grocery stores. It pays our medical providers.”
Ehrenreich closes her book with a prediction about the working poor: “They are bound to tire of getting so little in return and to demand to be paid what they’re worth. There’ll be a lot of anger when that day comes, and strikes and disruption. But the sky will not fall, and we will all be better off for it in the end.”