We can learn alot form young strivers. Their stories resonate and let’s not make the same mistakes of the past when it comes to the government actions. Fortunately, we’re heading in a better direction I would say…
In a chilly economic climate, students who formerly earned anywhere from seven thousand to fifteen thousand dollars monthly are finding themselves barely surviving. Many are depressed over these dwindling finances. Others are astonished at their influence in the global economy and call it “overwhelming.” Writer: Lea Wiviott
Article originally published in Xpress Magazine in 2009.
They call him only days in advance, around three times weekly, to request that he work a four-hour shift. Tonight he’s working graveyard: 8 p.m. until 4 a.m. He’ll do “anything really,” he says, just to make rent.
But sitting in his red Angels cap, dark gray Fyasko jacket, and matching Vans sneakers, the San Francisco State graphic design student doesn’t look like someone who is $14,000 in debt.
It was not only overspending that caused a dire financial situation for Bobby Adams, who requested his name be confidential for fear of losing his job at Apple (even before having his hours cut from twenty a week to just nine due to slumping national sales) that forced him into the red.
And now, against, his better judgement, he is using credit cards more than ever to buy groceries and gas, something he believes is unavoidable.
“When I left, they just told me ‘you are on your own,” the twenty-three-year-old recalled his parents saying only six months earlier, implying he would never again reside at his Brea home. “They want me to grow up, I guess.”
But this maturation process, statistics show, can impede academics. According to the U.S. Department of Education, while 46% of the nations full-time students work, along with 81 percent of part-time students, financial pressure is still the main reason that 50 percent fail to earn a bachelor’s degree. And it could be worse. If Adams get laid off, his status as a college student voids his unemployment compensation eligibility.
That may be why 7.8 million underemployed Americans keep swiping, a population 3.1 million less than before the start of the recession.
What keeps Adams hopeful is designing business cards for free, looking to secure recognition in the field for future earning power. He has even sold his “most prized possession” – a 2008 MacBook Pro that he bought on credit, and that remains necessary for school and work, “just to make rent.”
But before blaming the recession for students in trouble, experts say, consider what students “need” to swipe. “When you go out onto the main street, all the cars are the newst ones, and these are the students’ cars,” SF State finance professor Deniz Kebaci says, “and they are also probably eating out all the time, and not paying attention to what they actually need. But the institutions are also responsible for making borrowing money so easy.”
To Adams, it’s a matter of unfair economics.
As a media technician at Rio Vista Elementary School and Brea Linda Daycare, he was making $1,700 monthly, and had saved up $3,000. Then, out of nowhere, he says, Schwarzenegger cut education spending, leaving him jobless.
Recently, Adams has noticed that state policies continue to affect his dwindling finances. “Sometimes I just get depressed,” he admits. “So I try to take a positive approach, and I’m in school, but being in debt and with our economy and how we got into this situation… it’s just overwhelming.”
“It’s definitely hard,” Adams says with watery eyes, “but what are you going to do?”
On a cloudy Friday afternoon in December, she sits on a bench in front of SF State’s Café Rosso, waiting for class to start. She’s enrolled in three classes, thanks to the budget cuts. But she takes it with a smile, and comments that at least it leaves her more time for work. Still, as an eighth-year student that seems like a tough demand-even at a school where it takes, on average, seven years to graduate.
Considering she also has outstanding credit card balances and thousands of dollars of school debt, and was laid off on January 19 due to slumping sales after two and a half years as a makeup artist at Neiman Marcus, Cindy Ha is feeling the recession. Unlike many others, however, this twenty-seven-year-old is not discouraged by it.
“You know what?” she says. “When it happened I wasn’t surprised. I wasn’t happy but I wasn’t upset, almost like, okay time to move on, now what?”
Ha’s question carries weight for most of the 4.1 million people laid off in a recession with most industries affected. Not only does that follow the largest thirteen-month job loss since Payroll Employment Series began in 1939, but it also brings the national unemployment rate to 8.1 percent of the workforce-12.5 million people, according to the Labor Department. (Statistics on student layoffs were unavailable.)
And nearly 15 percent of those looking for work – 1.8 million people, are in California, making joblessness here worse than in other parts of the country – 10.1 percent, according to the State Employment Development Department. In reality, experts say that number potentially approaches 20 to 25 percent when factoring in underemployment, matching the unemployment rate of the Great Depression.
But for Ha, the sky is the limit. She plans on starting a company to earn more money for the color matching and makeup organization work she gets from Craigslist, along with obtaining her journalism degree. And, as she told friends when they called her after her layoff, Ha happily anticipates more time for past activities like going to the museum and sewing.
“It’s really scary, but if I have to stretch five dollars for a week, then I’ll eat spam and eggs for that entire week just to get by,” she says with a laugh. “And that’s just fine.”
As a beer pong junkie, fraternity president, and business major, Gabe Torres may seem like an odd fit for a business that some say caused the recession. But don’t let his laid-back personality and collared shirts, which he is proud to never pay over $30 for, fool you. Only two years ago, he earned anywhere from $8,000 to $15,000 monthly.
In charge of starting up a Los Angeles branch of S.R.I. Mortgage, and then managing his staff of fifteen junior loan officers, all of whom were his fraternity brothers at Cal Poly Pomona, where he was finishing up his bachelor’s degree in business, Torres was pulling in half of the $50,000 his office brought in monthly – and loving it.
“I was young and the money was so good that initially I fell for it,” he recalls. “But when the houses were appreciating, and the same clients called me only a year later to refinance to spend their new equity, I realized something was not right. The operation was just not sustainable. Not just mine, but the idea of liquefying assets on the idea that your home will appreciate, or at least maintain its value. And what happened, the entire system folded, and a lot of people, like me, lost everything.”
The burden Torres’ words convey is heavy. In January 2008, as home values decreased, borrowers began going into default and creditors like Countrywide, to whom Gabe alleges he sold 90 percent of their loans, stopped lending, culminating in a bankruptcy that forced his La Verne home office operation into non existence. In his bedroom, only a few feet down the hall from the former office, Torres then slipped into a three-month depression as nationwide student and other funding dried up.
The economy continues falling apart just as Torres realizes his influential relationship with it.
The country is in a $12 trillion deficit, $455 billion from last year alone. With a $42 billion deficit, California is in crisis too, freezing construction jobs (such as the SF State library) and cutting education funding. The state took $33 million back from SF State over the summer, and attempted to take another $66.3 million in December, 2008. Some are saying economics are taking us into another depression.
Citing the academically qualified Financial Reserve, Professor Kebaci says we must increase efficiencies, create less risky industry, and regulate more, while learning from these mistakes to find new ways to let capitalism work.
But for tomorrow’s leaders, many of who can barely survive financially, time may be running out.
“It’s definitely hard,” Adams says with watery eyes, “but what are you going to do?”
Lea studies magazines and political science. Outside class she loves designing interiors, talking with people, reading and writing articles that better society, and watching documentaries after visiting beaches with her boyfriend.