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From Riches to Rags in the O.C.

Former six-figure professionals now line up at food pantries next to underemployed day laborers.

EDITOR’S NOTE: This is the second in a three-part series on poverty in Orange County, particularly in the areas covered by our network of Patch websites. To read Part 1, .

SAN CLEMENTE, CA -- The beginning of the end was evident in 2008, but the family held onto its business and South Orange County lifestyle until early 2010.

“Ironically, 2007 was our best year,” said Mary Jones, who asked to use an alias to protect the identity of her family and the business in which they were part owners, a chain of Southern California electronics stores that failed and shuttered two years ago.

Until the recession, the Joneses led a very comfortable life. They had a 4,000-square-foot home "behind the gates" in San Juan Capistrano, drove Escalades and BMWs, vacationed several times a year in the Bahamas and sent their children to private school.

“I wouldn’t say we lived over-the-top,” Jones said. But the family didn’t worry too much, either.

Now, they lease a house in Ladera Ranch after losing their San Juan home. They have sold their vehicles and Jones’ husband is trying to reinvent himself in his 50s.

“I was crushed," she said. "I thought my whole world was coming to an end." But there was a silver lining. "Now, we’ve never been closer, I feel. We’re forged in steel. We have exactly what we need.”

The “New Poor” and the Decline of the Middle Class

The stories and circumstances vary, but new poverty has become a secret part of life in Orange County and in other affluent communities across the country. Figures released last year by the US Census Bureau suggest that the recession accelerated the downfall of the already dwindling middle class. Since 2007, the year before the recession, median household income has dropped 6.4 percent. Last year it was 7.1 percent below the median household income peak that took place in 1999. The median household income was $49,445 in 2010, a 2.3 percent decline from 2009.

“A lot of the people who live in their cars and motels are full-time working people.”

Although the recession officially ended three years ago and economic indicators suggest the national economy may be on an upswing, Orange County continues to be plagued by foreclosures, business closings, underwater homes and homelessness. Rich and poor have both suffered, even in the affluent neighborhoods south of Irvine.

According to social service workers, the phenomenon of the "new poor" in Orange County is illustrated by a scenario that has played out repeatedly at local agencies: Upper- and middle-class donors to charitable organizations return to seek assistance from those very charities.

Some deal with the transition gracefully, but others find it difficult to swallow the reversal of fortune. For example, during a 2011 giveaway at Lake Forest’s South County Outreach, a former donor to the food pantry demanded her family get more backpacks for her children to use for school than other clients waiting patiently in line. Irate, she stormed off after telling volunteers that her support for the food pantry in flusher days meant her family deserved the additional items.

In Orange County, a land obsessed with appearances, the look of wealth can be deceiving.

"For all appearances, [the new poor] look to be doing OK still,” said Dave Davis, former head of Mercy House, a food warehouse in Laguna Niguel. “They may be wearing the designer clothes from two years ago, but the bottom line is these guys do not have enough money to buy groceries to feed their kids. It takes a great big chunk of humble pie to be swallowed to come in and say, 'I need that.'"

Indeed, O.C. residents living south of Irvine, the richest per-capita part of the county, account for nearly half of the growing demand for food stamps and other assistance countywide, according to TerryLynn Fisher of Orange County Social Services. She says 5.72 percent of the Orange County population is receiving some kind of assistance.

After the financial crisis of October 2008, the regional Social Services Agency office in Aliso Viejo reported a 175 percent increase in the number of applications for assistance.

Countywide, requests for assistance, including Medi-Cal, CalFresh food stamps and CalWORKs welfare payments, have continued to rise in the last few years, Fisher said. Also on the increase are requests for general relief -- loans and other assistance for people who don’t qualify for other aid, Fisher said.

From fiscal year 2006-07 to 2010-11, OC Social Services experienced a 27 percent increase in Medi-Cal applications, a 51 percent increase in CalWORKs applications, a 126 percent increase in food stamp applications and a 152 percent increase in general relief applications.

The "Old Poor" Also Suffer

Although it is a much shorter and perhaps less dramatic fall for those who were already living hand-to-mouth, the descent into official poverty still hurts.

According to the U.S. Census Bureau, 46.2 million people were living in poverty in 2010—the highest number in the 52 years poverty estimates have been published. Since 2007, the poverty rate has increased by 2.6 percent.The official poverty rate in 2010 was 15.1 percent—up from 14.3 percent in 2009, in the third consecutive annual increase in the poverty rate.

Sometimes, those who began the recession closer to the poverty line find themselves facing homelessness. Although the national homeless rate fell by 1 percent during 2009 and 2010, a January 2012 survey report published by the National Alliance to End Homelessness predicts that the rate of homelessness will go up after a federal homelessness prevention and re-housing program funded by the 2009 stimulus bill expires on June 30, 2012. With millions of people still jobless and not pulling in enough money to cover basic living expenses, some homeowners and renters are teetering on the edge of homelessness.

“It takes a while for people to become homeless," Nan Roman, president and CEO of the Washington, D.C.-based nonprofit National Alliance to End Homelessness, told The Huffington Post in January. "They don't enter the shelter right away."

To avoid the streets, many bunk with relatives, according to Norah Dopudja, director of South County Outreach in Lake Forest. In other cases, young families move back in with parents and seniors move in with grown children.

But according to the report from the National Alliance to End Homelessness, people in this situation may not be as safe as they seem. A person who is living “doubled up” (staying with friends or family for financial reasons ) has a 1 in 12 chance of becoming homeless within a year. The number of people living doubled up jumped 13 percent from 2009 to 2010, which could lead to a spike in homelessness, according to the report.

For those who don’t even have such options, any living space—no matter how unpleasant—may suffice to keep their families from homelessness.

One South County Outreach client recently returned with good news, Dopudja said. The woman, who had been living in a garden shed, scraped together enough money in early 2012 to rent a room in a home. Since her relocation, Dopudja said, the woman’s health and confidence have improved, bringing color to her face, a few additional pounds to her frame and a spring to her step.

Initially, many visitors to South County Outreach think they will be infrequent guests of the food pantry.

“I just need help for a little while or just this month,” is the attitude, according to Dopudja. However, “after a few months, a depression kind of sets in” that can make the battle toward finding a steady income even more difficult.

Immigrant Laborers

Groups traditionally on the lower end of the economic scale in Orange County are also faring worse.

Several day laborers who waited for work outside San Clemente’s El Camino Real Rite Aid in late December talked about how difficult it had become to find jobs. (They gave only their first names.)

Rafael said he was laid off from a shipping facility in San Juan Capistrano a year ago, after the company’s management decided to move the operation out of state.

He and another laid-off worker now do drywall, framing, masonry, general construction, landscaping and sometimes moving, usually for about $10 to $12 per hour—if they can find work.

Although national employment rates are improving for immigrants, they are still less employed than their U.S. born counterparts. The unemployment rate for the foreign born (those who were born outside the country but now reside in the United States) was 9.1 percent in 2011, down from 9.8 percent in 2010, while the jobless rate of those born in the United States was 8.9 percent in 2011, compared with 9.6 percent in the year before, the U.S. Bureau of Labor Statistics reported on May 24.

Rafael said he’s lucky to find anything that lasts more than a day or two. The homeowners he used to work for aren’t improving their houses; they’re either foreclosed or underwater.

“Before the economy went down, there was a lot of jobs; everyone wanted you to work,” he said.

Ferruzca, a laborer who has another job at Walmart, said there are many challenges to working as a laborer-for-hire. Many of the men are forced to bring their children along to wait for work because of the high cost of childcare, and there is little recourse if a boss wants to refuse payment.

The Homeless

“We continue to see an increase in the number of people asking for help,” said Family Assistance Ministries Director Mary Gray-Perdue. “We really want to get people in the system, because they say they just need food,” but they really need a whole host of other services, like rent assistance, medical care or utility payments.

South County Outreach's food pantry served more than 60,000 people in 2009 and then again in 2010.

“When they come in for food, they get so many other resources,” said Dopudja. “There are a lot of resources, but people don’t want to ask for help. We’re willing to share that with them.”

Among those resources are budget planning, computer classes and local job listings, Dopudja said.

Gray-Perdue said the number of homeless people in South Orange County is hard to pin down. But there are 3,000 homeless children registered in the Capistrano Unified School District alone.

According to federal education law, students are considered homeless if they live in a shelter, a motel, an apartment with more than one family because of economic hardship, an abandoned building, car, street or campground, temporary foster care, housing without utilities or with friends or family as an unaccompanied runaway youth.

As of January, Family Assistance Ministries had put up 46 families in local motels, giving them at least temporary housing.

“A lot of the people who live in their cars and motels are full-time working people,” Gray-Perdue said.

Demand for food from FAM has been growing in concert with other food banks in South Orange County. In 2010, FAM distributed $1.8 million worth of food. That swelled to $2.1 million in 2011. Of the roughly 2,000 people FAM feeds each month, 46 percent are children, Gray-Perdue said.

At South County Outreach, a transitional housing program has proved effective in helping clients avoid homelessness.

The organization operates 17 separate condos where families facing homelessness live as part of a program to get them back on their feet.

Under the program, families attend classes on budgeting and life skills, and can get credit counseling and talk to an attorney. In six to nine months, they are expected to have saved enough money to move into permanent housing.

According to SCO’s Dopudja, the program has about a 90 percent success rate in placing families into stable housing situations.

Orange County is expensive, but if you’re not trying to keep up with the Joneses, you can make it, she said. For some families hit hard by the recession, “it’s a paradigm shift,” but program staffers help clients through the switch, Dopudja said.

You can find more articles from this ongoing series, “Dispatches: The Changing American Dream” from across the country at The Huffington Post.

Charles May 30, 2012 at 02:42 PM
As bad as the economy is here in OC, it is a lot worse in other parts of California. Orange County unemployment numbers are still relatively low (Las Flores, for example, has less than 4% unemployment). And yes, fortunes turn and people can be doing fine one day and in deep trouble the next. In most cases, the education or skills or hard work that got them a job or good life in the first place can help them recover later. Stories like these just reinforce the good advice to plan for a rainy day: don't ever have a credit card balance, save for retirement, own practical cars for a long time, mow your own lawn, subscribe only to the cell phone services you really need (and monitoring Facebook isn't a "need"), etc.
Joker Joe May 30, 2012 at 02:55 PM
Must of really hurt to give up 4,000 ft. of living space and the BMW! But the Escalade and private school did not help also and to top it off the vacation in the Bahamas must of been the worst. I feel so sorry for these people. not
Joker Joe May 30, 2012 at 03:01 PM
I noticed the food shelf has soda on it. Too much sugar in it and it will make you obese. Obama does not want you drinking it as well as eating hamburgers. Plz, plz consider your choices. Stay with the oatmeal......
Doug Pemberton May 30, 2012 at 03:39 PM
To follow up on what Charles said. Yes the economy isn't the greatest and Yes, people have gone from Riches to Rags. However the absolute great thing about being in these United States as well as Orange County, we all can rebuild and create prosperity after big losses. You do not have these same options in other parts of the world. Poor people from other countries try everything to get here for the opportunities to earn a living and/or create a business based around what they find of interest. Whilst many of us (including myself) have had major losses and are basically living at the poverty level, we know that we learn from these trials and tribulations and that they only make us better, stronger as well as more prosperous while living within our means. Always move forward Doug Pemberton
Adam Townsend May 30, 2012 at 04:09 PM
Other parts of the country are in worse shape. Until 2006, I was the business reporter in the Ohio Valley town of Wheeling, W. Va. There, foreign and out-of-state interests were systematically purchasing all the steel mills and coke plants (coke is specially-processed coal needed to make steel) and shutting them down. These plants, which operate all up and down the Ohio River, were laying off 8,000 people at a time. Devastating to cities with 20,000 to 40,000 in population. And this is stuff the Valley has been dealing with for the last 25 years. Despite all OC's problems, I'm sure its tourism resources, real estate value and corporate headquarters here will help it rebound faster than places like the Ohio Valley.
george gregory May 30, 2012 at 06:27 PM
good advice Charles be frugal get the big cooking pot out and freeze some left over's income may not be there tomorrow as far as tourist income goes Adam,, I prefer aero space especially when I note how well Greeks and Mexico's tourist based economies are doing bring back areo space jobs thats what Southern CAIFORNIA is famious for
Allison Belles May 30, 2012 at 06:30 PM
There are millions of Americans across our country that suffer each and every day. The young, the old, the new, the existing. Feeding Children Everywhere is an organization that empowers and mobilizes people to assemble healthy meals for hungry children, here at home and across the globe. FCE can package, ship and deliver meals to local Orange County Food Banks for just one quarter per meal. It would be amazing to rally together the O.C. to help those in need. Check out www.feedingchildreneverywhere.com and see how together, we can make sure these families are receiving healthy meals and a little bit of hope for the future. Warmly, Allison Belles allisonb@feedingchildreneverywhere.com
Joker Joe May 30, 2012 at 06:38 PM
Damn Allison You have me crying in my soup. Stop foreign aid money going to countries that hate us. The money is kept by the politicians of those countries anyway. The hungry populace does not see it. Then try taking care of our own people.
Panglonymous May 30, 2012 at 08:06 PM
Bo Bo is cornering the market on hard cheese. (If you're desperate enough, call him. It'll be off the hook.)
MFriedrich May 30, 2012 at 08:59 PM
Foreign aid money? Great idea. http://www.census.gov/compendia/statab/cats/foreign_commerce_aid/foreign_aid.html Egypt $1.2 billion in 2012. Pakistan $1.5 billion in 2012. Iraq $2.9 billion. For some reason Israel accepted $2.7 billion from the US this year. Their country is 64 years old this year and still can't stand on its own two feet apparently. On that kind of money, you could give every poor American child and family 3 square meals per day. Except at that value, it would probably be all Filet Mignon, Crepes Suzette and bottles of Chateau LaFit. All describe US foreign "Aid" should be substituted with the word "Trade".
Benny May 30, 2012 at 09:56 PM
The OC is an interesting place. We seem to go boom and bust on real estate in 20 year cycles - the consequence of which is over and under employment to support it. It would seem that with the great diversity of culture and talent we have here, we should be leading the nation in entrepreneurship and high quality corporate jobs. And we do get some of that - but the regulatory and tax environment pushes many of those opportunities away from here. My hats off to any small business guy making in the OC in this economy - keep the faith. When was the last time a big business moved their HQ to the OC?
Panglonymous May 31, 2012 at 12:29 AM
Written by a McGirr, so it must be true... ;-) The New Suburban Poverty "...The conceit that poverty is a problem suffered by other - often less deserving - people was an essential part of suburban self-identity that was reflected in its politics. Better-heeled suburban schools, sports teams and private recreation contributed to an ethos that emphasized family residential security, individual meritocracy and private life. Its inhabitants conveniently forgot that their cherished neighborhoods were in fact dependent on the programs of the New Deal state, not to mention the federal residential security maps that privileged white Americans...." http://campaignstops.blogs.nytimes.com/2012/03/19/the-new-suburban-poverty/
Joker Joe May 31, 2012 at 04:00 PM
Pakistan has the man that helped us get Bin Laden in jail for 30 yrs. It was in retaliation for not notifying them about the Bin Laden kill. Cut the 1.5 billion off. That simple. When he is released then give them that money plus more. Forget the masses of poor and hungry on our shores.
Joker Joe May 31, 2012 at 04:10 PM
Had to use that money up, didn't we?? A True Story of Graft You can't make this stuff up. Read the NY Times Oct 13, 2011 to verify ownership. Do you know the park in NYC that the Wall Street protesters occupied? It's Zuccotti Park . Did you know this park is NOT owned by the city of New York ? It's owned by Brookfield Properties. Brookfield Asset Management received an Obama Department of Energy Loan guarantee of over $160 million within 10 days of approving the take over of the Park. Brookfield is a Canadian company with assets of 70 billion. Google it It's all on their website - and WHY is the US Taxpayer guaranteeing a loan to a VERY wealthy Canadian company?!?! Who was just hired by Brookfield Properties as an attorney? Vice President Joe Biden's son. Who sits on the board of Brookfield Properties? NYC Mayor Bloomberg's live in girlfriend. Now, guess what company just received some of the last of the Obama Stimulus $$$$$$$. Thaaaaaaaaaaaat's right, Brookfield Properties. (a Canadian Corp) Isn't life great in America ! Now, guess what, on a completely unrelated note? Wisconsin is shaping up to be the swing state in the 2012 presidential elections. Not Florida . Not Ohio . But Wisconsin . Now, guess who owns the company that will be tabulating all the electronic votes in Wisconsin . Thaaaaaaaaaaaat's right, the biggest contributor to Obama, the puppeteer George Soros. Whaaaaaaaaaaaat a coincidence!
Joker Joe May 31, 2012 at 05:18 PM
Want a job?? Even as hundreds of thousands of California workers are struggling to find a job, Congress has continued to issue 125,000 new work visas a month to immigrants and other foreign workers. This equals 1.5 million new foreign workers each year, who compete directly with California residents for a very limited number of California's jobs. Who benefits from allowing 1.5 million new foreign workers into the U.S. each year? Certainly not the 2,019,000 residents of California who are currently unemployed. Unfortunately, Sens. Feinstein and Boxer have done nothing to reduce the number of foreign workers to the U.S. And as a result, unemployed California workers continue to suffer. VOTE OUT THE PEOPLE THAT DO NOT HELP OC'S IMPOVERISHED POOR.
Joker Joe May 31, 2012 at 05:58 PM
Any comment on this??? Green Bay - If your name has finally come up on the waiting list for Green Bay Packers season tickets, they will cost more this year. Lambeau Field's landlord, the Stadium District Board, has raised the seat license fee for new ticket holders. The "green" package of seven games goes up $700 to $2,100. The "gold," or three-game, package will go up $300 to $900.
Joker Joe May 31, 2012 at 06:30 PM
Here is where the countries money goes. Let's set some of this aside for the poor and improvised The Secret Service issued new rules of conduct for their agents on Friday. They can no longer get drunk, procure hookers or go to strip bars. The rules say that from now on, if agents feel compelled to engage in such behavior, they can run for public office like everyone else.. I think that is fair! What do you think??

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