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.
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.
“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.