There’s the life David and Tanya Gordon expected to have before the recession and the one they have now.
David, 33, can still recite the plans they made five years ago, when they made nearly $100,000 a year: “We’re going to both drive Cadillacs and have a big nice house, and you can stay home while I work, because I’ll be making so much money at the Internet company.”
Fast forward to now: David, laid off from his sales job in late 2008, is home with the Atlanta couple’s 15-month-old twins. Tanya is the primary breadwinner. They live in a two-bedroom, one-bath, ramshackle home they bought in foreclosure with David’s severance check.
That’s how it goes, limping along in the aftermath of the worst recession since the 1930s. Expectations have been transformed for tens of millions of Americans — plans abandoned, hopes dimmed and choices narrowed, sometimes to the vanishing point.
Everyone knew the pain was wide and deep. Last week, the Federal Reserve told Americans how wide and how deep: Between 2007 and 2010, the American family’s median net worth plunged 38.8 percent, mostly because home values cratered. Nearly two decades of accumulated prosperity were wiped out, the Fed reported.
In some ways, the impact was worse where there had been faster growth before: here in the South.
The Fed’s statistics are not a surprise — yet they are, said Tim Mescon, president of Columbus State University.
Knowing things are bad is not the same as having data that quantify the agony, said Mescon, who’s trained in both economics and sociology. “I think the numbers rock you a little.”
Still, recessions come and go, and Americans have bounced back — until now.
Deborah Thorne’s family lost a house to foreclosure in the early 1980s and, a few years later, owned another.
“I don’t want to romanticize the past — it wasn’t perfect — but there was a sense of security, and that is gone,” said Thorne, a sociologist at Ohio University and an expert on bankruptcy and consumerism.
“We felt that if we played by the rules, that we would do all right. Now there is a feeling that you are never on solid ground, even if you do the right thing.”
Thus the biggest loss may go beyond the decline in the American family’s assets, she said: trust.
“Despite our most honest efforts, through all of our lifetimes, we worked our jobs, we played by the rules, and we still lost. That fosters fear and mistrust in the system.”
Harder for the older
Not to mention a kind of numbed-out bewilderment that wavers between acceptance and despair.
“There is no coherent plan for anything more than a month from now,” said Jamie Womack, 50, who lives in Martin, northeast of Atlanta. “I have no future plans, I have no idea what I’ll be doing six months from now, much less a year, five years or 10 years down the road.”
The plans of Womack’s family had been in the works for three decades: Jamie, his father and brother would each build a home on family land. He realized his portion of that dream when he and his wife built a home there in 2006.
Since then, his web design and computer repair business all but dried up, and they have fallen behind on payments. Now, his income is zero. His wife, Debra, works, but it’s not enough. Their home is at risk.
The pain is especially deep for older workers like Womack, said Mark Cole, chief operating officer of CredAbility, an Atlanta-based credit counseling agency.
As the downturn accelerated, the organization saw a wave of older and often more affluent workers who were unexpectedly coping with the shock of long-term joblessness and mounting debt, he said.
“A lot of plans they had are not going to materialize, and they do not have time to recover. They are thinking, ‘I am not 15 years from retirement — I am not going to retire.’”
Natalie Hill moved to Georgia last year, leaving her job at Head Start in Philadelphia to be with the man she is engaged to marry. Nearly a year later, she’s applied in vain to schools and daycare centers.
“I even applied to McDonald’s and Burger King,” said Hill, 49, who lives in Lithonia. “At this stage in the game, I’d do anything.”
Her fiancé, a courier, is supporting her, but she wants to find a job that provides benefits and more security. The recession wiped out what retirement savings she had, she said. “I’m thinking, what can I give my daughters and grandkids? Nothing.”
House an ‘albatross’
The implosion of housing values — which has continued since the period studied by the Fed, especially in metro Atlanta — has not only savaged Americans’ net worth, it also limits their ability to rebound.
With their homes “underwater” — worth less than what’s owed on the mortgage — millions of job seekers can’t pick up and move to where jobs might be available.
For a time, Cedrick Davis seemed to be sailing through the recession. Sure, his retirement savings took a hit as the Dow plummeted, but he had a steady paycheck from the accounting firm where he started working 15 years ago.
But recently, Davis lost his job and is now among roughly 230,000 people in metro Atlanta who are searching for work. He’s willing to move, he said, but there’s one significant drag: his house.
“That’s an albatross around my neck, because I can’t [afford to] sell my house for what it is worth now,” said Davis, who lives in unincorporated DeKalb County. Home prices in his 30316 ZIP code near Decatur dropped 55.5 percent between 2007 and 2011, according to the AJC’s latest analysis of metro Atlanta home sales.
Compared with Americans who endured the Great Depression, working people now might seem lucky. There is a safety net: unemployment benefits, Social Security and food stamps, Medicare and Medicaid, none of which will completely replace a decent income. Workers can fall a long way before they hit that net.
Pockets of hope
Yet the drop is farther for some than others, and there is kindness even among the fallen.
Mark Basso of Alpharetta is as frustrated as anyone. Basso, 55, had prepared for a possible layoff, saving as much as he could and making more than a year of mortgage payments in advance. But he didn’t count on being jobless for so long.
Now, he hasn’t had full-time work since early 2011. As he fires off résumés and slogs hopefully to another job interview, he considers whether he could take a position out of town, knowing how far his home’s value has dropped.
“I could try to sell it for whatever I can get,” he said. “Or I can walk away.”
But recently he met a woman who had been out of work for more than three years. Her daughter was headed out of town for school, but the woman had little to send along with her.
“So I gave her some kitchen stuff and some linens,” Basso said. “I had more than I needed.”
Thus, even among the chorus of lamentations, an occasional grace note.
Though David and Tanya Gordon grew up during a period of surging growth, in a culture that urged them to borrow, spend, consume and dream big, they had no debt when the recession hit.
As it deepened and David’s job search foundered, he took out student loans and enrolled at Kennesaw State. When Tanya got pregnant with the twins, they had his retirement savings to help cover the medical costs.
That nest egg is gone, and they’re in debt, but David says he sees the student loans as an investment that should pay off someday, albeit in a job as a teacher, with a smaller salary than a high-octane salesman.
“I feel like this opportunity to go back to school, while it’s putting us in a pretty tight financial situation now, in the long-run will put us in a better situation,” he said. “I feel like this has almost been a good thing.”
