Doesn’t it feel like the good times are back? The stock market is setting records. Job growth is picking up, and you may have even received a pay raise in the past couple of months.
Many of us are certainly better off than we were just two or three years ago. Then, metro Atlanta unemployment exceeded 9 percent, foreclosure rates were among the highest in the nation, and housing construction was nonexistent.
We’ve recovered from the worst part of The Great Recession, but don’t be fooled. The average household in metro Atlanta and throughout Georgia continues the daily battle to make ends meet. Progress has been slow; according to our quarterly CredAbility Consumer Distress Index, people remain in financial distress.
A prime example is Jackie “Jewel” Brown. In 2005, Brown bought a house in Duluth and five years ago opened “Hair by Jewel,” a hair salon in Norcross. Brown was making her house and business rent payments for years, but recently ran into trouble.
Her 2000 Mitsubishi fell apart, forcing her to get another car and a new monthly payment. Some clients lost jobs and moved out of state, so she cut prices at the salon. But she’s fallen behind on her mortgage payments, so Brown is working now with CredAbility to try to qualify for the federal government’s Home Affordable Mortgage Program. This will give her a lower monthly payment and avoid the threat of foreclosure.
Households across the state saved only 2 percent of their incomes in 2013’s first quarter, largely due to the increase in Social Security taxes. As usual, low- and moderate-income families have been hurt more than most. Roughly 915,000 Georgia households, or about 20 percent of the state, receive food stamps, a 5.5 percent rise from a year ago.
Still, there’s no doubt that there are signs for optimism. The unemployment rate and the number of households behind on their mortgage payments continue to nudge down each month. The credit profile of Georgians is stronger than it’s been in years, meaning more people are paying their bills on time. And the net worth of the average metro Atlanta family is at its highest point since 2008.
But I’m concerned about the future for several reasons. Many people we counsel have jobs, but they earn less money compared to the job they held before they were laid off. Many are 50 years old and older; they just want to pay their bills and hang on until they can qualify for Social Security and Medicare. These families have little savings, which means it’s unlikely that they will be able to afford to retire.
Experts predict metro Atlanta will add 40,000 new jobs this year. Let’s hope these new jobs will help those most in need, and that we can lift the average household out of financial distress sooner rather than later.
Phil Baldwin is president and CEO of CredAbility.
