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Gas Prices Box in an Alabama Community •
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Workers Get Fewer Hours, Deepening the Downturn
By Peter S. Goodman
The New York Times
Friday 18 April 2008
Not long ago, overtime was a regular feature at the Ludowici Roof Tile factory
in eastern Ohio. Not anymore. With orders scarce and crates of unsold tiles
piling up across the yard, the company has slowed production and cut working
hours, sowing worry and thrift among its workers.
"We don't just hop in the car and go shopping or get something
to eat," said Kim Baker, whose take-home pay at the plant has recently
dropped to $450 a week, from more than $600. "You've got to watch
everything. If we go to town now, it's for a reason."
Throughout the country, businesses grappling with declining fortunes are cutting
hours for those on their payrolls. Self-employed people are suffering a drop
in demand for their services, like music lessons, catering and management consulting.
Growing numbers of people are settling for part-time work out of a failure to
secure a full-time position.
The gradual erosion of the paycheck has become a stealth force driving the
American economic downturn. Most of the attention has focused on the loss of
jobs and the risk of layoffs. But the less-noticeable shrinking of hours and
pay for millions of workers around the country appears to be a bigger contributor
to the decline, which has already spread from housing and finance to other important
areas of the economy.
While official unemployment has risen only modestly, to 5.1 percent, the reduction
of wages and working hours for those still employed has become a primary cause
of distress, pushing many more Americans into a downward spiral, economists
say.
Moreover, this slippage is a critical indicator that the nation may well be
on the verge of a recession, if not already in one.
Last month, the hours worked by those on American payrolls dropped, compared
with six months earlier, according to an index maintained by the Labor Department.
The last time the index moved into negative territory was February 2001, when
the economy was on the doorstep of recession. A similar slide emerged in August
1990, one month into what proved an even more severe downturn.
From March 2007 to March of this year, the average workweek reported in the
private sector slipped slightly to 33.8 hours, from 33.9 hours, while overtime
for manufacturing workers fell by a larger margin.
At the end of last month, more than 4.9 million people were working part time
either because they could not find full-time jobs or because their companies
had cut hours in the face of slack business, according to a Labor Department
survey. That represented an increase of 400,000 since November.
And on Wednesday, the government reported that average earnings slipped in
March after accounting for the rising costs of food and fuel - the sixth
consecutive month that pay failed to keep pace with inflation.
As people bring home paychecks that do not go as far, they are forced to economize,
eliminating demand for goods and services that once captured their dollars,
spreading pain to providers like auto dealers and lawn care providers. They,
too, must trim their outlays on pay, shrinking working hours more and furthering
the slowdown
"It means spending slows going forward," said Robert Barbera, chief
economist at the trading and research firm ITG.
Paychecks are diminishing just as millions of Americans are finding their access
to credit constricted as well. Borrowing against the value of real estate -
a crucial artery of household finance in recent years - has been pared
back as home prices have plummeted and as banks have tightened lending standards
in the aftermath of the collapse of the housing bubble.
"At this point, those avenues are blocked," said Jared Bernstein,
senior economist at the labor-oriented Economic Policy Institute in Washington.
"Consumption going forward is going to be in large part a good old-fashioned
function of paychecks and incomes."
Even before the rollback in working hours, pay was barely keeping up with the
rising costs of gas and food. From February to September of last year, the average
hourly earnings for workers in the private sector was still growing at a slightly
faster clip than the pace of inflation, according to the Labor Department. But
from November through March, as employers began to scale back in a variety of
ways, wage growth fell below the pace of inflation, meaning that paychecks were
effectively shrinking.
Now, work opportunities are themselves declining, as the downturn snuffs out
business.
In the suburbs of Denver, Max Garcia was netting as much as $2,000 a month
last year as a self-employed computer repairman, he said. As recently as November,
he was still receiving three and four calls for help a week. But since early
February, calls have dropped to one a week or fewer, he said.
"Everybody's getting tighter," he said - himself included.
With his income cut in half, Mr. Garcia, a single father, no longer takes his
two young daughters out for fast food, he said. For clothing, he now goes to
secondhand stores instead of the mall. For amusement, he visits the park instead
of the museum.
"We spend more time at home," Mr. Garcia said. "We don't
drive anywhere we don't have to."
In Los Angeles, William Righi, a musician, bemoans the sudden difficulty of
getting jazz and blues gigs at restaurants and parties. He gives fewer private
singing lessons to high school students.
"Their parents don't want to pay," Mr. Righi sighed. "They
don't have the money to burn. In the last month, it's really dropped
off."
With his income down, Mr. Righi has been putting off buying new musical instruments
and sheet music. He has curtailed his traveling.
At a factory in Lancaster, Pa., Armstrong World Industries, which makes flooring
products, cut production of vinyl sheets for two weeks in March in reaction
to softening demand for its goods, the company said.
Management is now seeking to slow production further, said Joe Rumberger, president
of the local branch of the United Steelworkers, which represents workers there.
Some of those sent home received temporary unemployment benefits, he said,
securing government checks of about $520 a week in lieu of paychecks that reached
$900.
"It hurts," he said. "If you're not working, unemployment
checks only go so far."
At many companies, management is hanging on to as many workers as it can, cutting
hours to try to limit layoffs, while hoping that business improves.
As the construction business deteriorated rapidly last fall, so did demand
for the ceramic tiles produced in New Lexington, Ohio, at the Ludowici factory.
In November, the company began drastically cutting overtime for many workers.
The following month it laid off several people. Last month, the factory resorted
to layoffs, cutting the hourly work force to 81, from 93. It idled the kiln
on weekends.
But even as sales fell, the company kept producing, building up stocks of tiles
that it assumed it could sell eventually.
"We thought that would be a smart way to do it in order to keep people
working," said Derek Thomas, the plant manager. "The philosophy
around here is we remain hopeful that things are going to pick up."
But if fresh orders do not arrive soon, Mr. Thomas acknowledged that his hopes
were likely to be dashed. In that case, he said, the company was facing further
"head count reductions."
With his overtime pay gone and faced with the ugly potential of a layoff from
the job he has known for 14 years, Mr. Baker, the plant worker, is streamlining
his spending every way he can.
This time of year, he would normally be planning a trip through Ohio in his
camper. But he does not expect to take to the road anytime soon. "Not
with the money flowing the way it is," he said, "and the price of
gas."
To John E. Silvia, chief economist for Wachovia, the banking company based
in Charlotte, N.C., Mr. Baker and his boss are representative of a national
economy that is hunkered down and awaiting better while worrying about worse.
"You've got a lot of people sitting around now," he said,
"waiting and hoping for orders."
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Gas Prices Box in an Alabama Community
By Richard Fausset
The Los Angeles Times
Friday 18 April 2008
Cars have connected Wilcox County with
the wider world, and with jobs. But now the drive doesn't pay off.
Coy, Alabama - The modest Japanese sedan made its way down the gravel
drive between the cow pasture and the dirt basketball court, kicking up a cloud
of dust before coming to rest beside Roy Saulsberry Jr.'s ancient gas pumps.
A passenger stepped out, clutching an old antifreeze jug. Outside Roy's Grocery
& Package store, the regulars were hemming and hawing on a wooden bench,
under the spell of the afternoon's slow rhythm.
Norman Finklea filled his jug just past a gallon, letting the analog meter
come to rest at $3.88. Then he walked into Roy's with his four crumpled bills
and a litany of anxieties, which were rising with the price of gas.
He didn't need to tell them to Saulsberry. As the proprietor of this little
country store in one of the poorest counties in Alabama, Saulsberry has already
heard them all. It doesn't matter what kind of cars pull up to pumps these days
- stretchy old hooptie sedans, scuffed econo-boxes, king-cab pickups - anxiety
is their common cargo.
With the high price of gas, Saulsberry said, "people just can't go as
much."
Finklea, a freelance construction worker, had paid a friend $5 to pick him
up at his house a few miles down the road and drive him here. His own car was
back at home with its pin on empty, he said. He needed it to drive to work in
the morning.
Finklea said high gas prices were the reason he paid only half his light bill
last month, the reason he and his wife were trying to get by with less food,
the reason he is turning down jobs that are more than 30 miles away.
Those jobs, he said, are not worth driving to anymore.
Cheap gas, and cars to put it in, have long given Americans the freedom to
roam. For the people of Coy - a largely African American community of about
900, two hours southwest of Montgomery - that freedom has been particularly
vital, delivering them out of rural isolation and into decent, if far-flung,
employment.
A generation ago, black laborers sharecropped cotton on white-owned land here.
Others worked in nearby sawmills. By the 1960s, the mills were thriving, but
small-scale farming was fading away, and the civil rights era had opened new
job possibilities.
Those jobs, however, tended to be spread around the state. The people of Coy
gassed up their cars and drove to them. They drove 13 miles on the two-lane
highway to Camden,the county seat, or they ventured farther afield, to the bigger
cities of Selma and Montgomery. They took manufacturing jobs and teaching jobs,
handyman gigs and government desk work.
Today, gas money and a functioning car are still vital for workers who wish
to leave this stretch of pastureland, low-slung houses and tumbledown trailers.
The only public transportation is a regional van service that mostly shuttles
the elderly to doctor's appointments. There are only a few local farmhand jobs.
Though drivers across the nation are smarting from the rising price of gas,
it is taking a particularly harsh toll here in Wilcox County, where the median
household income is $17,500. A recent report by the Oil Price Information Service
estimated that residents spend more than 13% of their monthly income on gas
- the highest ratio in the nation. (The study, which also took into account
local gas prices and commuting statistics, found that the average Los Angeles
County household spends 3.9% of its monthly income on gas.)
Roy's Grocery has long served as a sort of home base for commuters: a place
to buy a few gallons, get a six-pack of beer, catch up with friends. But the
price of gas - which was $3.51 per gallon at Roy's earlier this month - has
changed some things. Clarence Perryman, a retired construction worker, has been
a fixture for years at the store, watching his neighbors come and go.
"They used to pull up and say, 'Fill it up,' " he said. "Not
anymore."
It was an argument over gas money that prompted Saulsberry to build the grocery
in the first place, in the mid-1990s. A clerk at a now-defunct Coy convenience
store had accused him of failing to pay for a fill-up. She was a white woman.
He suspected it was a racial thing.
At the time, there were two stores in town - both with white owners. Saulsberry
recalled telling his father, Roy Saulsberry Sr.: "If I ever get able, I
will put up a store here in Coy. I don't care if I ever make money off it."
Soon after, the two men, who are partners in a contracting business, began
constructing a utilitarian cinder-block building with a metal roof. Today, the
outside is painted a creamy tapioca. Inside are a few shelves of snack foods,
a refrigerator with beer and soda, and candy and cigarettes behind a long counter.
Behind the register, a clerk can watch through a little window covered in burglar
bars as customers pull up to the old silver-and-white pumps. On the other side
of the building, the Saulsberrys have set up a spartan pool hall, with three
billiard tables and a boombox.
Father and son wanted it to be not just a store but an informal community center.
But to make it work, the younger Saulsberry figured, it was crucial to sell
gas. It was the product people needed most. It was the lure that would tempt
them to stop, and perhaps linger.
It took Saulsberry six months to find someone who would bring a little gas
out this far - a distributor from Mobile, 125 miles away. She eventually insisted
that he order a minimum of 4,000 gallons a month, which was much more than he
needed. These days, he hauls the gas himself from a neighboring county, making
the trip in a 1-ton truck with a tank in the back. He brings back about 300
gallons twice a week.
Saulsberry, 45, is a compact man, laconic and soft-spoken, with tired eyes
set in a genial face. He has one foot in the 21st century, with a cellphone
holster glued to his hip and a teenage son who will travel to Europe to study
this summer.
But the Old South is alive in his world, too. He is the grandson of sharecroppers;
a funeral program for his late mother hanging above the store counter notes
that her father's nickname was "Sambo." The lowing of cows in the
adjacent pasture occasionally penetrates the store's interior, where pickled
pigs' lips in pale pink brine await hungry customers.
Saulsberry has been trying for years to transform Coy from a place that people
have to leave into a place that gives them a reason to stay. He helped found
the little volunteer fire department and ran unsuccessfully for a county commission
seat in the late 1980s. These days, he's trying to find a $1,500 grant to pave
the dirt basketball court next to the store.
He'd be happiest if Coy could attract a decent-size manufacturing plant, so
people wouldn't have to travel so far to work. Until it does, he figures he
will keep hauling the gas from Thomasville, as a kind of public service.
His gas is more expensive than the gas over in Camden. Saulsberry says he has
to pay a higher wholesale price because he doesn't buy much; he also buys premium
gas, though he doesn't advertise that to his customers. "I just tell 'em
I got good gas," he said. "Cheaper isn't always better."
He pockets about 10 cents a gallon - just enough to pay the store's light
bill.
The store's faded wooden sign still bears the hand-painted price for a gallon
of unleaded from some distant time: $1.23 9/10. A cousin usually opens the place
in late morning. Most customers come in the evening, after their shifts, buying
their gas with cash, and a gallon or two at a time.
Sam Knight, 61, pulled up in a blue van and pumped $8 worth. Knight had a heart
attack last year; since then, he said, he has missed cardiologist appointments
because he can't afford to drive the 100 miles to Selma and back.
Spencer Byrd Jr., 47, tries to buy his gas at the stores in Camden, where it's
cheaper, but he visits Roy's from time to time. He said he used to run a lawn-care
service to supplement his job as a maintenance man at the post office. But gas
prices forced him to shut down the lawn business last fall.
William Coleman, 53, has been driving the 30 miles to and from his plywood
mill job for 17 years. To save on gas, he has recently taken to sleeping in
the boiler room between 12-hour shifts. Coleman usually stays overnight twice
a week, leaving his wife to deal with the two grandchildren they are raising.
"My biggest problem," he said, "is gas."
As the sun went down on a recent Wednesday, the regulars monopolized the wooden
bench, gossiping and talking politics. Perryman, the retiree, thumbed through
the local paper, with its back page used-car ad that screamed "GAS SAVERS."
Neighbors ambled across the basketball court in twos and threes, looking for
a snack. A man pulled up and filled the tank of an old motorbike that was missing
its gas cap. A woman drove up and filled half of a pickle jar.
Jamison Jones, 26, said he has been looking for a construction job since being
laid off six months ago. The good jobs, he said, are in Montgomery and Mobile.
Even if he got one of those jobs, he'd have to find someone to carpool with
- someone with the same job, the same shift, "same everything," he
said.
Of course, Jones could just move, like others who have left Wilcox County to
be closer to good jobs. Francis B. Dobson Jr., assistant director of the Alabama-Tombigbee
Regional Commission, a local planning agency, said those people may benefit
from a short commute, but they make their struggling home county that much poorer.
"When the best and the brightest leave your county," he said, "what
have you got left?"
Finklea, the man with the full jug of gasoline, doesn't plan on moving. He
grew up around here, and this summer he will pay off the mortgage on his double-wide
trailer. If the price of gas becomes intolerable, he said, he will find a way
to survive in Coy.
"I guess I'll get on food stamps," he said. "And kill me a couple
of deers and rabbits."
Finklea jumped in the waiting sedan, which soon disappeared up the road.
Saulsberry wandered outside of his store to the thrum of crickets and waited
for the next customer to come rolling up the drive.
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