Scenes From A Downturn

It’s one thing to point to a steady stream of disappointing data points and ski-slope-shaped trendlines and say this is not your father’s downturn.

However, it’s stories like those that follow, detailing just a fraction of the unfamiliar reactions and novel responses of individuals, families, business, charities, and governments to the worsening economic climate, which leave no room for doubt that things really are different this time:

“Lose Your Job, Keep Your Fridge Under New Sears Plan” (Dow Jones Newswires):

Sears Holdings Inc. (SHLD) is letting customers who lose their jobs keep their appliances in an effort to assist them, and itself, during the recession.

Customers who buy big ticket items like refrigerators and washing machines from June 6 to Aug. 1 and become unemployed after the purchase will have one twelfth of the price - including warrantee and service charges — taken care of by Sears each month. If the job loss lasts a year, Sears will write off the purchase.

The program is being run as a pilot for appliances costing $399 or more and, depending on how it goes, could see its time frame added to and possibly be extended to other products, said Kevin Brown, vice president and chief marketing officer for home appliances at Sears, in an interview with Dow Jones.

Sears came up with the program after hearing from customers that they needed the merchandise, had the money for it, but were afraid to commit because they were concerned about their jobs and the economy, Brown said. “This will allow them to move forward.”

The program covers customers who have lost their jobs from 60 days to one year after the purchase.

If the customers keep their jobs, Sears books the sale. Customer don’t get their money back if they paid in full for the products and they don’t have to make up any payments as long as they can show proof they don’t have a job.

The program comes as Sears has seen a falloff in large appliance sales that contributed to an 11.7% decline in same-store sales for its most recently reported quarter.

Sears calls the program the first of its kind by a national appliance retailer, and is adding its own twist to overtures made by major auto makers, although in Sears’ case customers can keep the products.

General Motors Corp. (GM), Ford Motor Co. (F) and Hyandai Motor Co. have all had programs that allow auto buyers to return their cars if their jobs are lost.

In March, apparel retailer Jos. A. Bank Clothiers Inc. (JOSB) offered to refund up to $199 of a suit’s price and allow customers to keep it if they are laid off through early summer.

Sears sees the program as a way of serving existing customers. “If we take care of them we believe they will take care of us,” Brown said.

The program is also hoped to bring in new customers. “We hope there would be appeal in us serving as an innovator with this type of program,” Brown said.

Citigroup Inc. (C), which manages Sears credit card portfolio, will oversee the program. A Sears spokesman didn’t immediately respond to a request regarding what type of payment arrangement Sears has made with the banking company when customers default on their payments.

The appliance program “can help Sears build its image as a ‘good citizen’” and help attract customers at a time they are hard to attract, said Barry Seifer, head of retail consulting firm Hart Seifer Partners.

“But as a purely financial move it doesn’t make total sense,” Seifer said. ” They are making an appeal to customers who are more likely to become unprofitable to them.”

Sears shares were recently up $2.67, or 4.11%, to $67.57.

“Recession Brings Out Salvation Army Kettles in July” (WATE):

KNOXVILLE — Due to the recession, the Salvation Army will bring out the Red Kettles for a first time ever summer campaign in Knoxville.

Volunteers will ring bells on Friday and Saturday, July 17 and 18 at four Kroger locations:

• Knox Plaza in Bearden
• Middlebrook Pike at Cedar Bluff
• Northshore Drive at Pellissippi Parkway
• Kroger Marketplace in Farragut

Officials say the recession has been hard on local non-profits.

“Some of our major corporate donors have closed their doors this year,” explained Knoxville Area Commander Major Don Vick in a press release.

“While our donations have been somewhat flat, our requests for assistance have increased dramatically,” Vick added.

The Salvation Army is counting on volunteers to get the job done. Interested groups or individuals should call (865)-971-4907 to get registered.

Donations for the Salvation Army are also accepted online or by mail. Click here if you’d like to help.

“Animal Shelters Full Because of the Economy” (KRCG):

The animals at Callaway Hills Animal Shelter are waiting to be adopted.

The shelter has been at full capacity for more than two months now.

Abandoned pets are not what usually comes to mind with a recession, but workers at the shelter say tough economic times have flooded them with animals, so many that the shelter simply can’t take in any more.

“Part of it is from people, you know, losing, you know, losing their homes and they’re calling needing to place their animals.  We get a lot of calls like that,” Callaway Hills Manager Mary Hall said.

Not only are more people giving up their pets, but workers say fewer people are showing up to adopt pets.

Patty Forister with the Central Missouri Humane Society in Columbia says a lot of calls are from long-time pet owners.

“Some people just can’t afford to keep them anymore,” Forister said. “Some people allow their animals to have puppies or kittens and then they have too many and they can’t find them homes, so they just bring them to us.”

Fortunately the Columbia shelter hasn’t had to turn any animals away partly because of an infusion of cash from a nationwide contest.

The Jefferson City shelter has also seen an increase in animals, and although they have almost reached their limit on cats, they are still accepting pets as long as the owner lives in Cole County.

Officials say this overpopulation problem can be easily prevented.

They say it’s important to have your pets spayed or neutered and to keep in mind adopting a pet is a life-long commitment.

“Try very, very hard to keep your pet,” Forister said. “They want to be with you. They don’t want to be here at a shelter.”

According to the humane society around seven million animals enter shelters nation-wide each year and only about three million are adopted.

“State Reconsiders Casino Gambling Amid Recession” (WCVB):

Lawmakers Expected To Act On Bill This Fall

BOSTON — Casino gambling is back on the table in Massachusetts.

Lawmakers held a public hearing Monday to discuss the possibility of expanded gambling.

The discussion comes as Gov. Deval Patrick signs a fiscal 2010 budget sharply cutting government services and also raising the sales tax by 25 percent. Gambling proponents said those moves underscore the importance of capturing some of the estimated $900 million in revenue thought to be gambled each year by Bay State residents at Connecticut casinos.

Yet critics said the state’s precarious financial situation is no reason to prey on vulnerable people who may make bad bets.

Senate President Therese Murray said she expects the Legislature to act on a bill this fall. And one prior opponent — former House Speaker Salvatore DiMasi — is no longer around to block it.

“Free Legal Services Stretched As Demand Rises” (GateHouse News Service):

From fighting for unemployment benefits to staving off foreclosure to watching a family unravel under financial strain, attorneys say more and more people face serious legal problems in a recession.

Yet for many who need it most, finding a lawyer’s help is getting harder all the time.

Legal services organizations that offer free civil representation for low-income, disabled and elderly people are under siege from budget cuts, a drastic drop in other revenue and surging requests for help. That means painful decisions about which clients to help and which to turn away.

“It’s bad when you’re sitting there at a meeting and talking about a victim of domestic violence and debating whether the one who got thrown down the stairs is worse than the one who got thrown out of the car,” said Betsy Soule, executive director of MetroWest Legal Services. “It’s crazy.”

Even in better times, legal services groups say they only have the capacity to serve about half those who ask for assistance. At MetroWest Legal Services, which is based in Framingham, calls have climbed 25 percent in the last six months, but Soule expects a budget cut in the fiscal year that begins Wednesday from $1.7 million to about $1.35 million.

“It’s just an explosion right now,” Soule said. “It’s very difficult, especially for the people who answer the phone and screen the callers to have to say no, because there really is no other place to send folks for comprehensive legal services.”

Greater Boston Legal Services Director Robert Sable said his group, too, faces problems. Its service area includes Newton and Waltham.

“The short answer is yes, we’re getting hammered on both ends - losing money and client demand up,” he said.

Both programs are among 17 legal aid programs funded by the Massachusetts Legal Assistance Corp., which gets revenue from two sources. One is a state appropriation, cut from $11 million to $9.5 million in the budget on the governor’s desk, said Lonnie Powers, executive director.

The organization also receives two-thirds of the interest on lawyers’ trust accounts. Whenever an attorney holds money temporarily for a transaction, such as when a client buys real estate, it goes into an interest-bearing account. That interest helps fund legal aid programs.

Much of that interest has dried up along with real estate sales. The interest rate for such accounts also has been cut to between zero and .25 percent, Powers said. That has caused interest to drop precipitously, from $26 million in 2008 to about $10 million in fiscal 2010, meaning a 67 percent drop for Mass. Legal Assistance Corp., Powers said.

That’s meant layoffs, attrition and furloughs at many legal aid groups. Soule’s organization has not replaced departures, instituted a hiring freeze and will spend down its reserves, she said.

The state budget cut means upward of 2,000 cases that would have been handled otherwise probably won’t be picked up, Powers said.

“It’s a real disastrous result of the problems in the overall economy and the problems in the commonwealth that we’re seeing these cutbacks in legal assistance when low income people really need them more than ever,” he said.

Many people are seeking help with evictions by landlords who have lost their homes to foreclosure, Soule said. Homeowners, too, are seeking help in foreclosure proceedings.

More employers are contesting unemployment benefits, leaving those who have lost jobs forced to fight for them. Some are seeking transitional assistance to get by.

Divorce and family problems, too, are rising, with some parents looking to reduce child support payments after losing work, lawyers said.

In most cases, to qualify for legal aid services, clients can make no more than 125 percent of the federal poverty line, which is about $26,000 for a family of four, Soule said.

Massachusetts Bar Association President Edward McIntyre said his group and county bar associations are boosting the number of attorneys offering pro bono services to qualified clients. But legal aid work takes specific skills, and there are not enough pro bono lawyers to meet the demand, he said.

“I’m 64. I’ve never seen this in my lifetime,” McIntyre said. “I’ve been a lawyer since ‘81.”

With some analysts saying it may be 2014 before state revenue recovers, legal aid may be reaching a “chronic stage,” McIntyre said.

“I don’t think we can hold on, legal services in the commonwealth, perhaps without some relief,” such as federal stimulus funding, he said.

Ironically, Powers said, legal aid often saves Massachusetts money by shifting qualified people from state assistance programs to federal ones.

“That’s the paradox of need and resources,” he said

“Losing Our Jobs, Rediscovering Our Children” (Momlogic):

Yvette Manessis Corporon: I never knew what I was missing. How could I, a committed career woman, have any idea?

Carpools and class parties were for other moms, the ones who stayed home, the ones who dropped their kids off at school and then played tennis all day. I wasn’t like them. I had important meetings to attend and stories to write and deals to make. I had an identity outside of the home and a career I had meticulously cultivated. Of course I loved my kids and they came first — but I also loved having my own identity, a purpose outside the home. I always thought I did a pretty good job of balancing it all. And then it happened — the recession, that is.

Like countless other Americans, I saw my work situation change overnight. Instead of working full-time and full steam ahead, I’m now working part-time — less time spent in the office and more time spent at home, shuttling my kids to playdates and parties. I have to admit, I never fully understood the importance of school drop-offs and pickups until I actually started doing them on a daily basis. Now that I’ve seen my son flash his precious preschool smile the second he spots me in the car line, or listened, mesmerized, as my 8-year-old shares the intimate details of her day over an after-school snack — there’s no going back. I always made it to the big events, special days like recitals and school plays, but I never understood the beauty and value of those small moments, the moments I missed out on all those years while I was working. And I’m not alone.

The numbers are staggering, as well as scary. There are 14.5 million unemployed people in the U.S. 9.4% of Americans are out of work. Among them, millions of formerly working moms now find themselves taking on a daunting and quite foreign role: that of stay-at-home mother.

A funny thing happened on the way to the unemployment office; many of these moms lost their jobs but rediscovered their children in the process.

Wendy Lehman is an award-winning journalist who loves what she does and never once considered life as a stay-at-home mom. Since she became a mother three years ago, Wendy managed to nurture her son, Nicholas, as well as her career. But this past December, Wendy’s show at BusinessWeek TV was canceled and she found herself at home caring for Nicholas full-time. Now this hard-charging journalist says she would be hard pressed to go back to her old way of life. “I am a little surprised at how much I enjoy staying home,” Wendy tells momlogic. “I definitely thought I would experience a big sense of ‘who am I?’ The cliche of losing my identity. But what I discovered is that ‘Mom’ is a huge part of my identity. In fact, equal to my career.”

But that’s not all. For Wendy, and so many other first-time stay-at-home moms, the opportunity to finally focus completely on our families can be more valuable than even the paychecks we’ve lost in the process. Wendy explains: “I also can’t quantify how amazing it is to spend this much time with my son. Having been both a ‘working’ mom and a ’stay-at-home’ mom, I can honestly say they are both equally difficult and exhausting. But staying at home allows me to be less divided emotionally and that is satisfying for both Nicky and myself (and my husband!).”

Linda Mautone agrees. After 14 years, the mother of two was recently laid off from her fashion industry job. While facing unemployment can be daunting, Linda and her family have found that it can also have its benefits. “My husband loves it. We aren’t juggling our schedules anymore. The stress in our lives has been reduced. It is a calming and more spiritual family existence we now share.” And while Linda is open to returning to work, this experience has had an indelible impact on the roles she wishes to play, both at home and at the office. “If I decide to go back into the workplace, I definitely won’t return to a management position. I want to focus solely on my family,” she says.

We all know that these are challenging and difficult times. There’s no great joy in losing your livelihood, especially when you have little mouths to feed. But even in these dark times, there are still lessons to be learned and beautiful glimmers of hope to be discovered. For me and so many other moms, that hope can be found in the faces of our children: in their giggles, in their smiles, and in the priceless and unexpected moments we suddenly find ourselves sharing. One day, hopefully soon, the economy will turn around and the workplace will need us once again. We’ll get our careers back, but not this time we have with our children. Yes, these are scary times — but it’s also time to reflect, reconnect, and rediscover the gift called motherhood.

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