Business

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Middle Class Feels the Pain of Ailing Economy

April 02, 2008 04:46 PM
by findingDulcinea Staff
Rising unemployment and inflation have impacted the purchasing power of Americans. Applications to charity organizations and for government aid have spiked.

30-Second Summary

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More than 28 million Americans are applying for food stamps this year, the highest number since the program’s inception in the 1960s.

The sub-prime mortgage crisis is the key cause of economic strife, writes British paper The Independent, and the downturn “is starting to hit the country in its gut. Getting food on the table is a challenge many Americans are finding harder to meet.”

An estimated 50,000 jobs were lost in the United States in March, pushing up the unemployment rate to approximately 5 percent.

Income earners in the middle class are struggling to keep up with home payments and inflation for staple items and services.

Government aid programs such as HEAP, which subsidizes fuel oil costs, often cannot support middle-class families because they earn above a certain threshold. This is forcing some families to resort to charitable organizations to meet the gap.

"We're seeing folks that may own a home, who may be working two or three jobs, but are not able to cover all the costs that they've incurred,” said Gwen O’Shea, a social services worker for the Health and Welfare Council of Long Island.

Economists agree that indicators show the United States is in a recession. Robert Parks went as far to say a “Bush depression” is ahead. Others, such as Ed Yardeni, say "basic capitalism and materialistic instincts" will prevail.

See Associated Press coverage

Headline Links: ‘USA 2008: The Great Depression’

Background: ‘Middle class Long Islanders turn to food pantries’

Analysis: Economy swimming upstream

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