Middle Americans haunted by depression

Press, Volume CXV, Issue 33753, 28 January 1975, Page 17

Middle Americans haunted by depression

(By

CHARLES FOLEY,

of the Observer Foreign News Serviced)

LOS ANGELES. By noon, the line outside the Hospitality Kitchen on Sixth Street in downtown Los Angeles is a good two blocks long. It is one of several soup kitchens in this city of seven million which are doing a roaring trade as the economy sinks into an ever-deepning, ever more frightening tailspin.

“There’s a whole new set of people coming in,” says Katy Morris, a teacher turned social worker. “Not skid-row types at all. I’ve talked to people today who can discuss everything from Carlos Castaneda to Castro, and they all say: ‘We can’t find work — there isn’t any’.”

For six million American breadwinners, jobless and increasingly hopeless, the recession brought a Black

Christmas. California, the barometer state, already has 8.7 per cent of its work force unemployed, compared with a national average of 6.5 per cent — and its second city, San Diego, is above 10 per cent. (These figures are being compared here with the 2.7 per cent in gloomy Britain). A long cold winter is on, and with it the worst and longest recession since World War 11. Hardest hit Across the nation a staggering 37.5 per cent of the black teenage population — the young and black are always the hardest hit by any slump — are idle and ineligible for unemployment benefits. But this time the fear of a depression as bad as that of the thirties is haunting the white middle casses no less than the poor in the Watts ghetto near here. Many still working full or part-time suspect that their employers are holding back the bad news.

Among the industrial giants who have already made big lay-offs are General Motors, Xerox, General Electric, Union Pacific, R.C.A. and Sears Roebuck, which has been hit by the heavy slump in Christmas sales. Some people were “released” at a few hours’ notice, shortly before deadlines guaranteeing three days paid holiday over Christmas and New Year.

“This time, lay-offs are in all sections of employment, not just one or two,” says a Californian labour official. “Workers are being sent home by the car industry, steel, lumber, computer firms, electronics, textiles, construction. Some plants have been indefinitely closed down.” A few states have run out of funds to assist the unemployed; others are borrowing. White-collar Many of those being “let go” are white-collar people. A Los Angeles car dealer has reduced his staff to a single person, himself. A real estate developer has cleared out an entire office floor because of staff cuts. Mr Herbert Hezlep 111, president of Acme General, makers of hardware, has closed down three plants for three weeks. “Everyone’s gonna take a vacation," he says, “including me.” Some firms are laying off workers who have been with their companies for 20 or 30 years. Now they must line up outside the Office of Human Resources (the Unemployment Office) or join the siege of welfare bureaux, which show signs of crumpling under the enormously increased work load. More than half of those left idle have no unemployment insurance. In California alone each week 4000 exhaust their short-term benefits, shame-faced middle class families are queueing for the first time to obtain federal food stamps, which can be exchanged for groceries, to supplement their diets. Often they wait several hours for attention, then return again and again with additional evidence to fill a seven-page questionnaire.

Nearly 15 million people are already receiving food stamps, but at least another 25 million are eligible. Some are too proud to accept “charity,” but more simply

don’t realise that they qualify because the Government makes no effort to inform them. So far from boosting this programme, Washington plans to cut $l4O million from it by March. “We put off getting stamps as long as we could,” said a mother of three, wife of a Los Angeles realtor. “My husband hates the idea of taking a handout. But the children were getting all puffy from the starchy food we were eating. The welfare office was a humiliating ordeal. We waited hours, but didn’t get called before they closed. It was horrible at the supermarket counter too, paying with stamps before people we knew.” Bonuses a memory Christmas bonuses were just a fond memory in many offices and so were those-jo-vial Christmas parties. McDonnell Douglas, the Californian aerospace giant, closed its plants for a full week and refused to pay 3000 scientists and engineers for that period. The energy pinch and the car slump — industry lay-offs will top 140,000 in Detroit by the end of January — are shaking California, the state with the most cars. Major oil firms have now “deactivated” 24,000 petrol stations across the country and pjan to close thousands more early next year, bringing the total left open to the lowest figure since 1950.

The cash shortage has sharply reduced donations at this time of traditionally generous response to appeals for the sick and needy. “Money gifts are down by a third or more,” says a Salvation Army spokesman. “People are hanging on to their possessions. An overcoat that would have been given us last winter is being made to last another year or two.”

Faced with all this, the Senate has passed a bill authorising a generous $7OOO million for extra unemployment benefits and public works to absorb some of the jobless, but the House of Representatives wants that cut to $5OOO million, while President Ford plans to halve that. The White House is being accused of quietly courting unemployment as a means of combating inflation, and, indeed, the Secretary of the Treasury, William Simon, said he opposed any strong attack on recession, arguing that an attempt to pump up the economy now would trigger a new inflationary explosion,Some do better Dissatisfaction with the President’s performance runs all the way from the laidoff worker to whom the oft-repeated urging to “waste less, drive less, heat less, eat less” has become a grim jest, to that other Ford, Henry IL chairman of Ford Motors, who says: “Washington must take steps that will persuade people that the nation is still under control and not drifting helplessly into disaster.”

A very few areas of business are doing nicely. Debt collection agencies, for instance, have expanded their staffs. And the movies are booming as rarely before, thanks to the public appetite

for epics of disaster such as “Earthquake” which lays Los Angeles flat. There is, it seems, some relief in watching a catastrophe bigger than the one that comes in your pay packet. O.F.N.S. Copyright.