Jobless recovery, no restraint fuels debt pressure
The Associated Press
March 23BOISE -- Mark Wagner doesn't have much optimism for the state's economy turning around any time soon.
The client enrollment director at the not-for-profit Debt Reduction Services Inc. has watched the caseload in southwestern Idaho grow from just 1,500 four years ago to 5,000 today.
And the average debt has jumped from $15,000 to about $20,000 in the same time.
"We haven't seen the economy coming back as far as jobs and wages are concerned," Wagner said.
Rising credit card debt, medical emergencies that torpedo household budgets, corporate downsizing and plant closures that have cost thousands their jobs are driving a surging personal debt load across the state.
"There are no jobs out there, and the ones there are don't pay anything," said credit counselor Sherry Matson at Consumer Credit Counseling Service of Idaho. "Everything is seven or 10 bucks an hour. How do you do that -- pay rent even if you don't have any back bills."
Industrial engineer Martin Hinderer, who has been job hunting for months since returning to Boise after being laid off by Boeing in Seattle, saw the same thing earlier this month as he was plowing through possibilities at a state Job Service office.
"It's getting better for low-paying jobs, but I'm not sure about higher-paying jobs," Hinderer said.
Hinderer got a fairly good severance package that has kept him out of financial trouble. But that generally is not the case for thousands of others who find themselves out of work.
Personal bankruptcy filings hit a record 8,214 in 2003 in Idaho and were running over 8 percent ahead of that pace the first two months of 2004, according to the U.S. Bankruptcy Court.
Counselors blame the credit and lending industry for making debt so attractive and easy to accumulate. But economist John Church of Idaho Economics, a Boise economic consulting firm, puts some of the responsibility on the government's shoulders because of its deficit spending.
"There comes a point where people say, 'If the federal government can do it, why not me,"' Church said. "If there were a mentality of fiscal discipline in the country and the idea that we need to save for the future, the federal government should be setting the example, and they are not."
Todd Christensen, who runs financial education program at Debt Reduction Services, said too many people just don't have a grasp of fundamentals like balancing a check book or developing a household budget and then exercising the discipline to live by it.
"We see everyone from hourly workers to well-paid professionals," Christensen said. "It doesn't matter how much you earn. If you spend more than you earn, you're in trouble."
But while education and discipline can help limit increases in personal debt, Wagner and others see better economic conditions offering real relief.
"You're going to have to have an income recovery, a job recovery," he said.
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