JUDY WOODRUFF: Next, another story about people hard hit by hard times. Tonight, working, but getting paid less. NewsHour correspondent Spencer Michels reports.
SPENCER MICHELS: The recession hit 37-year-old Heather Scharf much harder than she ever expected. The single mother of 5-year-old Christina thought she had it made. When she was 20, she dropped out of community college to take an entry-level job in the booming mortgage industry.
HEATHER SCHARF: I started out doing receptionist work and then eventually worked my way up and ended up doing “doc drawing,” which is the papers you sign when you get a home, and then into underwriting, and just kept going and going.
SPENCER MICHELS: Scharf lives in a house her parents own in the town where she was born, Antioch, Calif. It’s on the northeastern edge of the San Francisco Bay Area, along the picturesque Carquinez Strait and the Delta. It’s a town that grew like wildfire in the past decade because the homes were more affordable than those closer to San Francisco.
Today, many of those homes are vacant, foreclosed on. And downtown Antioch is a depressing scene: Vacant storefront after vacant storefront line the empty streets.
As a worker in the mortgage business, Scharf had a front-row seat at the housing fiasco many blame for the county’s and the nation’s woes.
HEATHER SCHARF: We were giving loans to people who didn’t even have to prove their income. You know, appraisers were coming out appraising houses hundreds of thousands higher than they realistically were worth.
SPENCER MICHELS: Did you know that this was probably an unsafe practice at the time?
HEATHER SCHARF: No, because we were busy. I mean, we were really, really busy. I could make, on a good year, $70,000, $60,000. I was safe there, I thought, for a while, so — it didn’t turn out that way.
Finding a new job difficult
SPENCER MICHELS: Before her daughter turned 4, Scharf's company started laying off workers.
HEATHER SCHARF: All of a sudden one day, they walked in, said, "Come on down here," gave us our blue packet, and we got about two months severance pay, and that was it.
SPENCER MICHELS: Scharf is hardly alone. The social service offices of Contra Costa County, where Antioch is located, are bursting with people who have lost their jobs, run out of unemployment insurance, and are asking for help.
Kareen Morgan is the division manager for the county's workforce services.
KAREEN MORGAN, Contra Costa County Workforce Services: We've been seeing our caseloads, our applicants go up 36 percent over the last year. These are people who -- a lot of them had jobs. A lot of them are two-parent families. They now have been laid off, particularly from mortgage industries and banking industries. They've had unemployment. They've gone through their assets. And they come to us for help.
SPENCER MICHELS: For Heather Scharf, the fear that comes with losing a job and not finding a new one was very real.
HEATHER SCHARF: I started getting scared and pretty soon, you know, I'm realizing, "OK, this is kind of taking too long. I'm not getting any responses on anything I'm sending out over the Internet for jobs."
SPENCER MICHELS: Meanwhile, she was caring for Christina and worried about keeping life as normal as possible.
HEATHER SCHARF: I started getting really depressed, just, you know -- my daughter was noticing it. You know, I felt bad, because she was, like, "Mom, why are you sad?" And you know, "Why aren't you working?" And I felt bad because, all of a sudden, I went from making so much money to living on unemployment.
Falling out of middle class
SPENCER MICHELS: Her mother told her about a nearby non-profit called Opportunity Junction, which trains mostly women for the workforce. Scharf decided to give it a shot.
Alissa Friedman, the program's executive director, says Opportunity Junction was originally founded to help people move from welfare to work, but recently she's seen a real change in the clientele.
ALISSA FRIEDMAN, Opportunity Junction: We're now seeing people coming through our doors who have really solid work histories, but who lost their jobs and can't find another right now. We're seeing people applying to our program who were homeowners, who were solidly in the middle class, and who have fallen out of the middle class.
SPENCER MICHELS: Using the skills she learned at Opportunity Junction, Scharf did find a temporary job in the payroll department at John Muir Hospital, about an hour's drive from her home.
She says she earns $1,800 a month, less than half of what she had been making in the mortgage industry. And since the job is through a temporary employment agency, she's unsure how long she'll be working.
Meanwhile, $800 of her monthly pay must cover the cost of sending daughter Christina to a school where she can stay late.
HEATHER SCHARF: Grandma's picking you up today.
HEATHER SCHARF: Because I work late. It's my late Monday. I'll be home at dark again.
SPENCER MICHELS: All of the stress and the uncertainty has been exacting a toll on Scharf.
HEATHER SCHARF: I went to Kaiser, and they gave me antidepressants and sleeping pills, just a mild sleeping pill, because I couldn't sleep at all. So...
SPENCER MICHELS: How were you paying your health care?
HEATHER SCHARF: I was paying it out of pocket.
SPENCER MICHELS: That must have been expensive.
HEATHER SCHARF: Yes, until recently, so now I don't have any.
SPENCER MICHELS: Really? You let it go?
HEATHER SCHARF: I had no choice. It's that or lose my vehicle. I'm on the last, like, week of my pills, so I don't know what I'm going to do. I'll figure out something.
Erosion of social safety net
SPENCER MICHELS: Her daughter's health insurance is paid for by her father. But for Scharf, the chores of daily living, the simple act of shopping at the supermarket have become exercises in lowered expectations, in cutting down, in searching for bargains.
HEATHER SCHARF: Hmm. We'll wait until it's on sale next week. You've got enough.
SPENCER MICHELS: Scharf has become one of the working poor, a plight that is more and more common, says Alissa Friedman.
ALISSA FRIEDMAN: These are folks who are working hard. They're working 40 hours a week -- maybe they're working a second job on top of that -- and they're still not making enough to survive, to be self-sufficient. Here in the Antioch area, 36 percent of working families are not earning enough to meet all of their basic needs.
SPENCER MICHELS: County workers are seeing direct evidence of that, as well. Kareen Morgan started as a social worker in the '70s.
How does this crisis compare with what you've seen over the last 30 years or so?
KAREEN MORGAN: This is by far the worst. And it's hard on the department. We've had to lay off staff at the same that we have a greater need coming into our office.
SPENCER MICHELS: Heather Scharf figures she can ride out the storm, but she knows it won't be easy or quick.
HEATHER SCHARF: Some days are not optimistic. Some days are like, you know, "I can't do this. This is just -- you know, I can't do it."
But, you know, after maybe having a bad night or a bad day, I wake up and I say, "You know, there's something out there for me." It's just it might not be instantly, and I've been humbled, very humbled.
SPENCER MICHELS: At a time when people like Heather Scharf need help the most, the social safety net is eroding. Plunging home prices and lower wages have hurt tax revenues, so county and state budgets have taken big hits, cutting health and social service programs that the working poor increasingly depend on.