Long-Term Jobless Borrow Money To Stay Afloat

More than half of the long-term unemployed and under-employed have had to borrow money from family and friends to pay their bills, according to a recent NPR News-Kaiser Family Foundation poll. And borrowing from friends and family can complicate the relationships.

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LINDA WERTHEIMER, HOST:

It's MORNING EDITION from NPR News. I'm Linda Wertheimer.

STEVE INSKEEP, HOST:

And I'm Steve Inskeep, good morning.

We're going to get a picture this morning of what's it's like to go weeks then months, then years without a job.

WERTHEIMER: The unemployment rate has dropped lately. And after an embarrassing last-minute struggle, Congress temporarily approved a payroll tax cut for those working and also extended benefits for those who are not.

INSKEEP: But millions of people are still looking for work. A recent NPR-Kaiser Family Foundation poll found many people have had to borrow money from family and friends to pay their bills. And that includes a man who told a story to NPR's David Schaper.

DAVID SCHAPER, BYLINE: For 62-year old Richard Williams of Bay City, Michigan, it's not just been a bad couple of years. It's been almost a decade since he last worked full-time.

RICHARD WILLIAMS: I've been out of work for eight years.

SCHAPER: Williams was a mechanical engineer who last worked in Michigan's devastated auto industry for a joint venture of Chrysler and GM.

WILLIAMS: It's been a difficult time. A lot of frustration because you think you're going to get the position and it's given to other people.

SCHAPER: Williams now believes both the length of time he's been out of work and his age work against him.

WILLIAMS: I've had to go through all my life savings - life insurance, 401k's, IRAs, everything - to survive until I was 62 and started drawing Social Security.

SCHAPER: To make do, Richard Williams says he's cut back on everything and lives a pretty spartan lifestyle. He doesn't have a TV. He got rid of his computer, using one at the library instead. He walks or bicycles there, and most other places after getting rid of his car. Williams keeps the lights dim and the heat low to save on energy. He doesn't wash his clothes as often. And when he does, he uses what he calls the solar dryer - meaning a clothes line.

Richard Williams even changed the way he snacks.

WILLIAMS: One of the things I love is cashews. But at $7 a pound, those are a luxury.

SCHAPER: Williams says he's fortunate to live in the house he grew up in, which his parents left to him and he now owns free and clear. But even with this extremely frugal lifestyle, he hasn't been able to get by on his own.

Williams is an only child, he's divorced and his three grown children are not nearby. So with no family to turn to, Williams says his friends lent him money to help him pay his bills. And those who couldn't help financially, he says, have shared meals.

WILLIAMS: Without my good Christian friends, I'd be really in trouble.

SCHAPER: The NPR-Kaiser Family Foundation poll finds Richard Williams is not alone.

LIZ HAMEL: We found that about half of the long-term unemployed and underemployed say that they've borrowed money from relatives or friends to help pay bills in the past two years.

SCHAPER: Liz Hamel is associate director for Public Opinion and Research at the Kaiser Family Foundation.

HAMEL: We also did a parallel survey of people who are working full-time. And we found that actually 3-in-10 of them say that they've had to borrow money from relatives or friends to help pay bills in the last two years. So, you know, we know folks - whether they're working or not - their friends and relatives are a resource when they hit financial hard spots.

SCHAPER: Hamel says it's not a surprise that people turn to those closest to them in times of great financial need. And she says most say their friendships and family relationships remain the same or even improved after borrowing. But she adds that's not always the case.

HAMEL: Among those who've borrowed from friends and family in the past two years, they were slightly more likely than people who haven't borrowed money to say their relationships with their family members have gotten worse. So, almost a quarter of them say that their relationships have gotten worse with their family members, compared to about 1-in-10 of those who haven't borrowed money from relatives and friends.

DR. ALEXANDRA SOLOMON: I think that borrowing money from family and/or friends certainly complicates the situation.

SCHAPER: Dr. Alexandra Solomon is a clinical psychologist and professor at the Family Institute at Northwestern University. She says financial hardship, unemployment, and under employment, all can strain relationships themselves. Borrowing money, she says, can sometimes add another layer of stress.

SOLOMON: I think the best case scenario is if somebody is borrowing money - from a friend, from a family member - that it happens very clearly that this is a gift versus this is a loan with interest, without interest; that there are really clear guidelines about how that happens.

SCHAPER: With clarity and proper boundaries, Solomon says borrowing money from family or friends can bring people closer together.

WILLIAMS: It's humbling.

SCHAPER: And in Richard Williams' case, he says that's exactly what's happened.

WILLIAMS: The ties that bind us together have become stronger. It's like friendships I never thought would happen, people I would not have even thought of as being friends, are suddenly some of my best friends.

SCHAPER: Now that he's on Social Security, Williams is beginning to pay those friends back. Those he cannot repay in cash, he says, he loves to have over for dinner.

David Schaper, NPR News.

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