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MELISSA BLOCK, host:

Amidst the bear market, mortgage meltdowns, faltering banks, and looming recession, we're asking this question: How does all of this affect people's lives? Well, our co-host Robert Siegel has been asking just that in a place that may keep us up late on election night waiting to learn who the next president will be. Robert went to the bellwether Ohio city of Chillicothe, population 22,000.

ROBERT SIEGEL, host:

The parking lot at the Glatfelter Paper Mill during a shift change. Glatfelter is one of the two biggest private employers in Chillicothe. Ask people about the economy, and this is what you hear. From Vicky Mitchell.

Ms. VICKY MITCHELL (Employee, Glatfelter Paper Mill): We're facing, maybe, some possible layoffs. Gas is always high here in this area.

SIEGEL: And from Carl Winfield(ph).

Mr. CARL WINFIELD (Employee, Glatfelter Paper Mill): People ain't got money to spend, you know, go to the stores to spend. So everything's just like at a halt. And there's nothing anybody can do. You know, people got to buy their groceries, and I don't see it getting any better.

Mr. ROSS HATFIELD(ph) (Employee, Glatfelter Paper Mill): My 401(k) is going to hell.

SIEGEL: Your retirement took a beating there.

Mr. HATFIELD: Right. The retirement has gone to the toilet. That's the main thing I'm worried about.

SIEGEL: And that was Ross Hatfield. Chillicothe was Ohio's first capital, a fact that it celebrates. It has maintained a gracious, old-fashioned downtown district that is neon-free and heavy on historical landmarks. In downtown Yoctangee Park, Sonya Massy was babysitting her three-year-old granddaughter.

Ms. SONYA MASSY: I've never been rich, but I've always been comfortable. You know, if I wanted to go to McDonalds, you know, it's either you buy - when you go buy groceries, you buy your food or your cleaning stuff. It's hard to buy everything now. And if there's not two people working in the family, you just can't do it anymore.

SIEGEL: People here talk about unusually tight times.

Ms. TAMMY BONNER (Utilities Clerk, Chillicothe City Hall): Hi, 89.12 out of 90.

(Soundbite of cash register)

Ms. BONNER: And thank you very much.

SIEGEL: At City Hall, Tammy Bonner is the utilities clerk. Some people come in person to pay their bimonthly bill for water, sewer, and garbage. And she says more and more come to explain why they can't.

Ms. BONNER: People come in and ask for more extensions. It's definitely taken an effect on the water department.

SIEGEL: Really? More so than usual? More so than a couple years ago?

Ms. BONNER: Yes. It's always been bad, but you can tell it's getting a lot worse. Some of them are, like, unemployed and starting a new job, or waiting for the unemployment to come in.

SIEGEL: That's one measure of economic distress. Mayor Joseph Sulzer has another measure, the license plates on the cars parked outside the local Wal-Mart or the Lowe's or the chain restaurants along Bridge Street.

Mayor JOSEPH SULZER (Democrat, Chillicothe): We serve as a regional shopping center for a lot of counties throughout this part of the state. And it would be not unusual, especially on a weekend night, to go to those shopping centers and see automobile tags from a lot of the adjoining counties. We're seeing less of that. People are not spending as much money, eating out as they used to, because of the high cost of gasoline. Or the fact that people are concerned about, gee, what does the future hold? Am I even going to have a job? Am I going to be able to keep my house?

SIEGEL: The city is also a regional hub for health care with a medical center and a VA hospital. Add two state prisons, and you've got a fairly diverse local economy. People here say it's much worse in nearby Portsmouth. Like everywhere, the real estate market in Chillicothe is in the deep freeze. And now there's the credit freeze to worry about. Mayor Sulzer says the state of Ohio just tried to borrow $150 million for low income housing, and no one was interested in buying those bonds. So, what will happen when the city of Chillicothe has to borrow a couple of million dollars to build a new bus garage?

Mayor SULZER: Between now and five years, we're going to have to go to the bond market and try to sell those bonds. And if the state of Ohio, with all of its assets and its record of borrowing and paying off their debt, is having a difficult time, I can imagine what difficult time we may have.

SIEGEL: As for local commerce, the facts may be distressing, but the mood among Chillicothe's merchants is somehow resolutely optimistic.

(Soundbite of Chillicothe Chamber of Commerce event)

Mr. MARVIN JONES (President and CEO, Chillicothe Ross Chamber of Commerce): All right, so now we're cooking. We've got all the sound going. So, I want to welcome everybody to tonight's Business After Business. And obviously our sponsors, we want to give them a big round of applause.

SIEGEL: This is a monthly Chamber of Commerce event. More than a hundred people came to dine under a tent on the parking lot of the local Harley Davidson dealership. The host, Marvin Jones, runs the Chamber of Commerce. He used to run the local paper. Marvin Jones drove me to the industrial park where some of the biggest local employers are based. There's the Adena Regional Medical Center which was created decades ago as a local nonprofit. It's growing, although it's had to scale back its expansion. In good times, the Kenworth Truck plant employs more people than the paper mill, almost 1,700. Kenworth management had been talking about boosting production. Instead, they've put workers on short work weeks.

Mr. JONES: Right now, they are building 63 trucks a day. And the plant manager just told me that if you want a truck, you can have it in two weeks now. Whereas in the past, they were hoping to get to - they had a build rate of about 90 or 100. And they were hoping to get to 125. And you probably had to wait at least three months to get your truck.

SIEGEL: So the pace of production now is just a little bit better than half of what they had hoped it would be.

Mr. JONES: Yes.

SIEGEL: When they were looking at a slightly rosier future.

Mr. JONES: Right.

SIEGEL: When people lose their jobs and the bills pile up, some turn to places like Heartland Cash Advance.

(Soundbite of phone ringing)

Ms. MARY MEYERS (Manager, Heartland Cash Advance): Good afternoon. Thank you for choosing Heartland Cash Advance. This is Mary. How may I help you?

SIEGEL: Mary Meyers runs this office at the corner of Bridge and Main. She talked with me about the business which is threatened with extinction. Heartland is a payday lender. People borrow a hundred bucks for two weeks and pay $15 in fees and interest. They can borrow as much as $500 and pay $75.

A new state law that's on the ballot in Ohio this November would cap the annual interest rate they charge at 28 percent. It's currently about 390 percent. Critics call that predatory lending. People in the business call it a service that some borrowers choose.

Ms. MEYERS: People that come in here are just, you know, your average person that needs money to make it in gas to get back and forth to work for a couple days before they get paid. Or they're sick and they need medicine until they get paid. They can't wait. They have to have it now. So they'll borrow money, go to the pharmacy and get their medicine. Those are the people that, you know, come here.

SIEGEL: As the keeper of information on Heartland's local clients, Mary Meyers has an encyclopedic command of the dire straits of her friends and neighbors. And her own story isn't much different.

Ms. MEYERS: We had been OK until, I would say, probably a year and a half ago. Jobs weren't as easy to get. My husband was working for a roofing company and wanted to change shifts just because with the roofing company you're laid off in the winter. And it was kind of hard to find a job for him. Then after a few months he did, and - which was the job he was just laid off from.

SIEGEL: Is the hope here that business picks up next year, maybe that the jobs will be returned? Or do you assume that's it for your husband's job at that...

Ms. MEYERS: Oh, I hope that jobs come back. I really hope that jobs come back. The job he was at wasn't the best job, but it was a job. It helped put food on the table and gas in the car. And so I hope that jobs come back. I would like to see him go back to that job or an even better job, any job at this point. There's just no jobs around here.

SIEGEL: So you're making it on one...

Ms. MEYERS: Yes.

SIEGEL: On one income right now.

Ms. MEYERS: Yes.

SIEGEL: Children, do you have?

Ms. MEYERS: I do. I have two children. I have a 15-year-old and a 10-year-old, and they are not cheap. And we've explained to our children that Christmas will not be the same this year. And they seem to say they've got it, but kids don't get it, you know. So...

SIEGEL: How different will it be in dollar terms?

Ms. MEYERS: Christmas is huge for our family, and it won't be this year.

SIEGEL: Somewhere on the coasts, economists may argue whether this is a recession, when it started, how long it will last, and how much it will hurt. That's a very academic discussion for people in Chillicothe where doing without has become routine for so many. In Chillicothe, Ohio, this is Robert Siegel.

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