Grateful for his $110,000-a-year telecom job in Richardson, Tex., Michael Smith often donated money to a local food charity while his wife, Elizabeth, volunteered there. But in January, 2001, Smith lost his job as a senior project manager at Nortel Networks Ltd. (NT) He quickly got new work at Soma Networks Inc. but lost that job last May. He hasn't landed anything since. Now, after being jobless for nearly a year, the couple found themselves back at the food pantry run by the Network of Community Ministries -- but this time as supplicants. "I feel like I am taking from someone worse off than me," says Smith, who's 58. "But you do what you have to do."
The tables are turning for plenty of other once-well-off Americans, too. In a sign of just how deep this economic downturn has been, many food pantries across the country say that the white-collar unemployed are their fastest-growing clientele. It's not uncommon to see a sport-utility vehicle or European sedan parked in the pantry lot and homeowners standing in line next to the homeless. "I have been doing this kind of work for 25 years, and I have never seen it this bad," says Ginger York, the Community Ministries' executive director.
Lower-income families and the working poor still account for the majority of people lining up for food handouts. But the rising number from white-collar ranks underscores how this downturn is different. Unemployment among college graduates has risen faster than for those with high school degrees, according to the Bureau of Labor Statistics. And it now takes job hunters an average of 9.6 weeks to land work, compared with 5.8 weeks at the same point in the downturn of the early 1990s.
That's one reason, charities say, that they're seeing more unemployed managerial and professional workers than in the past. Because the search is so extended, job seekers are exhausting savings and unemployment benefits. Many locked themselves into high-dollar lifestyles during the boom and are now strapped with hefty mortgages, college tuition, car payments, and credit-card debt. Says David Reese, a director at the Urban Ministries of Wake County, which runs a Raleigh (N.C.) food bank: "A term we use loosely is 'the newly poor."'
Many are former tech and telecom workers caught in the bust. Lori Kapu, the operations director of Colorado Springs-based Care & Share Food Bank, which supplies 375 small pantries in the region, says jobless tech workers account for more than half of the 55,000 families now going to area pantries. They hail from bankrupt MCI's WorldCom unit, as well as companies such as Intel (INTC) and Hewlett-Packard (HPQ). The Community Ministries in Richardson, in the heart of Texas' Telecom Corridor, has seen laid-off workers from Ericsson (ERICY), Fujitsu (FJTSY), and MCI.
Often, the wealthy have fewer coping skills than the poor, who may better understand how to take advantage of the resources available to those down on their luck. Chet Kallianpur lost a $185,000-a-year job as a development engineer for Intel Corp. a year ago and has burned through half his savings to avoid losing his family's $500,000 home. The Randolph (N.J.) resident learned about a food pantry in nearby Mahwah only when a neighbor, an unemployed AT&T executive, asked him for a ride there six months ago.
Kallianpur, 48, has driven back once a month ever since. But he hopes those trips are over for good, now that he just landed a new job selling local phone services -- though he will earn less than a third of his former salary. "There's no shame in accepting small help when you have given to the system for years," he says. "It helped me stretch my dollar when I couldn't see far into the future."
Joyce Harrelson went recently to the Urban Ministries pantry in Raleigh and hopes never to go back. She lost her $53,000-a-year job in 2001 as an executive assistant to the CEO of an Internet publishing company. She sold her house and has performed odd jobs -- but is still behind on paying rent. For Harrelson, 52, going to the pantry is just too humiliating. "I believe before I go back again something is going to come through," she says. For everyone like Harrelson, though, there are many more "newly poor" willing to swallow their pride. By Robert Berner in Chicago, with Wendy Zellner in Richardson, Tex.