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After climbing economic ladder, one family fears falling backward

A series of job losses has one family worried about falling down the economic ladder
A series of job losses has one family worried about falling down the economic ladderJohn Makely / NBC News

FOREST HILLS, Pa. - Mary Conti lives with her husband and two young children in a comfortable 1940s brick home on a quiet street just outside Pittsburgh.

The home, with its kitchen gadgets, flat-screen TV, newer computer and other trappings of a middle-class life, is only a couple of miles away from where she was raised, in nearby Wilkinsburg. But it’s a world away from the dilapidated neighborhood where she remembers her mother struggling to make ends meet on a string of minimum wage jobs.

“I didn’t want to live there. I didn’t want to live like that. It’s hard. It’s hard to be poor,” she said.

That’s one reason she became the first person in her family to go to college. It was among a series of steps she and her husband, Rich, took to try to ensure a financially stable, middle-class life for their own daughters, who are now 5 and 8.

But after five difficult years, Rich, 40, and Mary, 41, are grappling with a fearful situation that many Americans have faced since the nation went into recession in late 2007: The prospect of falling back down the economic ladder.

A string of layoffs has left the Contis preparing for the possibility of living on around $27,000 a year, down from about $75,000 they were earning before Rich was laid off for the second time in five years.

The economic doldrums and high unemployment rate have left many Americans in a significantly different financial position than they were a few years ago. Median household income and median household net worth have declined, while the poverty rate has been rising. Millions more Americans are accepting food stamps than a few years ago.

For many, that translates into a feeling of going down, rather than up, the ladder to prosperity. About one-third of Americans now identify themselves as lower or lower middle class, according to a Pew Research report released Monday. That's up from about one-fourth who identified themselves that way four years ago.

Rich was laid off for the first time in June 2007, after seven years of working for a regional grocery chain. That time, the financial hit was short-lived: He landed a new job in marketing just a few months later.

When the second layoff struck, in February 2010, Rich was out of work for 17 months before he found much lower-paying work sorting mail at a postal service distribution center in July 2011.

Then, in June, Mary lost her job as a reporting analyst at a for-profit education company where she’d worked for 16 years. She hasn’t yet found a new job.

Mary received a severance check and figures she is eligible for a few more months of unemployment payments. But if, as she expects, she can't find a job quickly, the family will have to live on his salary of about $27,000 a year.

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It’s a frustrating and frightening prospect for the Contis, who considered filing for bankruptcy about a year ago, before Rich found the job he has now. But the bankruptcy option still dangles like a sword over their heads.

“We can’t pay all of our bills on just his salary,” said Mary, who had just one phone interview since losing her job.

They didn't pay the $1,400 health insurance bill last month. They don’t know what will happen if one of their two older cars breaks down.

“We’re not in dire straits now, but we’re a car accident or an injury away from being in big trouble,” Rich said.

This wasn’t how they expected their life to be.

Mary wanted to go to college after she watched her mom struggle to raise three kids on a minimum wage salary after her father passed away when she was 14. She put herself through college, despite her mother’s reservations about whether it would be worth it, and subsequently even earned her MBA from the for-profit education company where she worked.

From the start, the Contis worked to create a middle-class life. The couple, who have been married for 12 years, bought their modest, comfortable home nine years ago, after Mary had paid down her $12,000 in student loan debt and Rich was well on his way to paying off his $25,000 college debt. They also waited to have children until they felt financially ready.

They were several months into a three-year plan to pay down their credit card debt when Rich was laid off for the second time. The goal was to pay off all their debt and then take a trip to Disney World. For now, they are making only minimum payments.

Rich liked his job, analyzing customer response data for advertisers, and had hoped to build a career in the field. But he said that work has become more automated, leaving less of a need for jobs like his.

After that second job loss, the job search was much more difficult. In July 2011, just as the couple was starting to talk with a lawyer about bankruptcy options, he found the job sorting mail.

The job doesn’t make use of his college degree, and he figures it’s about a 20 percent pay cut from his last job in marketing.

Rich Conti arrives home from work at 3:45 a.m.
Rich Conti arrives home from work at 3:45 a.m.John Makely / NBC News

It’s also grueling. From Tuesday to Saturday, Rich leaves the house around 5 p.m. for the long commute across Pittsburgh to the distribution center, where he’ll sort mail or do other jobs from 6:30 p.m. to 3 a.m., or later if there is overtime.

When he gets home, he typically sleeps for a few hours, then gets up to see the kids and help around the house before taking another afternoon nap.

“I actually got used to it, and I didn’t want to get used to it,” he said of his unorthodox sleep schedule. “I wanted to remember it stinks.”

He recently qualified for health care benefits, but there’s not a lot of job security. Each year, he said, the people in his position are laid off for a week, during which they are told whether they will be rehired.

Unlike Mary, Rich spent a few years working in manufacturing and low-wage jobs before going to college. Like Mary, he paid for it himself, figuring it was an investment in a better life.

“You think, OK, you go to college, (you’re) going to make enough money that you don’t have to deal with this anymore. And then where am I? At the post office, working nights, working weekends, making less money and still getting dirty,” he said. “I thought I was done with this, is how I feel. I’m fighting to get back out and it’s really hard.”

Rich has kept applying for jobs in his field, but he says no one has been willing to take a chance on him. At this rate, he figures he’ll be working at the postal distribution center for a few more years.

Although he’s not currently using his college degree, Rich said the recession and recovery has reinforced for him the value of sending his two daughters to college.

"Well, they’re going. If I have to hold a gun to their heads and walk them to class, they’re going,” he joked one day while battling traffic on his way to work.

Still, the couple frets that they haven’t been able to start a college fund. It’s one of many ways they’re straddling the divide between their former middle class life and their current, financially stretched one.

When Rich called Mary to tell her about his first layoff, Mary remembers that she hung up the phone and immediately called the cable company and the newspaper to drastically curtail the family’s expenses. She pulled her kids out of daycare, quit the gym and cut back on eating out.

There was a similar panic the second time Rich was laid off. But after she lost her job a few months ago, Mary said she has been slow to cut costs even though her job search hasn’t yet yielded anything.

She’s not sure why she isn’t more panicked, or quicker to cut back.

Mary Conti sorts through her daughters' princess dresses, which she plans to sell on consignment.
Mary Conti sorts through her daughters' princess dresses, which she plans to sell on consignment.John Makely / NBC News

Rich thinks part of it is that the couple doesn’t want their kids to again to lose the things that are important to them. Mary says that when they cut off the cable last time, they told the kids they could watch their favorite shows again when Daddy found a job. She knows it’s far from a necessity, but she still can’t bear to do it to them again, yet.

That’s also why Mary kept the kids in swim lessons – although she didn’t sign up for soccer and karate this fall because it’s too expensive.

The Contis have been honest with their children about their financial situation, even half-jokingly telling them not to get hurt at the playground because the family doesn’t have health insurance this month. But privately, Mary said she is already worrying about whether Santa will be able to bring her kids what they want for Christmas.

Rich thinks it’s almost too frightening for his wife to contemplate going back to the difficult financial circumstances she was raised in.

“She doesn’t want to give up what we have,” he said.

Still, the combined effect of several years of financial difficulties is catching up with them.

The couple’s 8-year-old Honda has more than 100,000 miles on it. Their other vehicle, a rusty, 12-year-old minivan with faulty air conditioning, needs to be replaced although they just paid $3,000 for repairs needed to pass inspection.

Perhaps their biggest financial crisis came last year when the ceiling in their bedroom caved in. For months the couple slept on the couch or on an inflatable bed in the den because they couldn’t afford to fix the roof over their heads.

They finally had to grudgingly accept $4,000 from Mary’s mother to repair the ceiling and the front door, which also had broken. Mary’s mom still works a part-time minimum wage job but had recently received some benefit money from Mary’s late father.

“(I said) you need that money to retire on, and she’s like, ‘No, you need to get the roof fixed,’” Mary recalled. “It was awful.”

Previously: Many in middle class one big bill away from falling down the ladder 

The couple used their tax refund to pay back much of the money, but Mary said she still feels bad because her mother doesn’t have much money, either.

Gazing up at the repair one recent day, Mary pointed out a small crack that had already begun to form. She fears it is only a matter of time before the ceiling caves in again.

It wasn’t clear what they will do if they have to deal with that, or any other financial setback. The couple has no emergency fund except their retirement savings, and drawing on that would be a last resort.

“You can’t really plan too far in advance,” she said. “You don’t know when you’re going to get a job.”