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As economy worsens, coping becomes a way of life



Published: Sun, May 4, 2008 @ 12:00 a.m.

For some families, the high cost of food makes it difficult to have three meals a day.

McClatchy Newspapers

WASHINGTON — When long-haul trucker Rusty Wade pulled his rig into a Missouri truck stop recently, he noticed something strange.

Of the 50 or so 18-wheelers parked in the lot, only five had their engines idling.

“That’s only because of the high price of fuel,” said Wade, an independent owner-operator from Brundidge, Ala. “A year ago there would only be about five that weren’t running.”

But with diesel fuel at more than $4.20 per gallon, Wade not only shuts his engine down to save money. He’s also cut his average road speed from 60 to 56 mph.

Instead of hotels, he and his trucker wife, Mary, often sleep in their separate vehicles. And if a steady crosswind slows his pace and cuts his gas mileage, Wade will park his rig for five to six hours, if necessary, until it subsides.

“It’s the only way I know to get more fuel mileage. Wind is my biggest enemy,” he said.

In one form or another, Americans from coast to coast are following Wade’s cost-cutting ways. Whether it’s fewer restaurant visits, shorter road trips or skipping a haircut here and there, more consumers are looking for ways to stretch their dollars.

And with good reason. The soaring cost of core essentials like gasoline, food and housing now account for 57 cents of each consumer dollar spent. That leaves Americans with a record-low 43 cents out of each dollar for discretionary spending, according to new figures from Wachovia Economics Group.

That helps explains why new vehicle sales in the U.S. are at a 10-year low and why consumers are buying less clothing, shoes and big-ticket items like furniture and computers.

With inflation up 3.2 percent from last year and wages stagnating, consumers are undoubtedly girding for a severe recession. The squeeze has forced small businesses to be more creative as well.

Dan Meldrim, president of Empire Freight Logistics in Syracuse, N.Y., had to overhaul his entire trucking business to survive.

For each 6-cent rise in fuel prices, he needed to increase his fee by 1 cent per mile. As his costs rose by $3,000 or more each week, he often passed them onto disgruntled customers.

“In October, I sold my trucks because it’s hard to make it as a trucking company,” Meldrim said. He now operates as a freight broker, helping companies consolidate smaller loads into one to share costs. Meldrim knows he’s lucky. Shedding his six trucks and developing a new business model was the key to his survival. “A lot of small companies have gone out of business,” he said.

Restaurants are particularly vulnerable during economic downturns, and the rising cost of food hasn’t helped.

When a 25-pound bag of Gold Medal flour jumped to $20, restaurant owner Diane Park of Fairfax, Va., made a similar jump — to ConAgra flour, which was half the price.

As she loaded 10, 25-pound bags into her SUV last week, Park said she really didn’t have a choice. Business at her La Bettola Italiana restaurant had fallen 30 percent to 40 percent since October and raising prices to keep pace with soaring food costs was not an option.

“I can’t do that because if we raise the price they won’t come and eat,” she said.

With only four employees, Park can’t trim her staff to cut costs either, so she’s looking for food value without sacrificing quality.

Others, like Jellyn Lewis of Washington, D.C., are struggling just to provide three square meals a day for her family.

Since last year, egg prices are up 30 percent. Milk and cheese have increased 13 percent. Prices for wheat, soybeans, and corn have jumped 60 percent to 80 percent since last year on the Chicago Board of Trade, driving up the price of cereal, bread and other products.

Bread for the City, a Washington, D.C., food pantry, has already had 10,000 more visitors than last year and Lewis is one of the new ones.

A 43-year-old receptionist, Lewis sought help feeding her husband and four children when avoiding restaurants and buying generic products and cheaper cuts of meat weren’t enough. Admitting she needed help wasn’t easy, either: “I’m from the Caribbean and we’re not rich, but we have pride.”

she said. “But with gas and food on the rise, we needed help. That’s why I’m here.”

The two bags of groceries she gets each month feed her family for two to three days, she said.

While things remain tense for poor and middle-class Americans, Commerce Secretary Carlos Gutierrez told McClatchy Newspapers on Friday that things are better than could be hoped for in the broader economy, considering the deep housing-market correction and problems in credit markets.

The economy shook off those problems to grow at a sluggish rate of 0.6 percent in the first quarter. And while employers trimmed the workforce for the fourth consecutive month, Friday’s job numbers showed that unemployment actually improved to 5 percent.

“All of the indicators that we look at suggest that the fundamentals are still strong, and once again it is a great example of a resilient economy,” Gutierrez said.

Lewis isn’t convinced.

“I think it’s going to take awhile to turn things around,” she said. “We’re about to change presidents, and it will take a while for the new president to get the ball rolling.”


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