Romero sees his daughter Veronica, 17, off to school outside their Lorton… (Katherine Frey )
If money were not so tight, Regino Romero would use the basement of his Lorton town home some other way. But with his former wife gone, his paycheck flat and his bills rising, he sees no option but to rent the place out.
The cash -- $400 a month -- helps, but it is not enough. So Romero recently placed an ad in a local newspaper, offering to also rent one of his home's three bedrooms for $350 a month.
Bringing tenants into the comfortable home he shares with his three school-age children is a last resort for Romero, who once saw the middle class as tantalizingly within his reach. But with the economy sputtering, inflation increasing to levels not seen in nearly two decades and his family life in flux, he is struggling to survive economically. Although he has worked full time for nearly 14 years as a cook at the Hilton Crystal City hotel, he feeds his own family with help from a local food pantry.
"It would be hard for me to work another job, because I have custody of the children," Romero said while sitting in his dining room, which is decorated with a picture of the Last Supper and blown-up photos of his parents and other family members. "If you don't take care of the kids, they are going to be on the street. So I have to be here when they are home. But I know my salary cannot pay for everything for my children and myself."
Romero's dilemma is not unlike that of many low-wage workers struggling to cope in an economy that has left them behind. A national survey by The Washington Post, Henry J. Kaiser Family Foundation and Harvard University found that large percentages of low-wage Americans struggle to pay for life's staples. Eight in 10 find it hard to pay for gasoline or save for retirement, while more than six in 10 said it was tough to afford health care. And roughly half said they were having difficulty affording food and housing.
Workers are more productive than ever, as the output per person has hit new highs in the past eight years. But rather than funding wage increases for most employees, the fruit of that new efficiency has largely bypassed all but the people in the best-paying jobs, as inflation-adjusted incomes for typical Americans edged downward from 2000 to 2007.
Now, as the global financial system strains to absorb its biggest shocks since the Great Depression, the once faraway world of Wall Street is making things worse for low-wage workers.
Even before last week's dramatic declines on Wall Street, credit markets had tightened, making borrowing more expensive -- or impossible -- for people and businesses whose credit histories are less than stellar. Already, most lenders are requiring higher down payments for mortgages and more collateral for other loans. Tighter credit means less spending and fewer jobs. Inevitably, those at the bottom of the income ladder are most vulnerable to all of those changes.
"Low-wage workers have had a difficult balancing act in terms of matching their expenses with their limited incomes," said Margaret C. Simms, director of the Urban Institute's Low-Income Working Families Project. "They are very limited in their ability to deal with an emergency."
In Romero's case, the emergency came in the form of the breakup of his family nearly two years ago. Until then, both he and his wife had worked, and the townhouse they bought in 1991 for $129,500 more than doubled in value over the years. But now, several home refinances later and with only his income to pay the rising food, gas and utility bills, he owes more than his house is worth.
More than half of those surveyed in the poll said their incomes had either gone down or stayed the same over the past few years. With their spending power falling, half said they had tapped savings or retirement accounts.
The decline in income during the past eight years, a period of generally robust economic growth and healthy business profits, is one of the most troubling mysteries of the new economy, and it has steadily eroded the standing of those not at the very top of the income ladder.
For Romero, 42, just paying for everyday items brings him to the financial brink, even though he has been steadily employed for more than two decades. Now a U.S. citizen, he started working as a dishwasher in a Capitol Hill restaurant when he arrived from El Salvador in 1985. Not long afterward, he started helping out in the kitchen and liked it.
He landed his first job as a cook a few years later, and after changing jobs a couple times in search of higher pay, he started in the kitchen at the Hilton near Reagan National Airport in 1994. Each workday, Romero wheels his 14-year-old Dodge Caravan into the hotel parking deck before sunrise. By 5 a.m. he is in the kitchen, preparing breakfast and room service orders and items for the morning buffet. Later, he makes lunch.