Folks on the edge pinched by rising prices

Teachers are postponing remodels and summer vacations. Retired seniors are picking up part-time work to cover mounting grocery bills. Unemployed workers are ditching gas-guzzling cars to search for jobs on foot.

As the prices of food and gas go up, up, up and confidence in the economy slides down, down, down, residents of the Sacramento region are cutting costs in hopes of riding out a wave of increasingly bleak economic news.

"I budget everything," said Dottie Perkins, a 44-year-old Natomas resident who was recently laid off from her job at the state Department of Corrections and Rehabilitation. "You do what you can."

This month, the state's Employment Development Department released the region's grimmest job figures in more than a decade: Unemployment in the Sacramento region was 6.4 percent in January, up half a percentage point from the month before.

At the same time, prices of many basic consumer goods have increased, sometimes dramatically. In California, unleaded regular gas averaged $3.61 a gallon Thursday, up 49 cents from the month before. Nationally, the average dozen large Grade A eggs went for $2.17 in January, 62 cents more than a year ago.

As prices go up and incomes don't, something's inevitably gotta give. Nonessential big-ticket items are often the first to go, especially for those who are uncertain about the stability of their jobs, said Jean Ross, executive director of the California Budget Project.

"You're not going to buy a new car, you're not going to buy a new dryer," she said. "You're going to sock every spare dime in your savings account in case you're going to have to live off your savings."

In the staff lounge at Starr King Elementary School in Carmichael, the walls are decorated with messages like "Smile" and "Don't quit." Faces grew long Wednesday as talk turned to the economy. Over salads and microwaveable entrees, teachers said they're avoiding dinners out, postponing remodels and cancelling long-planned vacations.

"It's too scary how much the other bills are going up," said Jackie Pope, 59, a third-grade teacher who commutes from Rocklin. "Everything over and above just seems extravagant now."

Although the district is cutting costs in tight budget times, Pope said she wasn't at risk of losing her job anytime soon. But Jay Stare, a 28-year-old physical education teacher, said he expected a pink slip this week.

Concerned about the shakiness of his income, he and his girlfriend have canceled cable TV and their home phone line. Stare has started brewing his own coffee and packing lunch. Next on the cost-cutting agenda: He plans to start biking the 15-mile round-trip commute from downtown.

"Who knows what will happen next year?" he said.

Experts offer conflicting accounts of how much rising prices and a shaky economy combine to affect people's spending.

Stephan Kroll, an economics professor at California State University, Sacramento, said people often say they're going to make changes to save money – drive less, cut back on groceries – but he's not convinced that's actually happening.

"They probably would like to and they say they do, but it really depends on the options they have," he said.

Rand Conger, a University of California, Davis, professor who studies how people respond to economic problems, said that once they cut out the nonessentials and charitable giving, they'll cut back on health and car insurance. But he expects people are also cutting back on driving and buying less food.

"Anytime you're going to have an economic downturn, these things happen," he said.

For seniors and others who depend on fixed incomes, the question becomes: How to cover the basics?

"You just can't make it anymore," said Bill White, 68, who coordinates the Hire-A-Senior program at Ethel Macleod Hart Senior Center in midtown. In recent months, he said, growing numbers of seniors have asked for help finding part-time work. He used to take appointments just one day a month; he's doubled that, but his sign-up list is still full.

White attributes the increased interest to high prices. He has cut way back on driving, and now asks a few dollars to drive elderly acquaintances to medical appointments and the grocery store. He used to do that for free.

Over in the ceramics room, 70-year-old Sharon Ramsay, who was glazing soap dishes and finger bowls, said she'd recently started working part time at the senior facility where she lives. Her Social Security check simply wasn't enough to cover the classes she takes at the center.

"If I hadn't got this job, I'd have to give up everything," she said.

Ramsay lives near the senior center and rarely drives. But her friend, Maria Goudeau, 61, said she's always worrying about the cost of gas. She's given up on new clothes and is careful to buy her food either generic or on sale.

At the Mark Sanders Career Center, over on 50th Street, those who have been squeezed hardest by the tightening economy comb through job listings each day.

Last week, John Lopez, 23, said he had left his job at Hertz after he was asked to transfer from Sacramento to Folsom. He said he couldn't afford the longer commute from south Sacramento, which he estimated would cost $100 a week. Now he'll walk miles looking for work, rather than get in the car. He hasn't gotten many calls back.

Kathy Boychuk, a staff member who works in the center, said her heart goes out to all the people she sees juggling mounting bills on diminished incomes.

"You just try to give them a little nudge and tell them 'You got to keep at it,'" she said.

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• Call The Bee's Jocelyn Wiener, (916) 321-1967.