A Regional Economy Gone Sour

LINDA ARSENEAU is a single mother struggling to make ends meet for her six children. Although she owns her own home here and gets occasional assistance from relatives, she is finding it a challenge to feed and clothe her young family during New England's recession."We're not starving," she says. "I make sure there's always food on the table. I mean even if it's macaroni and cheese and hot dogs, it's food." Ms. Arseneau, who lives on child-support money, is forced to stay at home and take care of her 20-month-old son, Paul, who has been diagnosed as epileptic. Times are tough, she says, but she is reluctant to rely on additional outside help. "I am contemplating whether to go on AFDC (Aid for Families with Dependent Children) and food stamps, but I'm trying to hold out on that," she says. Ms. Arseneau's predicament is like that of many families in New England who are either struggling to stay off welfare or who are already receiving AFDC assistance and are now even worse off. The sour regional economy has left more people struggling to make ends meet than since the early 1980s; all six New England states have been hit hard with budget cutbacks, high unemployment, and a sagging real estate market. The recession's impact on low-income people has been dramatic, say economists. In the boom years of the 1980s New England made more progress in reducing poverty than any other region of the country but when the recession hit, those gains were lost. From 1982 to 1989, for example, the number of individuals under the federal poverty line in New England was reduced by approximately 28.5 percent, says Andrew Sum, an economist at the Center for Labor Market Studies at Northeastern University. In the country as a whole, the number of people under the poverty line fell by only 9 percent during that time. But in one year alone - from 1989 to 1990 - the number of New England residents considered poor increased by 28 percent while the number of poor at the national level increased by only 6.5 percent during that time. "After we made all that progress for seven years we're back up to where we were," Professor Sum says. But New England's poor made important gains during the 1980s. Real hourly wages rose higher than any other region in the country and in practically all sectors of the economy, says Sum. In addition, businesses offered employees more hours to work. All of these factors helped reduce the number of poor struggling at the lowest income levels. "The boom in the region was strong enough to raise incomes of the bottom fifth [income level] of families," says Katharine Bradbury, an economist at the Federal Reserve Bank in Boston. But the recession has wiped out much of that progress. Families headed by females who have little education have been hit the hardest by the region's high unemployment, says Sum. "Once they lose their job, then boom, they're right back on AFDC to get themselves going." Indeed poverty is increasing all over New England with the number of AFDC case loads increasing in all six New England states over the past year. "You do see an upward rise in the [AFDC] case load and that has to be attributed in some way to the state of the economy, says Mary Claire Kennedy, spokeswoman for the Massachusetts Department of Public Welfare. "We are seeing more people come to the system who have never been before and we are seeing more people applying for assistance for the first time." Some states have seen a more dramatic rise in case loads than others. In Massachusetts, the number of AFDC case loads increased by 11.6 percent from July 1990 to July 1991, while New Hampshire saw an increase of 30.7 percent in that same period. "New Hampshire lost about 10 percent of their wage and salary jobs from early 1989 to August of 1991," says Sum. "They've gotten really terribly crushed." Low-income families in rural New England are struggling as well. In remote areas in northern Maine, for example, many poor residents don't have transportation. Some are living in substandard housing with faulty heating systems, says Charleen Chase, executive director of Community Concepts Inc. in South Paris, Maine, a community-action agency that provides services for low-income residents. Ms. Chase finds an increasing demand for fuel assistance. "We are already booked with appointments through February," she says. "New people that want to apply for home energy assistance [will have to wait]." In addition, many of Maine's rural poor are hesitant to seek out the services available, she says. "People have been self-sufficient all their lives are finding themselves widowed and having to maintain an old house," she says. "It's hard for people who are in very rural areas to keep in touch with their neighbors. They're isolated and not seen on a regular basis."