Page last updated at 11:15 GMT, Tuesday, 3 August 2010 12:15 UK

The plight of America's new poor

Ben and Coral are amongst the ranks of the US unemployed slipping towards poverty

The economic recovery in the US has stalled and for the 15 million unemployed Americans, the land of opportunity seems anything but. Almost 50% of the unemployed have not had a job for at least six months, double the level of previous downturns. Newsnight's Peter Marshall witnessed the effects in Nevada - the state with the highest unemployment level.


"Three years ago we had good jobs and comfortable lives," explains Ben Costiloe, as he and his wife, Coral, show us around their beaten-up trailer in the Nevada desert - a few miles outside Reno.

Inside the trailer it is cramped and the heat is stifling. Yet the couple are grateful to at least have somewhere they can call home.

"I grew up in a comfortable middle-class family," says 57-year-old Coral. "I never dreamed I'd be as close to homeless as we were last year. I never dreamed I'd be close to homeless - ever."

Ben and Coral Costiloe in their trailer
Ben and Coral Costiloe lost their jobs and cannot afford to rent

Unemployment has pushed the Costiloes to the foot of the property ladder. When they both lost their jobs and were unable to find new ones, even renting a place in the city became unaffordable.

So Ben, 47, salvaged, then patched up, the tiny trailer that a relative had already abandoned for scrap.

"At the time this situation fell on us like a tonne of bricks. We had to make drastic moves that could preserve our ability to stay alive," Ben explains.

Relying on charity is another such move. I first met Ben and Coral queuing for free food at a church in a suburb of Sparks, near Reno.

Deteriorating health

But the Costiloes are not alone.

Many among America's middle class have joined the ranks of the unemployed who are now slipping towards poverty. Those who donated in the past are now the ones asking for help.

The Food Bank of Northern Nevada, which works with charities and federal programmes to distribute food, says 124,000 people, including 50,000 children, have received free food in the region in the past year. A figure three times higher than before the downturn.

We've always been the ones giving, now it seems we're the ones who are getting
Stephanie Hess

For the Costiloes, the situation is becoming increasingly desperate. Ben is a type-one diabetic and his health is deteriorating, and his healthcare costs are spiralling. Meanwhile, Coral's daily search for new work is proving fruitless.

Yet, the couple remain remarkably sanguine about their situation.

"We're learning more every day - more about the plight of people with less," Ben says after receiving two bags of free food, including bread, baked beans and cereal. "I'm ashamed I didn't give them more thought before. Because now that's what I need."

The couple's story echoes that of Nevada's itself. From the gold rush of the 1870s to the legalisation of gambling in the 1950s, the state has always attracted migrants in search of riches and a better life.

Ben and Coral's misfortune was to head west from their home in Texas at a time when the modern-day gold rush of the past decade was about to end.

Nowhere in the US boomed like Nevada, and then fallen so far so quickly.

A wave of sub-prime foreclosures (the start of the process of repossession caused by defaults on mortgage repayments) helped trigger the recession. Now more victims of that recession are bracing themselves to lose their homes as well as their jobs.

Unemployment here is now at 14% - the highest rate in the nation, and the rate of foreclosures is also higher than elsewhere.

Cookie-cutter homes

A mile from Ben and Coral's trailer park, across rattle snake-infested shrub, is a slice of suburbia.

Cookie-cutter homes with manicured lawns, built at the height of the boom in 2006-07, sold for $300,000 (£190,000). Now they are on sale for $125,000 (£79,000). And it is thought it will take at least a decade, maybe two, for the market to recover.

Vince and Stephanie Hess
Vince and Stephanie Hess need state assistance to feed their family

Vince and Stephanie Hess are one of the many middle-class families caught out by the downturn, depsite not buying a sub-prime shortcut to the American Dream during the boom.

A decade ago they purchased a 10-acre plot in the hills high above Reno. Little by little they saved their money and built a home from the foundations up while living in a caravan. They had no credit card debt, just a $320,000 (£202,000) mortgage.

Now they and their three daughters have been forced to move out. The bank foreclosed on their mortgage and is short-selling the home that they built, for 40% less than what Vince and Stephanie borrowed.

Forty-nine-year-old Vince is an iron worker who helped build many of the state's casinos and hotels. But when work dried up in 2008 everything fell apart.

"I've never been out of work this long in the 30 years I've been doing my profession. This is the worst I've ever seen it," he says.

Although the couple asked the bank to modify their loan so they could pay less on their mortgage until the economy recovered, their request was rejected.

"They said for a year they'd work with us and then just a couple of months back they told us no," explains Stephanie, 44.

She is angry that money from the taxpayer-funded bailout of the banks is not being used effectively to keep families like hers in their homes.

Food stamps

"[President] Obama apparently passed something where it was going to help the small people like us. And it went to the banks - the banks took it and they just keep asking for more and more. And we never saw a penny of it. Nothing - no help," she says.

The Hess family has never asked for help before. They have always relied on themselves rather than the government. Yet now it is Vince's unemployment benefit that pays for their small rented home in Lake Tahoe, an hour away.

And Stephanie needs state assistance to feed her family.

"It's not food stamps any more - it comes in a card so you're not embarrassed at the grocery store," she explains.

"We never had to get anything like this. We've always been the ones giving, now it seems we're the ones who are getting."

She adds: "You know, it's hard to ask for help but when I've got kids I don't care, I put all that aside."

Watch Peter Marshall's film from Nevada in full on Tuesday 3 August 2010 at 10.30pm on BBC Two, then afterwards on the BBC iPlayer and Newsnight website.



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