WORKING HARDER, GETTING NOWHERE

By NANCY GIBBS

THE BILLBOARDS AROUND ORLANDO, Florida, call Kissimmee "the affordable place to live." Take I-4 south and look for the Disney World exit, then drive in the opposite direction. There, behind the souvenir shops and motels, live America's working poor. It's not a bad neighborhood. The lawns are mowed, and the kids can play safely in the street. Anybody who wants a job can find one: Orlando was one of the nation's top five cities for job growth last year, with 40,000 new positions. Only 10% of the area's residents live below the poverty line.

All this is small comfort to Terri Yates. Last year, working full time, she took home about $10,000 as a cabdriver. This year she expects to do better. But even with Terri working six-day weeks and her husband Philip driving a cab all seven days, they still can't scrape together a down payment on a house. Terri's 1985 Pontiac needs radiator and clutch work; Philip is still paying $160 a month on a 14-year-old Mazda pickup. "I'm making less money than ever in my whole life, and I'm working more," Terri says. "I have no life. The only thing that holds me together is my children. But I can't even afford to send my daughter to the dentist for a cavity." Terri is proud that she has never been on welfare, but she feels little kinship with the politicians who extol workers like her. "I feel lost," she says. "Now everything goes up but people's wages. Either you're rich or poor."

When Capitol Hill revolutionaries vow to lift millions of Americans off the dole and into the work force, this is where they would land first, among the more than 10 million Americans who hover one rung above welfare on the nation's "ladder of opportunity." These are people who tiptoe between paychecks and have no savings, who ride the bus to the discount stores, who sell their plasma until their veins scar, who don't bother to clip coupons for Cheerios because the generic version is still cheaper, and who can be wiped out by even a minor medical problem.

Last week their position looked more precarious than ever. The Labor Department reported that despite the exuberant stock market and mild inflation, real wages keep on falling. For the lowest-earning 10% of workers, the weekly paycheck averaged $225 last year, a 10% drop since the late '70s after inflation is taken into account. It means that more people than ever are working full time and still living below the poverty line of $15,141 for a family of four. Millions more are scraping by, just one broken refrigerator away from crisis. Says Labor Secretary Robert Reich: "If we don't take steps to begin to reverse the trend for so many workers who are sinking in this new economy, we will be paying a high price as a society."

WHAT TO DO

SUCH FIGURES WILL MAKE IT EVEN HARDER for politicians to tout the virtues of work over welfare. "We've got years of stagnant wages and people who are working hard and being punished for it," President Bill Clinton told a crowd of enthusiastic New Jersey autoworkers last week. "The question is, What are we going to do about it?" He talks cheerily about enterprise zones and community block grants. Republican Bob Dole talks about patience, while the Republicans set about shrinking government, shedding regulations and flattening taxes. "We've got to take a long-term view of this," he says. "I think we're on the right track. If we're not, I assume they'll throw us out." In the meantime the working poor work, and wonder what it would be like if the politicians had to walk in their shoes, just for a day or so.

CLOSE TO THE EDGE

IN ATLANTA, A QUARTER OF THE PEOPLE who call the homeless hot line are working people: schoolteachers, chefs, computer-maintenance men, airline flight attendants. The standard recommendation is that a family should budget 30% of its income for housing. Among the working poor, 70% is more typical. "It doesn't take much in the way of an unforeseen circumstance to spin these people right out of control," says Anita Beaty, director of Atlanta's Task Force for the Homeless. "You cannot pay rent and child care on minimum wage."

David Harris works from 3:30 to 11:30 p.m. at the Travelers Aid Society shelter in Salt Lake City; his wife Nancy Tillack works there from midnight to 8 a.m. This means that if they need anything more than a couple of hours of sleep, they are never together for more than an hour or so a day.

"When we're home, we have no real life," Tillack says. They take turns looking after six-year-old MacKenzie; at least they don't have to pay for day care out of their combined weekly income of $720. "It's hard on her," Tillack admits sadly. "She has our time when we're awake enough."

Soon after moving to Utah from North Carolina, they were homeless for three months. "It's payday to payday. If one of us gets sick, it would be trouble," says Tillack. "We both love our jobs. We feel useful and productive, but I don't think anybody has job security anymore. We work hard to make ourselves indispensable."

THE TAX CRUNCH

THE WORKING POOR MAY not expect much from the government, but at a minimum they wish the government would not make their hard lives even harder. But that is what happened in 1983, when a blue-ribbon commission headed by Alan Greenspan decided to "save" Social Security by hoisting payroll taxes to record heights. The employer and employee share of the payroll tax, which in 1960 was 3% each, for a total of $530 for people who worked full time at minimum wage, now stands at 7.65% each for a total of $1,352. Today more than three-quarters of American households pay more in payroll taxes than in income taxes. "We ought to let the working poor keep all their earnings until they reach a higher level of income,'' says Douglas Besharov, resident scholar at Washington's American Enterprise Institute. "But politically, it would be difficult to do, because if we lifted the payroll tax, it would become clear that Social Security is a form of intergenerational welfare.'' Instead, the earned income tax credit was supposed to provide relief. In 1986, when Ronald Reagan expanded the EITC, he called it "the best antipoverty, the best profamily, the best job-creation measure to come out of Congress." But now the Republican budget cutters have EITC in their sights.

Bernice Jackson can't fathom why politicians want to cut the EITC. They can't understand the hardship of a life such as hers "unless you've lived it,'' she says. "They can't just say we need to work harder and things will be fine."

Jackson lives in a small trailer home in Appomattox County, Virginia, with her disabled husband Virgil and their three children. For 17 years she has cooked and cleaned at a training center for mentally disabled adults; she brings home $1,000 a month, while Virgil's disability payments add $560. Credit cards are banned from the house; she is still ashamed of how they ran up a huge debt and had to declare bankruptcy. The creditors were so aggressive they came and demanded her engagement ring and Virgil's wedding band.

This year Bernice received a $1,000 refund from the EITC. Some years she needs the refund for emergency repairs. This time she indulged in a small luxury for herself; she bought a treadmill. "You'd be depressed if you didn't treat yourself sometimes," she reasons. "I work every night, and I still can't make ends meet." She knows that there are people on welfare who are collecting more than she does. "But I believe in earning my way." The family has no savings at all. Son Jodie just graduated from high school, but Bernice couldn't afford to buy his graduation pictures. The mantels are filled with trophies from the daughters' track meets; but it's a struggle to find the cash to send them to the events. "Sometimes I just have to tell my kids they just can't go," she says.

WELFARE VS. WORK

AN URBAN INSTITUTE STUDY CONSIDERED the case of a hypothetical Pennsylvania woman with two children who received $4,836 in AFDC, $2,701 in food stamps and $3,000 in Medicaid benefits, for a total of $10,537 in cash and benefits. If she took a full-time job at minimum wage, her family would gain $9,516 in earnings before taxes and lose Medicaid, AFDC and one-third of her food stamps. Moreover, she would have to find and pay for day care. Welfare recipients who take part in job-training and education programs are eligible for subsidized care; for the working poor, day care can consume half their take-home pay.

"They send these AFDC people back to school. How come we don't do that for the working poor?" asks Eloise Anderson, an African American who grew up in a poor neighborhood in Toledo, Ohio, and now heads the California Department of Social Services. "They made the same bad decisions, except the working poor usually live with their decisions; they go to work, they say, 'Hey, I blew it, but I'm working.'"

Heather Beck, 23, earns $1,200 a month at a machine shop in Spokane, Washington. She is the only employee left following layoffs last month. Heather handles everything from typing and filing to the actual machine work. Her rent and day-care costs alone total $1,000. Last month, she reports with great pain and embarrassment, she had to borrow $200 to pay her landlord. "It just about killed me to do it,'' recalls Beck. "I don't even know how I'm going to repay it."

She is on a 200-person waiting list for subsidized day care for her two children and has found little sympathy from other agencies. "They said if I wasn't living on $500 a month, they weren't going to do anything for me, and that's for a family of three!" says Beck. "My ultimate frustration that day was that their message was that it would just be easier to give up and go on welfare." Beck bristles at talk of getting people off the dole and into the work force. "The people that are really working and trying to succeed are the ones who get the least amount of help," she says.

As President Clinton likes to note, two-thirds of the nearly 40 million Americans with no health insurance live in families with full-time workers. A single illness or injury will plunge a family into crisis. Often health-care concerns override all others in determining whether someone stays on welfare or goes to work. Being poor means making choices: the phone bill or the gas bill? Cough medicine or snow boots? In hard times, health insurance is a luxury; you can't eat peace of mind. So when Briana Harris, 17, fractured her leg sliding into home in a softball game last month, her parents' pain was as real as hers. "We're going to be faced with incredible hospital costs," says Denise O'Brien, a 45-year-old mother of three. "We gave up our insurance last December. When income is low, health care is too expensive."

The family's dairy farm no longer provides enough income to support the family. Husband Larry Harris works in construction, where he makes $1,800 a month, and Denise earned $5.45 an hour last season transplanting flowers and vegetables in a greenhouse. She is searching for a full-time job and raising free-range chickens and raspberries in the meantime. She used to imagine that by this time in her life, things would be more settled. "I sat and wrote in my journal, 'Things are different in 1995,'" she says. "All of us are wondering what we're going to do. Life seems so precarious. But there are a lot of people in denial."

THE LEARNING GAP

IF YOU HAVE GRADUATED FROM COLLEGE, the chances that you will live in poverty are less than 2%, vs. almost 20% for those with only some high school. "We are seeing a higher correlation between education, earnings and benefits than we have ever seen in the history of this country," says Labor Secretary Reich. "If you are not educated and trained, technology tends to replace you." But it is little comfort to the working poor to be told they are victims of shifts in the global labor market and of advancing technology. What are they supposed to do? they ask. Follow the jobs to Thailand? Learn to use a computer?

"If I could do it all again, I would go to college, become a doctor," says William Robinson, who works three jobs in Appomattox County, Virginia. "Just, at the time, I didn't feel like going." He works six days a week, about 80 hours, for an annual income of less than $20,000. He studies traffic for the state transportation department, he stacks shelves at the local Food Lion, and he works as a medic for the National Guard. His wife is legally blind. Before the couple got married, she received a $265 federal disability allowance, but the subsidy was cut off because William earned too much. When all the basic necessities have been covered each month, the Robinsons are left with about $14.

He stands on the wooden steps in front of his double-width trailer home and looks proudly out over the mounds of stones and gravel that one day will be a circular driveway. "Just like rich people have," he says. Mary Robinson's grandmother sold the couple the two-acre plot of land for $500. "She offered to give it to us, but I wouldn't take it for free," William, 32, explains. It took him more than two years to pay off his elderly in-law in $10 and $20 installments; then he used the equity to borrow for the trailer. "It's taken so long to get this far. But we finally did it."

He is determined that his daughter Whitney, 7, will not take her education lightly. "She is already talking about going to college," says William. "I'm encouraging her to be a doctor. When I play Barbie dolls with her, we're always playing accident, and she is the emergency technician going to the scene.''

WHO'S TO BLAME?

LIBERAL CRITICS CHARGE THAT THE G.O.P. agenda is about to make the economic ladder even more slippery. "Republicans might actually be surprised to see that they are doing things that will provide less assistance to the working poor," argues Isaac Shapiro of Washington's Center on Budget and Policy Priorities, which is about to release a report detailing the impact of the budget proposals on low-income families. "They are talking of substantially reducing the EITC. They are opposed to an increase in the minimum wage. What's gotten lost in the message is that the programs that offer assistance to the working poor could be partially if not completely reversed by the new agenda."

As government training and education programs are scaled back, aspiring workers will have to rely on the private sector. Training Inc. is a national nonprofit group that helps people polish their job skills. This has given counselors like Bev Schroeder a window on people's dreams and expectations. She works at the Indianapolis branch. "When I do presentations, I'm struck by the number of people who ask, 'How much will I make at the end?' " she says. "I talk about process. They say, 'I can't take $7.50 an hour. I need at least $30,000 a year.' I say, 'What do you have now?' " The trainees talk about owning their own business someday. "You need a reality injection," Schroeder tells them.

For the past five months, Jerome Ash has spent every weekday at Training Inc. in hopes of breaking into what used to be known as the pink-collar ghetto of receptionists, typists and filing clerks. He spends game nights at Indianapolis' Market Square Arena, selling frozen drinks on a 15% commission. On his first night, during a hockey game, he made $13.05.

Along with 40 classmates, Ash spent three weeks in a simulated office, practicing how to answer the phone, send a fax, file a letter. His goal: a $7-an-hour job. "I want an office job dealing with the public." His dream? That one day, with a steady job and a nest egg, he will actually take a vacation.

THE PARENT TRAP

HARPER'S MAGAZINE PUBLISHED the response of Washington State Representative Marc Boldt to a letter from a constituent asking him to fight to preserve funding for the local family-education center. "If your situation is subject to so much financial instability, then why did you have three children?" he wrote back, expressing the concern of taxpayers. "Why is your husband in a line of work that subjects him to 'frequent layoffs'? Why, in the face of your husband's ability to parent as a result of his frequent layoffs, are you refusing to work outside the home? Why should the taxpayer foot the bill [for such education programs]?"

Being single and a parent is a good way to slip into poverty. Millions of single mothers know that, but it can be even worse to be a single father. Terry Younger remembers when he tried to get help in rearing his three children. "I've gone to some of these places, said I needed some help, and they just said, 'We can't help you; you're not a lady,' '' says Younger. "So it's double jeopardy, and I'm bucking the system."

Younger fixes appliances at the local college in Spokane for $1,200 a month and uses subsidized day care. The hardest part for him, he says, is saying no to his children. When they go to the supermarket, the kids put cereals and other treats in the shopping basket, and Younger has to take them back out. "You learn to shop by the sales--last week I found a sale on cream-of-mushroom soup, so instead of three cans, you're buying 10 or 12 because you know the price is going back up again." He explains, "I want to be a role model. I don't want my kids to grow up thinking that things in life are free."

There may be 10 million working poor in this country, but many of them say they are too discouraged to go out and vote, so it's easy for politicians to ignore them. Many millions more, however, are perched near the bottom of the middle class, worried about what would happen if their jobs were eliminated, or they got sick, or for some reason lost their homes. In the campaigns to come, the politician who can speak to these fears will unleash vast political energy for good or ill.

--Reported by Cathy Booth/Miami, Ann Blackman and Ann M. Simmons/Washington, Dan Cray/Los Angeles and Elizabeth Taylor/Indianapolis

With reporting by CATHY BOOTH/MIAMI, ANN BLACKMAN AND ANN M. SIMMONS/WASHINGTON, DAN CRAY/LOS ANGELES AND ELIZABETH TAYLOR/INDIANAPOLIS