Second of three parts

WATERLOO -- When third shift ends at 7 a.m., the grocery night stocker would like nothing more than to crawl into bed and get some much needed rest. But Perry Berger's children want to play, so sleep waits.

Berger, of Waterloo, works third shift at a local grocery store and makes $10.25 an hour. The combination of odd hours and low pay are taxing on him, his wife, Jolene, and their two children.

Katie and Todd Clarke of Parkersburg know the feeling. The paycheck Katie earns on $10.90 an hour as a secretary isn't enough to cover all of the family's expenses. Food takes priority; money left over goes to whichever bill collectors threaten to cut off services first.

"There's no way to pay it all," said Katie Clarke. A mental illness keeps Todd from working.

The Clarkes and Bergers are like thousands of Iowans who work hard without getting ahead. Many of these families will cover their basic monthly expenses and have little, often nothing, left over. Most are white, between 19 and 64 years old. Many have a high level of education, and they're often single women.

People who are working and poor often make more money than the federal poverty guideline -- $19,350 for a family of four. That's $9.30 an hour, or $4.15 above the federal minimum wage, disqualifying them from receiving food or housing assistance. Still, most don't complain.

"You live on what you have, and what you have, it takes to live," said Kathy Schunk, 46, of Cedar Falls, a single mother of a teenage daughter, who works overtime as a nurses' aide any chance she gets, just to make ends meet.

As the cost of living has increased, the wages of low-income workers has seen little improvement, or declined. The price of necessities like groceries and other goods has jumped, as has the cost of renting or buying a home.

Nearly 29 percent of Iowa's population, and 31 percent of Black Hawk County, work at jobs that pay just enough for them to cover their basic expenses.

The working poor emerged as an identifiable income group in the early '80s, shortly after the U.S. economy's recession in 1980. When the job market improved, employers had new demands of potential workers. They wanted more skills, more education -- something that people on the cusp of poverty can't always afford.

Today, there are more part-time jobs, most in the service sector, and jobs that offer sporadic rather than continuous employment. That is unlikely to change anytime soon, experts say.

Perry and Jolene Berger work one full-time and three part-time jobs between them to support their family of four.

"We're working hard," said Perry Berger, 46, "but we're in the cracks."

'Can I really afford this?'

When every penny counts, a $4.49 T-shirt is pricey.

The thought circulates through Anna Nielsen's mind as she scans the clothing racks at a local consignment shop. Her children have outgrown all their pants and many of their shirts. She immediately considers any item with a yellow dot, which is the half-price indicator on Saturdays, while anything marked more than $4 is rejected.

Nielsen, a single Waterloo mother of 3-year-old twins, hovers just above the poverty line making $8.50 an hour as a secretary at a job placement agency. A former job, from which she was laid off in August, paid her nearly $2 an hour more. It was on her former salary that she bought a home; she's still responsible for the $570 monthly mortgage payment. She checks the balance of her bank account daily, and thinks about money constantly.

"It never goes away. It's always in the back of my mind," Nielsen said. "I see pants for $3, a shirt for $4, and I think, 'Can I really afford this?'"

Margaret Nichol, 47, a substitute teacher in Waterloo, earned $20,000 last year -- more than she'd ever earned -- by working also as a janitor at night and a Navy reservist one weekend a month.

With such little income, she saves money any way she can. The La Porte City mother of two young girls makes meals from scratch. At the grocery store she picks from the lower-priced items on the bottom shelves, rather than the higher-pried items stocked at eye level.

"I can squeeze a penny until Lincoln cries," Nichol said.

Those who are working and poor often can't save for emergencies or the unexpected. Debt mounts easily with no savings or excess income as a cushion.

Being unable to pay for the basics is an emergency, so many turn to credit cards. What starts as a quick solution can become an overwhelming problem.

Maria Halstead, a secretary and mother of three, started using credit cards to pay for holiday gifts and occasional groceries. She and her now-estranged husband racked up $10,000 of debt on seven credit cards, using them for nearly everything.

The debt is like an infection, spreading to other areas of her life. For instance, she can't afford to get a divorce, yet she makes too much to qualify for legal aid.

For most of the year, there's never enough money to go around. At tax time, however, people like Katie and Todd Clarke, the Parkersburg couple, get a short respite from their debts when their income tax returns arrive in the mail.

"Every year, we can't pay our bills, they stack up up up, then our tax refund comes and we pay them off," Katie Clarke said. "Then we start all over again."

'I'll be paying this off for years.'

When people like restaurant cook Shad Paxton work jobs that offer health insurance that's unaffordable on a low hourly wage - for Paxton that's $8.50 an hour - or offer no insurance at all, medical problems left untreated can balloon to serious conditions.

The high cost of health insurance is the most often-cited reason the uninsured don't have coverage. Those without health insurance are much more likely than their insured counterparts to postpone care they need, according to the Kaiser Commission on Medicaid and the Uninsured.

Those without health insurance are more likely to encounter medical bills that have a major impact on them or their family. They're also less likely to stay employed. According to a report about low-income families, workers in full-time jobs that provide health insurance had an 80 percent chance of keeping a job for more than 18 months; those without insurance had only a 52 percent chance.

Studies show most Americans feel it's important to offer more people health insurance, though there are misconceptions about who the uninsured are. About half of the public incorrectly believes the uninsured are unemployed, and doesn't realize the uninsured are more likely than the insured to have a hospital or emergency room visit that could have been avoided.

For Paxton, an untreated toothache turned into several abscessed teeth, which needed emergency surgery in December. The cost: $18,000.

"The specialist who spent five minutes with me cost $350," he said. "The odds are, I'll be paying this off for years."

The Bergers, who didn't have health insurance when their second child was born, are still paying bills from the pregnancy.

As employers that do offer health insurance increasingly shift the burden of costs onto their employees, a recent study by the Washington-based Center for Studying Health System Change, found that more low-income workers than ever before are willing to sacrifice their choice of doctors to save on out-of-pocket costs.

Education isn't immunity

Even those who are working and college-educated aren't immune from financial struggles. Nichol, of La Porte City, earned a graduate degree in social work and a bachelor's degree in education. Despite taking classroom assignments as a substitute teacher she can't find steady full-time work locally in either field.

Part of the problem, economists say, is the jobs being created are overwhelmingly concentrated in low-paying industries, and the national economy will probably continue to depend on these service-based jobs for at least the foreseeable future.

For example, occupations that added the most jobs in Iowa between 2000 and 2003 paid an average $27,000 annually compared to $48,000 by occupations that lost the most jobs, according to an Iowa Policy Project analysis.

Iowans with a college degree typically make $12 an hour more than those with only a high school diploma. Wages are even less for those without a diploma or equivalency certificate.

Nielsen, the single mother of young twins, started college but never finished. The degree would mean a bigger paycheck, but as a single parent, going back to school means either higher child care costs and less family time, or full-time classes, collecting welfare and taking out student loans. She already has maxed out her only credit card and can't afford more debt.

Even if Todd Clarke -- who has several associate's degrees -- was able to supplement his wife's salary with an income of his own, odds are his wages would be devoured by child care expenses.

The Bergers crunched the numbers and found that if Jolene returned to work full time, her entire income would be used for child care. She chooses to work only part time instead, spending time with her children to avoid paying a sitter or day care.

'Just so backwards'

Much less assistance -- with things like housing, education and health care -- is available for working families living just above the poverty line than those living below.

Some agencies that provide food assistance make their income guidelines more generous to help more people. That's important because experts say the official yard stick of poverty -- the federal poverty guidelines -- is decades outdated, and today's families need more money to survive.

"I don't think they've ever been accurate," said Barb Grant, director of Operation Threshold, which specializes in housing and energy assistance.

The Northeast Iowa Food Bank has served twice as many people since expanding its guidelines in 2000, said Barb Prather, executive director. The pantry now sees 1,000 families a month.

When Nielsen was laid off from a previous job, she collected unemployment for 10 weeks before finding her current job. She went to the Iowa Department of Human Services to inquire about Medicaid, where a caseworker suggested she'd be better off not working -- that way she'd qualify for more help.

"The fact that anybody could suggest that is just so backwards," Nielsen said. "Here I am, making things better for myself; my kids are seeing me work."

Katie and Todd Clarke sat at their kitchen table recently to pay the monthly bills. As they leafed through envelopes, two of their three young children sat on their laps. Michael, 3, and Stella, 1, tossed the scattered bills and watched the pages float back down like fallen leaves, not yet grasping what the black words and numbers mean.

"I won't be able to send my kids to college. I won't be able to buy them a car when they turn 16," Katie said.

"Our biggest concern is what's the future going to hold for our children," she added. "I'm worried about their futures more than mine."

When there's not enough money to go around -- that's most months -- thoughts of their family and their happiness together keep Katie and Todd going.

"What sustains me is life -- knowing that we're alive, we are living, we have to go on," said Katie Clarke.

"We'll make it somehow," Todd said.

"We will," Katie added.

Contact Stacey Palevsky and Adam Morris at (319) 291-1580 or stacey.palevsky@wcfcourier.com.

Coming Tuesday: The Courier takes you inside the Statehouse with a closer look at legislation that affects low-income Iowans: the minimum wage and economic development initiatives.