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By Amy Ellis Nutt and Eric Sagara/The Star-Ledger

You stroll past them in the grocery store, sit behind them at the gas station, stand next to them at your kid’s soccer game. They look like you, talk like you, fuss over their children like you. They have skills and jobs like you, and they seem just fine.

They are security guards, child care workers, bank tellers and cashiers.

They are hairdressers like Racquel Cabrera of Manville, retired white-collar workers like Jim Mastrangelo of Ringwood, and teachers’ aides like Nancy Stephens of Caldwell.

But they are not fine. They live one broken transmission, one layoff, one illness away from ruin. And they exist in numbers you probably never dreamed of.

In an unprecedented new study, five years in the making, the United Way of Northern New Jersey presents a harrowing picture of the state’s working poor. The report, called ALICE (Asset Limited, Income Constrained, Employed), is a study of the true face of financial hardship in New Jersey, authored by Stephanie Hoopes Halpin, the director of the New Jersey DataBank at Rutgers University.

This is no rehash of government poverty statistics. It is, instead, a disturbing look under the hood at exactly what it takes to survive in the Garden State, who can — and cannot — make ends meet. A look at those straining and scraping to get by while living on the edge of financial collapse.

Consider:

• In the third-wealthiest state in the nation with the seventh-largest economy, more than a third of all households — 1.1 million — are unable to provide the basic necessities of food, housing, transportation, child care and health care.

• In half of New Jersey’s 566 municipalities more than 30 percent of households are below ALICE’s cost-of-living threshold.

• More than one in three seniors fall below ALICE’s threshold.

• And in Somerset County, the ninth-richest county in America, according to Forbes magazine, more than a quarter of all households don’t meet the ALICE threshold.

When Hoopes Halpin talks about the people behind the numbers, she says she sometimes stops and realizes how she’s "interacting with people that you think are fine and their life is actually really hard."

"There’s a stereotype of low-income people being lazy and milking the system," she said. "From what we see there’s a lot of people who are working very hard — one or two jobs for not a lot of money and they don’t have a lot of savings. These families have no room to make a mistake."

SCRAPING BY

Nancy Stephens is a divorced, single mother. She is also a paraprofessional, a teaching aide with a master’s degree in special education who works part-time in Mountain Lakes because she can’t get a full-time job. In her downtime, she tries to pick up extra work as a substitute teacher or tutor.

Take a tour of Stephens’ home, and you strain to find the story of her struggle. The two-bedroom apartment she shares with her 9-year-old son, John, sits above the David Chad Apothecary and Beauty Parlor in Caldwell. It is cramped, but comfortable, the hand-me-down bedroom set from Stephens’ parents is solid and sturdy, and books and family photos line a living room bookcase. But even with the sun skittering across the floor, there is a sense of heavy shadows nearby and a nervous tightness in Stephen’s face.

Talk to the 43-year-old mother and you learn why. Her annual income, she says, including child support, amounts to about $26,000 a year — $11,000 above the federal poverty level. The money coming into the household makes her ineligible for food stamps, but it’s not enough to make ends meet.

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HIGH COST OF LIVING

In a state with one of the highest levels for cost of living and lowest minimum wage (the federal minimum of $7.25 an hour), half of all jobs pay less than $20 an hour.

That’s not enough, says Joe Kunzmann, Somerset County Social Services director, who estimates a person living in New Jersey needs to make at least $25 an hour for a fair market rent apartment in Somerset County. Because Somerset is ranked among the top-10 wealthiest counties in the United States, according to Forbes magazine, its relative affluence drives up the cost of living for everyone. The Household Survival Budget for Somerset, as calculated by Hoopes Halpin, is $66,160 for a family of four.

"It makes it kind of harder for people that are just at the poverty level or above it to get by," Kunzman said. There’s this margin of error that is very slight. … If you’re making $12 an hour or $15 an hour and your car breaks down and you have to have it fixed and you need it to get to work, what do you pay? Do you have your car fixed or do you maybe not pay all your rent or do you skimp on your Public Service bill? A lot of people that we are seeing are people like that."

DEFINING POVERTY

Officially, New Jersey has done better than most states weathering the Great Recession. The state’s poverty rate of 10.3 percent is well below the national average of 15.1 percent, according to federal statistics. In fact, only four states had lower official poverty rates in 2010 (Alaska, Connecticut, Maryland and New Hampshire).

The problem, say economists and statisticians, is the calculations used to designate the official federal poverty level have not been updated for 38 years. The main problem: The Federal Poverty Level does not take into account differences in cost of living from state to state. In other words, whether you are single and living in Sioux Falls, S.D., (where the cost of living is 4 percent below the national average), or in Somerville, N.J., (where it is 25 percent above), the poverty threshold is the same: $11,170.

Even New Jersey’s own human services agencies don’t rely on the Federal Poverty Limit when calculating eligibility for assistance. Like the ALICE report, these agencies use 200 percent (sometimes even 250 percent) of the FPL.

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ALICE’s numbers are based on information from the U.S. Census Bureau’s American Community Survey, and when the official annual poverty levels from the federal government are adjusted for cost of living, a wide swath of struggling New Jerseyans are swept into statistical poverty.

"The idea was to build a really basic budget (to establish New Jersey’s real poverty threshold)," Rutgers’ Hoopes Halpin explained. "It’s really the basic level for each category, and in every county it was more than double what the (federal) poverty rate was when we finished."

The budget consists of five categories for household spending — housing, food, transportation, child care and health care. County-level estimates of how much should be spent in each category are based on data taken from federal sources — the Bureau of Labor Statistics, the Department of Agriculture and the Department of Housing and Urban Development.

This method provides a deeper look at the people in need, said John Franklin, chief executive officer of the United Way of Northern New Jersey, which commissioned the report.

"So much of our notion about people in need was based on folks who are homeless, the very poor, the very downtrodden folks, when there was clearly more to be understood about our community," Franklin said. "I’m not interested in creating programs that are going to help people once they are in trouble. I’m interested in strategies that are going to be more preventative."

Marie Scannell, the executive director of the Food Bank Network of Somerset County — located on Easy Street in Bound Brook — hasn’t heard about the report and doesn’t know the numbers. She doesn’t need to. She sees those numbers every day, as they walk into the food bank. Ordinary people, men and women and children, with nowhere else to turn.

"We all know the cost of living is really high here," Scannell said. "Folks just keeping a roof over their heads takes three-quarters of (their income) so what’s left for food and utilities?"

'WORST I'VE EVER SEEN'

After 30 years at the food bank, which consists of a warehouse and three pantries, Scannell says this summer was the first time the network actually ran out of certain foods.

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"We’re extremely low right now," she said. "We need canned meats — stew, Spam, hash. Also low on macaroni and cheese, pasta and spaghetti sauce, tuna."

Scannell is breathless, stumbling over words, until they run out.

"This last year — the worst I’ve ever seen," she said. "It’s overwhelming. It’s just … oh, gosh."

Approximately 750 families received 32,868 bags of food. With four months left in 2012, there are 850 families now on the food bank’s rolls.

"I see families, I just don’t know how they hang on. Some days we’re exhausted emotionally. Children running around with no socks, people crying. …Yes, it’s overwhelming."

Stephens, who lives in Essex County, grew up in Verona, worked all through college and carried no debt when she married. Today, she is a regular patron of the Caldwell food pantry, where she gets canned soups, pasta, cereal and My-T-Fine pudding packets.

"At holidays they give gift certificates to ShopRite, Target," she said. "I’ll save up for Legos for my son at Christmas."

THE PAIN OF 'NO'

Stephens’s soft blue eyes seem perpetually close to tears. Her voice is low, her speech rapid, as if she’s trying to get through the conversation without crying.

"My son asks, ‘Can we go get ice cream?’ No. ‘Can we go to the Funplex (amusement center in East Hanover)?’ No. I figure if I’m down to my last 20, I save it for gas."

The Stephens live across the street from Hog Wild BBQ, Bangkok Kitchen, a Domino’s Pizza, a Japanese restaurant and the Cloverland Tavern, but neither mother nor son has ever eaten at them. Instead, Stephens cooks macaroni and cheese for dinner, and if she’s lucky and there’s a sale at the market, a little chicken, too. She shops for her son’s clothes at thrift stores or buys them off clearance racks. When it comes to herself, she makes do without, she says.

Because of cerebral palsy, Stephens has trouble walking. Her right foot is a size 4 and her left a size 7. In the past, she would purchase two pairs of shoes. Now, can only afford one, so she buys a pair of size 7s and stuffs the right shoe with tissue paper.

What remains hard, she says, is not being able to be carefree: "Just being able to say ‘Let’s go shopping,’ or buy something for the home. … I can’t even measure for curtains. Everything has to be a strategy. I used to be a fan of cooking. My son asks for a yogurt. ‘Nope." Not unless it’s on sale or I have a coupon."

The lower-rung jobs of the past — pumping gas, washing cars, collecting trash — meant long hours and little pay, but they were steady, predictable jobs from which the working poor could always aim higher.

Today there are more lower-rung jobs than ever — teachers’ assistants, cashiers, home health care aides — only in this new world, inconstant and uncertain, there are not enough hours, nothing is guaranteed and the pay is still paltry.

In this world, every tomorrow could mean a tumble into financial oblivion, which is why Stephens shoulders her dread as best she can when she turns the key in her 13-year-old Camry with 181,000 miles.

WHEN SALARIES SLIDE

It’s just past noon on Saturday at Icon Hair Studio in Bound Brook and stylist Racquel Cabrera has time on her hands — too much time.

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In more than four hours, on the salon’s busiest day of the week, the cosmetologist has had exactly four customers. In the afternoon two more walk in, which means by the end of her shift, Cabrera, who is paid on commission, has earned a grand total of $61.20. With tips, her pay bumps up to $87.20 — before taxes.

Two years ago, the 36-year-old woman was a stylist at Salon Per Te in Piscataway, but when the business began to fail in 2009 she knew she needed to find another job. She had a daughter to support. A month after she joined Icon, Salon Per Te closed. Some of her regular clients came with her, but there remain vast spaces of white on her calendar.

"I used to be booked all day," Cabrera said. "People don’t get their hair cut as often, or get less color and perms. … It’s hard. I’m trying to find a second job so I can work here at night."

There was a time, says Cabrera, who has been a hairstylist since high school, when she could clear $1,000 a week. Now she’s lucky to clear $400 a week. Because her longtime boyfriend and the father of her 13-year-old daughter, Dominique, was laid off from Pathmark in North Brunswick when it closed two years ago, he lives with his parents. Cabrera’s mother, Yolanda, who worked as a hospital biller her entire life and is now on disability, recently moved in with her and Dominique.

"That’s why we live together," Cabrera said. "We can’t survive on our own."

Food stamps, collected through New Jersey’s Supplemental Nutrition Assistance Program, help. But between her pay and her mother’s insurance, the income isn’t nearly enough to pay for the small $1,800-a-month rental home in Manville, food, even back-to-school supplies.

Which is why last Friday morning, on her way to work at the salon, Cabrera visited the Somerset County Food Network.

"Okay, pick out some fresh bread, tomatoes," said Scannell, the executive director, after Cabrera registered at the front desk.

The bread, tomatoes and other fresh vegetables make up the first row of food at the warehouse. They sit in metal cages — eggplants, squash and peppers — next to depleted baskets of Tic Tacs and tiny bottles of Purell. In just the first 15 minutes the warehouse is open, clients stream through the door and swirl down the aisles: a single woman, a family of two children and one adult, a mother with her teenage daughter, an elderly man, and then Cabrera.

"It’s so hard, especially when you don’t know how much you’re going to make a week," she said later, as she loaded three food-bank grocery bags into the trunk of her mother’s car. "I can’t plan, I just work as much as I can."

A FATHER'S SACRIFICE

Jim Mastrangelo, 66, who lives in Ringwood, worked for more than 40 years as a hotelier and toward the end of his career earned in the low-six figures as director of marketing at the Radisson Lexington Hotel in New York City. A divorce in 2000, however, threw his life into disarray. Shane, his developmentally disabled adult son, chose to stay in New Jersey, with his father, in the house he grew up in.

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Moving would be too disruptive for his son, who is now 35, so Mastrangelo, in order to spend more time at home, left his New York City position to take a job as a hotel manager in Secaucus. The pay was less than half his previous salary.

"It was like going from Ruth’s Chris (Steak House) to McDonald’s," he said. But when he found it increasingly difficult to find proper daytime care for his son, Mastrangelo quit his hotel job and set up shop at home as an executive recruiter.

"I made a few sales, I made a few bucks," he said. "Over time I was getting away from that, not devoting enough time, but I couldn’t go back to being an on-property general manager."

Instead, in 2008 when he turned 62, he ran the numbers and figured he could take early retirement. The recession took its toll. Today, his Social Security and his son’s disability insurance can’t cover the property taxes, mortgage, food and gas.

"I’m in the hole each month, between $1,000, $1,500," he said. In two years, his savings will run out. To pocket some extra cash he worked as a Census taker in 2010 in Parsippany, at $11-12 an hour.

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In 1998, when Shane turned 21, he was eligible to live in a state-sponsored group home, but because so few of those beds were available, his name was added to a very long waiting list.

A few years ago, the state notified Mastrangelo that in lieu of a group home, where beds were still few and far between, it would award his son a cash grant, about $60,000, but there were restrictions on its use. It couldn’t be spent on food, for instance, or clothing.

"If my brother came over to take Shane anywhere, he could be paid $15 an hour," Mastrangelo said. "I can even get paid to be a foster parent, but not to take care of my own kid."

While the savings of a lifetime slowly slip through his fingers, Mastrangelo, an avid long-distance runner, has used the money to pay for a tutor and physical trainer for his son. The two often jog together along Ringwood’s suburban roads.

"I look ahead, like a runner," Mastrangelo said. "In my mind, if I can get through the next 68 months, then my mortgage is over, then I can start paying down that second line of credit. As long as I see a little light at the end of the tunnel, I try not to worry."

Note: The original version of this article said Racquel Cabrera currently earns about $400 per month. The actual estimate is $400 per week.

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