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A Paycheck Away; Search for Missing Mt. Hood Climbers Continues
Aired December 16, 2006 - 22:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Well dressed people in good jobs are one paycheck away from homelessness.
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CAROL LIN, CNN ANCHOR: Are you one of them? Look around your neighborhood, your workplace, your world. People living just a paycheck away.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Homelessness does not disappear. It does not disappear. It is always on the back of your mind. I can't do that anymore.
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LIN: A job layoff, an injury, circumstances spiral out of control. Even forcing a war veteran to sleep in his car.
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UNIDENTIFIED MALE: I'm disgusted and it's not because I'm a veteran or a soldier or somebody who served. That means nothing. We choose to go. No one forced us to go. I'm just saying you should be treated like a human being for God's sake. That's all I want.
(END VIDEO CLIP)
LIN: It doesn't have to happen. We've brought in the experts to get your finances flowing. All in the pursuit of happiness.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: In your darkest days, when it is all on the line, the only person you can count on is you.
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LIN: His life story unfolds on the big screen. But you'll meet the real Chris Gardner in a rare primetime interview tonight. "A Paycheck Away" coming up right here in the CNN NEWSROOM. Welcome to the CNN NEWSROOM, your connection to the world, the Web and what is happening right now. I'm Carol Lin. You've been busy today so let's get you plugged in.
Starting with the headlines.
Air Force rescue crews will fly all night long scouring Oregon's Mt. Hood for three climbers missing more than a week.
A quick update from our Chris Lawrence, he is standing by the rescue command center. Chris?
CHRIS LAWRENCE, CNN CORRESPONDENT: Well, Carol, the helicopters, the Chinook and the two Black Hawks have been grounded because of the darkness but that C-130, that military plane will continue to fly all night over the next 24 hours. In fact, its infrared capabilities overnight and into the early morning, might be the best opportunity because -- to find those hikers because other objects that normally give off a heat signature will have cooled down by then.
Today, earlier today, some of the ground crews got as high as 10,600 feet, just a few hundred feet from the summit before the weather pushed them down. They face some pretty fierce conditions out there. Swirling winds, deep snow, soft snow that they had to wear skis and snowshoes to get through. But again they are continuing and will continue throughout the weekend. The family was out here today to congratulate them and encourage them, to tell them that they are in their prayers and they do appreciate the risk that they are taking up on that mountain to find those three missing hikers.
Carol?
LIN: Chris, and we understand that the mood is still pretty positive that these guys could be alive.
LAWRENCE: That's right. Everybody is saying that there is still a chance. That these are experienced, professional hikers, they know what to do up thee and they are treating this as a rescue mission.
LIN: All right.
Chris Lawrence standing by the scene close to Mount Hood. Thank you.
Also, 20,000 troops, maybe more to Iraq. That is the number military and budget advisers are looking at. They're drafting a proposal for President Bush to ponder.
And Houston, we have got a slight problem. Shuttle astronauts spent a few hours outside the International Space Station. They pushed and pulled and shook the partially retracted solar array trying to free up a stuck wire. It's still stuck. They will try again Monday.. The mission will very likely be extended a day.
And congratulations to you. Yes, you. You are "Time Magazine's" person of the year. What? Well, the magazine decided that the online explosion of surfer generated content like MySpace, YouTube and millions of blogs made you the world's most influential person. You will even see yourself on the magazine's mirrored cover.
Those are some of the big stories today but right now, we are going to bring you a special report. Sixty-five percent of Americans are living paycheck to paycheck during this season, many are choosing between holiday presents or putting food on the table. How can so many hard working people -- yes, I said hard working people -- end up on the streets?
There are 3.5 million homeless people according to the National Coalition for the Homeless. Tonight, we bring you their stories from New York to Los Angeles. The nation's capital to Jeffersonville, Indiana. Plus we will tell you ways to keep yourself out of the red. All in this special hour of the CNN NEWSROOM.
Now let's start with a family who did everything right to live the American dream yet went from homeowner to homeless. CNN's Deborah Feyerick looks at one woman's struggle to get back on her feet.
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DEBORAH FEYERICK, CNN CORRESPONDENT (voice-over): On a cold December afternoon, Julia Smith and her 12-year-old son Michael walk past the three bedroom home that used to be theirs.
JULIA SMITH, LIVING PAYCHECK TO PAYCHECK: I miss it. I do. I miss the people. I miss the neighborhood. I still have friends that live here. And I do miss it. You know, I'd be a fool not to.
FEYERICK: Smith and her son live in Jeffersonville, Indiana on the banks of Ohio River across from Louisville, Kentucky. The locals call it the crossroads of America.
SMITH: It's not the big city, but it's not country bumpkin either. It's just down-home folks.
FEYERICK: There are close to 29,000 people living in Jeffersonville. More than four percent of them are homeless. Even some with jobs.
SMITH: Mom does not have it well.
FEYERICK: Smith, a high school graduate lost everything three years ago following an on the job welding accident that left her badly burned. She ultimately lost her job and her home.
SMITH: Every time I dropped that hood and started welding I just would shake from head to toe and I would break out into sweats. I ended up having a nervous breakdown. And that's why I was -- basically that's why I'm no longer employed there.
FEYERICK: Smith's situation is not uncommon. According to Barb Anderson who has devoted her life to fighting homelessness.
BARB ANDERSON, DIR. HAVEN HOUSE SERVICE: In our community we have a lot of working poor people. Fully employed, $6.50 an hour is their average wage. So they rob Peter to pay Paul until they can't afford Peter or Paul anymore and they end up in our shelter.
We will have two or three families sometimes in one room.
FEYERICK: Anderson runs Haven House, a shelter, she says, that's way over capacity. A common problem in rural areas.
ANDERSON: We're the only shelter in a two hour radius between Louisville and Indianapolis that accepts people for longer than three or four days. So we get people from all over the southern part of the state.
FEYERICK: After finding a new job as a security guard at a local hospital, Smith was able to move into a Haven House apartment which costs $450 a month. She pays 30 percent of her salary and works hard doing odd jobs in order to lower rent and build for the future.
SMITH: It can happen to anybody. I am a good example of that. I had a home. A nice home. I mean, it wasn't a big mansion on the hill, but it was nice. A place I could come home and hang my hat and say hey, I'm home. And things happen, it just didn't work out for me.
Where did he move the capital?
FEYERICK: Smith says everything she does is for one reason. The love of her son.
SMITH: He is the most important thing in my life. He is the reason that I do anything. He's my everything. He's -- he's why I get up in the morning.
FEYERICK: Her wish for the holidays?
SMITH: I will have a home. It may not be next year. It will be soon. I will have my own home. You can mark your calendar on that. I just don't know what date yet. But I will. I will have my own home again. Something that I can leave to my son.
FEYERICK: Deborah Feyerick, CNN New York.
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LIN: Now we want to hear from you. Based on our paycheck to paycheck theme, tonight why do you think this happens to Americans? Give us a call at 1-800-807-2620. We are going to air some of your responses later this hour. But first ...
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UNIDENTIFIED FEMALE: You just should never take for granted what you have. Because you never know when one day you don't have it anymore.
(END VIDEO CLIP) LIN: She knows firsthand. Now she's trying to make sure that her daughter keeps a positive outlook on life. And this mother found herself living on skid row and now she's taking forward steps with no chance of sliding back.
(BEGIN VIDEO CLIP)
WILL SMITH, ACTOR: Hey.
Don't ever let somebody tell you you can't do something.
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LIN: Will Smith captures the struggle of Chris Gardner who slept in subway restrooms fighting to raise his son and survive as a homeless man. Where is the real life Chris Gardner now? He will talk to me later in this NEWSROOM special report "A Paycheck Away."
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LIN: Thirty percent of homeless are adults with children. Tonight, we're focusing on living paycheck to paycheck and how when you miss one, how things can spiral out of control. So what would happen if your mortgage or rent increased? That's what sent one woman and her children on to the streets of Los Angeles. CNN's Peter Viles reports.
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PETER VILES, CNN CORRESPONDENT (voice-over): When CNN first met this single mother of four back in June, we will call her Mary, she was homeless living with her children in a shelter a block away from skid row in Los Angeles.
MARY, FORMERLY: HOMELESS: How am I going to get out of here?
VILES: Since then, Mary has answered her own question. She has found a job in home health care and a new home, living temporarily with friends.
MARY: I still don't believe I was there. In a way, it's kind of like you know it's a dream that you don't want to remember.
VILES: Her nightmare began with a rent increase. Last spring she could afford $900 a month but when her rent was jacked up to $1200, she couldn't pay it. She lost her apartment which meant she also lost her job caring for children there. The shelter wasn't perfect but it was so much better than living on the street.
MARY: You know what, I may not have liked the food and I may have not liked this or this was OK this was good, but it was shelter. You know, you didn't have to be one of the people on the street. With your kids. So it was a good thing.
VILES: The Union Rescue Mission rescue sees lots of cases like Mary's. Families squeezed out of the unforgiving Los Angeles housing market where the median home price is just over half a million dollars.
ANDREW BALES, UNION RESCUE MISSION: In Southern California with high rents, it's two parents working as hard as they can to keep afloat financially. If one parent leaves or if a catastrophic illness comes or you don't have enough job skills to get a good paying job, you're often one paycheck away from homelessness.
VILES: Mary's emotions are raw. She broke down in tears when we sat down with her. She's not sure at the she can find an apartment that she can afford. Her budget is still $900 a month and she doesn't want to go back to a shelter.
MARY: Homelessness doesn't disappear. It does not disappear. It's always in the back of your mind going I can't do that again.
VILES: Peter Viles for CNN Los Angeles.
(END VIDEOTAPE)
LIN: So you might say, was it their fault? Did they borrow too much, spend too much? Here's a profile.
(BEGIN VIDEOTAPE)
LIN (voice-over): Homelessness is defined differently depending on what federal agency you ask. Generally a person who is homeless is someone without a fixed or regular nighttime residence. The National Law Center on Homelessness and Poverty estimates on any given night in this country, anywhere from 450,000 to 2 million people are homeless. And as many as 3.5 million people are likely to be homeless at sometime in a given year. That's almost the population of Los Angeles.
ANITA BEATY, ATLANTA TASK FORCE FOR HOMELESSNESS: We think that the people we know are homeless are the type have tip of the iceberg because so many other folks are living with other people or living hopefully invisibly in abandon buildings or sometimes camping out in the woods or sometimes in motels.
LIN: One of the fastest growing segments of the homeless population is families with children. A survey of 24 U.S. cities last year found families with children make up a third of the homeless population.
The National Coalition for the Homeless and many organizations dealing with children with families with children cite the lack of affordable housing as a principal cause of family homelessness along with stagnant wages.
The Economic Policy Institute says the real value of minimum wage today is 26 percent less than in 1979. The average American would have to earn three times the minimum wage to afford a two bedroom apartment. The U.S. Conference of Mayors has found homelessness increasing between 11 and 19 percent each year.
(END VIDEOTAPE) LIN (on camera): Now to another story that will touch your heart. From the battlefield to life on the streets. Thousands of U.S. military veterans return home, some with nowhere to go.
Anderson Cooper talks to one who calls his car home.
And later Lou Dobbs takes on the advocates and critics. And yes, he is going to tell you who to blame. All this and more when "A Paycheck Away" continues. Right here in the CNN NEWSROOM.
And don't forget tonight's last call. Why do you think this happens? Give us your opinion at 1-800-807-2620.
(COMMERCIAL BREAK)
LIN: Back to our special report on people living paycheck to paycheck. Serving his country meant financial ruin for Joe Raicaldo. He did all that he was asked, but that doesn't matter when you're battling fate. A veteran, suddenly at war with his own pride. Here's CNN's Anderson Cooper from Long Island, New York.
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ANDERSON COOPER, CNN HOST (voice-over): There are two things National Guard Corporal Joe Raicaldo never dreamed he'd see. The sun setting over Iraq and the sun setting over his '98 Plymouth, the car he now calls home.
JOE RAICALDO, HOMELESS IRAQ WAR VETERAN: I never thought that after the ball was dropped, you're out here. I never thought I would be here.
COOPER: The long road to get here a parking lot in Jones Beach, New York, began two years ago in Iraq.
(on camera): You were in this sling here.
RAICALDO: Actually on that top piece. The gun tower.
COOPER (voice-over): Joe was the gunner in this humvee with his vehicle took a sharp turn and flipped. His body was nearly crushed underneath.
RAICALDO: I just remember I couldn't move anything, I couldn't breathe. I was bleeding and I felt blood all over me and my face. I squeezed out the words, you better get a medevac fast because I thought I was dead.
COOPER: Joe suffered traumatic brain injury, broke his back, broke all his ribs and shattered his left arm. He was unconscious for days.
RAICALDO: They told my sister, they would fly her out there because I wasn't going to make it.
COOPER: But to the surprise of his own doctors, he survived. Over many months, doctors pieced him back to together using metal rods and crews to fuse his spine and metal plates to hold his shattered arm together.
(on camera): You've got a lot of metal in you.
RAICALDO: Lot a metal. You could probably build a small Eiffel Tower with that hardware.
COOPER (voice-over): Today, every step hurts but Joe remembers when he could run on this beach for miles.
RAICALDO: Me and my friend used to go eight miles that way.
COOPER: Joe can't lift more than ten pounds so he couldn't go back to being an auto mechanic. Instead he took a job with the National Guard patrolling Penn Station in New York. He says he lasted six months before landing in the hospital again with back pain and a bone infection.
RAICALDO: At that point I gave up. I simply gave up. I know I can't work. I have no income coming in. I'm finished.
COOPER: What he coming in was $218 a month from a disability check, so it wasn't long before Joe at age 50, ended up homeless.
RAICALDO: This is my clothes closet here.
COOPER: The trunk is your closet?
RAICALDO: Forgive me, the maid never showed up this morning. I ought to fire her when I get a hold of her.
COOPER: Joe says he has looked for part time work with no luck.
He has one sister and a few friends who have offered to help and he's too proud to accept it and too proud to stay in a shelter. So he spends most days alone, a stranger in his hometown of Hicksville, New York on Long Island.
One possible reason for his withdrawal, Joe was recently diagnosed with post traumatic distress disorder.
RAICALDO: I just don't belong. I don't feel I belong anywhere around here.
COOPER: Joe is one of an estimated 600 homeless veterans from Iraq and Afghanistan. That's not many compared with the 200,000 or so from all wars who are currently homeless. But these vets are showing up even more quickly than after Vietnam. A war that left nearly 70,000 homeless, and even greater number than died in combat.
CHERYL BEVERSDORF, NAT'L COALITION FOR HOMELESS VETERANS: If the experience with Vietnam is any predictor, I am very worried about numbers of homeless veterans where people at risk of being homeless who are returning from Iraq and Afghanistan.
COOPER: The Department of Veterans' Affairs is working to avoid a repeat of what happened after Vietnam.
JIM NICHOLSON, VETERANS AFFAIRS SECRETARY: There was a delayed effect with a lot of veterans after Vietnam. We know that, we've studied it, we've learned from that so that's why we're trying to intervene now. Right away.
COOPER: The V.A. spent more than $1 billion on homeless programs last year but some veterans still fall through the cracks, misclassified as the V.A. now says Joe was, unable to receive full compensation.
(on camera): You feel sort of like you got lost in the system?
RAICARDO: Absolutely lost. I'm still lost. I'm still dizzy (ph) for what happened.
COOPER (voice-over): And sick and tired of fighting for benefits. Last month, though, Joe's persistence began to pay off. His disability status was raised from 20 percent to 60 percent or $873 a month. But as Joe puts it, in New York that's just enough to either afford an apartment or eat. Not both.
RAICARDO: I'm disgusted. And it's not because I'm a veteran or a soldier or somebody who served. That means nothing. We choose to go. No one forces to go. I am just saying you should be treated by a human being for God's sake. It's all I want. And I think about the other veterans who are still fighting to this day, it's horrible. And I had to live it.
COOPER: It was only after CNN made repeated inquiries about this case that V.A. called to inform us that Joe would finally be granted full 100 percent disability status retroactive to March and worth $2,600 a month. Meaning he may actually get to sleep in a real bed very soon. When we called Joe with the news he said he will believe it when he gets the first check.
The war in Iraq may have broken his body, but the fight here at home is the one that has come close to breaking his spirit.
Anderson Cooper, CNN, New York.
(END VIDEOTAPE)
LIN: Joe's road to financial recovery has better scenery these days. He's now renting a room and is no longer homeless. Still, he worries about other veterans who may have fallen through the cracks just like he did.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Costs are high and it's tough making it by every month.
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LIN: It's those monthly bills that worry us tonight. If you are in financial trouble, or know someone who is, grab your pen and paper. Help is on the way. Plus ...
(BEGIN VIDEO CLIP)
WILL SMITH, ACTOR: This film represents the greatest dream and hope that a man has for his ability to be and his ability to accomplish.
LIN: Actor Will Smith on his movie "The Pursuit of Happyness." Coming up in the next 30 minutes, Chris Gardner went from homeless to Wall Street and has some words of inspiration for you.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT: ... need to decide how to spend your paycheck, you have to set priorities and spend within your means. Congress needs to do the same thing with the money you send to Washington.
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LIN: Setting priorities as President Bush said this morning. It's good for Congress and good for the average American, but sometimes it's not enough. Our next story will surprise you. A couple with college degrees and one of them working towards an advanced degree and still they're barely getting by.
CNN's Lisa Sylvester reports from Washington.
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LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Andy Loomis is a Washington, DC graduate student and his wife is a consultant. They have a four-year-old daughter Olivia and another child on the way.
ANDY LOOMIS, GRADUATE STUDENT: I'm well educated, my wife is well educated. And we're in a fairly good situation. But yet, costs are high and it's tough making it by every month. I think that's very common.
SYLVESTER: The variable interest rate on their home equity loan is taking a bigger bite out their monthly check. It is up $250 a month. Factor in rising graduate school costs and health care expenses they're on the front lines of the war on the middle class. More and more professionals and their families are finding it hard to keep up in this so-called economic recovery.
BETSY LEONDAR-WRIGHT, AUTHOR, "CLASS MATTERS": A lot of professional middle class families that thought that they were set because of their education and the high level of job that they have, they are finding it very hard, especially if they have private college tuitions to pay, they are finding it very hard to make ends meet.
SYLVESTER: Professional job growth has been sluggish at best. The economy added only 12,000 business service jobs in September. Down from an average of 32,000. Many middle income families are feeling the pinch with the housing market cooling, expenses rising and salaries flattening.
BOB GREENSTEIN, CTR. ON BUDGET AND POLICY PRIORITIES: The person right in the middle of the income scale has lost ground. That person's income has fallen once you adjust for rising prices. By $2,000. Since 2001.
SYLVESTER: Professionals, including consultants and accountants now share a common worry with blue collar manufacturing workers. The wholesale shipping of jobs to cheaper overseas labor markets.
(on camera): Many middle class professionals making up the difference between higher costs and flat income by borrowing. Credit card debt has increased to $1.8 trillion in 2005 from $70 billion in 1980. Lisa Sylvester, CNN, Washington.
(END VIDEOTAPE)
LIN: Tonight we're not only spotlighting the state of living one paycheck away, we're also talking about how to keep it from sneaking up on you. Prevention. CNN's business correspondent Valerie Morris told me that planning for tomorrow demands a clear view of where you stand today.
(BEGIN VIDEOTAPE)
VALERIE MORRIS, CNN CORRESPONDENT: You need to measure your experiences against a budget every month. And it's going to reveal ways that you can cut your experiences and open avenues to savings. So write everything that you down that you spend for one month. At the end of that one month, highlight those mandatory expenses, rent, mortgage, insurance, car payment, groceries. Anything that's not highlighted really is basically discretionary spending and that's where you can decide to put some aside.
Because the reality is what you're trying to do is to build an emergency savings account so you can break this paycheck to paycheck cycle. You can build an emergency savings with as little as $10 per paycheck. Because this is intended for when there is truly a need and an emergency. And the average person should have three to six months worth of this emergency funding so that it's your rainy day account that can cover things that you just don't expect.
LIN: Just to be clear with folks, define emergency fund. Which is different than a regularly savings accounts.
MORRIS: You're so right and it's a big difference. A savings account is one thing. What I'm talking about is money set aside if there is no other way to buy necessities.
LIN: How did they actually live on less?
MORRIS: What they need to do is be aware of their debt to income ratio, the formula. Your debt should not exceed more than one-third of your income. So for example, if you make $30,000 a year. If you're trying to save 36 percent that, or rather you're spending 36 percent of that that means $10,800 should be expenses. If you make $35,000 a year your expenses should no more than or your debt should be no more than $12,600. For $40,000 a year, $14,400.
The idea is to make sure that you live within your means. And that means you can't spend more than you make. You shouldn't and that's how people get into deep debt.
LIN: So with those numbers in mind, how much should you set aside for retirement?
MORRIS: About 10 percent of your gross income for retirement savings.
I like to talk to 20 year olds and tell them if you put aside $25 a week, you know what the magic of compounding can do? In your 20s is the very best time to start saving for retirement. Just think of it as money that you put away that you don't need to access for 40 years. It will grow.
LIN: What do people do to pay down debt when you're just barely getting by?
MORRIS: It is a very difficult thing and I understand that people want to give their kids great surprises. That's one thing. If your brakes fail or you need new tires. That's more of an emergency situation.
Here's the basic strategy. Pay as you go. Don't charge more than you can pay off in full each month.
If you are in trouble and you have a lot of credit card debt, pay off your highest interest credit card debt as soon as possible. Even if you have to divert some of the money that have earmarked for savings. But one absolute for everyone regardless of circumstances, pay on time. Every time. And if you can't pay the full amount, pay more than the minimum always. If you just pay the minimum, will you paying for decades.
LIN: And you know where I find a big savings, is if I bring my lunch.
MORRIS: This should be for kids and parents. Parents have to set that example. Don't expect your kids to do it and f you are still going to hit your favorite restaurant and have a $12 or $15 lunch.
As you were saying, if it's a seven dollar lunch five days a week, that's $35 a week that you're saving. If it's four weeks at that amount, $140. If you look at the whole year, it's more than $1600 a year just doing that.
LIN: That's a vacation.
MORRIS: I know.
Or it is a nice little tidy sum to put into your retirement account.
And just one final thing. I'm not saying that people should just squeeze themselves that they should have no fun at all. It is just be practical and logical, set up some good disciplines that you religiously follow and share those with your children. And if your spouse isn't as money savvy as you are, figure out who should be the CEO of your financial house.
LIN: That is good advice, indeed.
(END VIDEOTAPE)
LIN: She's terrific. Valerie Morris has more advice as well. It's all available on cnn.com. Look in the Only on CNN box and click on "From homeless to Wall Street."
Now the golden years of life are what baby boomers are entering yet they too are realizing the money crunch. Join us tomorrow night as our Kitty Pilgrim shows the senior scenario.
Now as we're seeing, people are determined.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Life is not always the best way you want it.
(END VIDEO CLIP)
LIN: This woman, like many others, is making the tough choices now so that life will be smoother later.
Plus, his life story is on the big screen this weekend. The real Chris Gardner says if you're struggling, the cavalry is not coming. So what does he mean by that? His interview coming up in less than 15 minutes.
(COMMERCIAL BREAK)
LIN: People across the country living paycheck to paycheck. A car accident or job layoff could force them out of their home and it could happen to anyone.
Now Melodee didn't want us to use her last name, but she represents one of the fastest growing populations of homeless. Women with children.
(BEGIN VIDEOTAPE)
LIN (voice-over): This is Melodee's night to prepare dinner. She is serving turkey for nine families, including her own. The 38- year-old has been living for the last five months in this shelter just outside of the Atlanta, Georgia, with her eight-year-old daughter.
MELODEE, HOMELESS: You just should never take for granted what you have because you never know when one day you don't have it anymore.
LIN: She lost her last job as an office manager for a construction company. This is a woman who has been working nonstop since she was a teenager, at times two jobs at once. Without those two paychecks, she couldn't make the rent and had nowhere else to turn.
MELODEE: Within a month's time, we were told we had to leave. I don't have any family that is in any better position than I am as far as life goes and I didn't have anywhere to turn except church and had somebody at church turn me on to this place.
LIN: Melodee and her daughter share this tiny room at Calvary Refuge Shelter. But it's not a free ride. The federal government allows Calvary to charge working residents up to nearly a third of their income. And Melodee managed to find another job just a month after she arrived.
MELODEE: Daycare right now is outrageous. And this refuge pays for my daycare with my child. I have to work odd hours to where she would be there more than just your normal hours and I really couldn't afford it right now. There's no way I could.
LIN: Melodee used to volunteer at shelters herself. She now has a different perception of the homeless.
MELODEE: I'm sure we all have our own stories that are going to be totally different from one other. My picture now has definitely changed because here I sit. That doesn't mean forever. That just means for now.
LIN: The National Coalition for the Homeless says the number of homeless families with children has increased significantly over the past decade and the declining wages and rising rents and mortgages have put housing out of reach for many workers.
BEATY: A typical image you get when you say the homeless, which we try not to say. The man with the cap who is stumbling around in the street, that is not the picture of homelessness. The picture is families. Single women with children. Men who are living single but have been forced to separate from their families in many cases.
Well dressed people in good jobs are one paycheck away from homelessness. If they don't have a nest egg and if they would miss a job paycheck and then miss a mortgage payment or a rental payment and couldn't cope or compensate in any other way, they could wind up homeless.
LIN: Melodee wouldn't allow her daughter on camera for this interview. She's trying to shield her from being ridiculed because she is homeless.
But she says this experience will only make her stronger.
MELODEE: If it has affected her in any way, I hope that it has grown us closer to understand that life is not always the best way you want it. Everything cannot happen the way you want it.
(END VIDEOTAPE)
LIN (on camera): Now it's no secret much of America's middle class is trapped by low wages and the soaring cost of things like insurance and rent. So who is to blame? Our Fredricka Whitfield put the question to Lou Dobbs, host of CNN's LOU DOBBS TONIGHT and author of the book "War on the Middle Class."
(BEGIN VIDEOTAPE)
LOU DOBBS, CNN HOST: The fact of the matter is that the advocate should be the men and women who are elected to our Unites States Congress and to the White House and who should be representing the largest group of voters and people in this country, the middle class.
The middle class is defined as all but those who are rich and poor. That amounts to some 250 million Americans and instead of being represented in Washington and they're being shunned and as I said, they are being assaulted.
Thrown into direct competition with cheap labor and our elected officials are not improving public education. Which is the great equalizer in this society. Instead, they're failing an entire generation of Americans.
Half of all blacks are dropping out of high schools. Half of all Hispanics are dropping out of high school. We're failing an entire generation of Americans.
FREDRICKA WHITFIELD, CNN ANCHOR: When you talk about failing an entire generation of Americans, while some critics including yourself are saying among those failing an entire generation of Americans, the government or Congress, others are actually blaming these Americans that we speak of, saying that perhaps they're not managing their lives well enough and they're not making the right choices.
What do you say to those critics who underscore that?
DOBBS: Well, I say to them, look at the reality. The reality is that the median income in this country is $33,000 a year. Half of all working Americans make less than $33,000 a year.
Now, all of these geniuses who say it's so easy for a man and a woman trying to raise a family or more likely one parent trying to raise a family and to support their kids, get them an education, it's easy for a few elitists to blame them, the fact is we need to blame ourselves for tolerating the situation in which we're not permitting our middle class to earn a decent living and to have a quality of life that was available to Americans 30 or 40 years ago.
(END VIDEOTAPE)
LIN: Our Lou Dobbs now on Saturday and Sunday nights at 6:00 p.m. Eastern as well, seven days a week. Get his opinion and point of view. Now, a lot of people obsess over money but most of us just want to be happy. One multi-millionaire is and not because of he's rich.
(BEGIN VIDEO CLIP)
CHRIS GARDNER, AUTHOR, "THE PURSUIT OF HAPPYNESS: Money is the least significant aspect of wealth. You do get to a point in your life where it's important to us is our health, our children, there's some degree happiness.
(END VIDEO CLIP)
LIN: That is Chris Gardner. His amazing life story is now a major motion picture called "The Pursuit of Happyness." Gardner's story could be yours. We will hear from him after the break.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
W. SMITH: If people can't do something themselves, they want to till you can't do it. You want something, go get it. Period.
(END VIDEO CLIP)
LIN: "The Pursuit of Happyness." Will Smith lights up the big screen this weekend as Chris Gardner, a down on his luck family man tries to make a life for him and his son. Well, early on, Gardner gambled on a nonpaying internship hoping that it would lead to something big. And it sure paid off. Today Gardner is a multi- millionaire running offices Chicago and New York.
But Chris Gardner told me he is not a rags to riches story.
(BEGIN VIDEOTAPE)
GARDNER: Money is the least significant aspect of wealth. Money does not have anything to do with happiness or success in my estimation.
LIN: But money is what puts a roof over your head and gives you the car to get to your job and buy clothes for your kids.
GARDNER: Does that mean you're happy?
LIN: I don't know. Tell me.
GARDNER: I got one problem right now that some of the wealthiest people in the world do not have. I often cannot sleep at night because my face hurts. From walking around smiling all day. OK?
And I know a lot of people with a lot of money that don't have that problem.
LIN: You know, in this special that we're doing on the working poor, Chris, I do these interviews with people across the country. And here's what they say to me about these people who are losing their jobs and losing their homes. You know what? It's their problem. They spent too much. They got in over their head. They didn't have the education that it took to manage their money. Why should we help them? What would you say to them?
GARDNER: Who is going to help you when it happens to you?
LIN: A lot of people think it is not going to happen to them.
GARDNER: You know what? Some of them are right and some of them one day are going to be in the exact same position for whatever reason. And they'll think that they have done absolutely everything in the world right and they probably have, but think about -- what about those people, for instance, who worked for that little company down in Texas called Enron who not only lost their jobs, lost all of their retirement, all of their pension assets and as a result of that fiasco, have lost everything in the world that they own. What about them?
LIN: Because some of the critics would say that the chutzpah that you demonstrated to get that job or get that internship at Dean Witter, maybe he didn't apply that in medical sales. Maybe that's why he lost his job. What do you say to people like that?
GARDNER: To those people, first of all, I don't talk to people like that. I don't have to. All right?
LIN: Good for you.
GARDNER: I found a business fortunately, I found something that I absolutely love. Now that's something that I'm stressing to people everywhere that I go. Do something that you feel passionately about. Something that you feel strongly about. And forget about money. Do something that you would do for free because you enjoy it.
LIN: But when you were standing -- OK, let's put it this way. When you were running from that jail cell to get to that interview, were you thinking about your passion, or were you thinking about the money that you needed to make to get that car back and to feed your little boy?
GARDNER: You know what? It's all about passion. It's all about passion.
LIN: That's what it was? That's what we saw -- when you were standing in your undershirt before those executives at that table?
GARDNER: That's why I'm still running today. I'm just wearing nicer shirts.
LIN: You feel like you're running today?
GARDNER: I am still running today but I run because I want to. I choose to. Not because I have to. It's a whole different ball game. LIN: So what do you say to people who are in those same circumstances that are portrayed in this movie that feel like they have lost everything and people who are living in shelters this holiday season, they want to know. What did it take? Is it enough to say look, you have got to have the passion? What would you tell those people?
GARDNER: I tell those people -- and I talk to those real people every day. The things I say constantly number one, baby steps count, too. As long as you are going forward. You add all those baby steps up one day and you will be amazed at where you might get to. And number two, very important. The cavalry is not coming.
LIN: The cavalry. Meaning what?
GARDNER: Is not coming.
LIN: Meaning what? For some people, it might mean the federal government or a long-lost aunt.
GARDNER: Any kind have help or assistance or anything is not coming. In your darkest days when it's all on the line, the only person you can count on is you.
LIN: You realize what an inspiration that you are to so many people you work with. You know what we were at your office and with you talked to some of your employees. This is what a couple of them had to say about you.
UNIDENTIFIED FEMALE: He will call me from the airport and be like, somebody stopped me today and said, because of you I get up every day.
UNIDENTIFIED MALE: With Chris being the way that he is bringing that enthusiasm, bringing that attention, that presence, it just keeps us just going. Going forward. And I'm probably one of only guys or few guys that actually enjoy coming to work just so I can come in and actually learn something from Chris.
LIN: Colleen Carlton (ph), your president and Salvador Guerrero (ph), who works in marketing. Are you impressed?
GARDNER: Wow.
LIN: They are talking about the boss.
GARDNER: The only reason I can do any of the other things that I am doing is because I have got people like Colleen and Salvador and others on the team.
LIN: One of Hollywood's biggest stars, Will Smith, all right, took this role ...
GARDNER: One of?
LIN: Embraced it and this is what he had to say about experience and about you.
(BEGIN VIDEO CLIP)
W. SMITH: This film represents the greatest dream and the greatest hope that a man has for his ability to be. And his ability to accomplish.
(END VIDEO CLIP)
LIN: That is a man who has everything and this, he looks at your experience and what an inspiration it was. What was it like to work with him and see him on the screen playing you?
GARDNER: I got to tell you, look, Will Smith played Chris Gardner better than Chris Gardner ever did.
(END VIDEOTAPE)
LIN: He was so funny.
Well, a couple of notes on the movie. Will Smith has been nominated for a Golden Globe for his portrayal of Chris Gardner. And Chris even has a brief cameo in the movie. For more of his story, go to cnn.com and scroll down to "Only on CNN" and click on "From homeless to Wall Street."
We thank you so much for joining us for our special, a paycheck away. Now a check of the hours headlines after the break. But first your responses to our last call question. Based on our theme tonight, living from paycheck to paycheck, why do you think is happening?
Here's what you had to say.
CALLER: My name is Harry, calling from Philadelphia. The reason why so much of our society lives paycheck to paycheck is because unfortunately, the school system out there never prepares most people on how to prepare for the real world.
CALLER: I think the reason is because everybody wants everything now and we're not used to saving any more like past generations in order to buy things.
CALLER: The reason people living paycheck to paycheck, because they spend more than what they make and they overcharge and the credit card people let you borrow too much money and they keep track on that and they pay 18 percent in interest and that's why they get broke.
CALLER: Amy Sherylton (ph) and I'm calling from College Station, Texas. And I personally think that the minimum wage should be higher than it is. There is no way someone could survive on minimum wage in today's lifestyle and cost of living.
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