Big Debt, Little Savings, No Income: Why Millions of California Workers Now Stuck at Home Need Help Fast

Two weeks ago, Ilse Villacorta made a decision. Even though she and her boyfriend had very little money saved up, she would no longer go into work, fearing the rapid spread of the coronavirus. She also decided not to pay rent in April, risking eviction. The couple only had $2,000 in their bank account, and Villacorta wanted to hang on to as much of those savings as possible for the rough road ahead.

Villacorta, 27, lives in West Oakland and until recently worked as a bartender and for a catering company in San Francisco. With most bars and offices now closed because of the coronavirus, and her boyfriend only barely scraping by with temporary sales work, the couple has no real income.

When she decided to stop working, Villacorta's co-workers thought she was being extreme and gladly picked up her shifts. She asked them if they had plans in place for what they would do without any work income. None of them did. She says the gravity of the situation only hit most of them when actor Tom Hanks tested positive for COVID-19 and the NBA suspended its season.

As it turns out, Villacorta was just a couple days ahead of the rest of the Bay Area, and two weeks ahead of the entire state, where millions of workers are now in the same boat. For now, she's safe from eviction, because Alameda County recently announced it would temporarily stop enforcing evictions while residents are ordered to shelter in place.

“For the next couple of weeks we will be fine, but after that we will need to go back out for food and figure out how to eat,” Villacorta says. “That’s my biggest issue long term — just essentially eating.”

Like a significant proportion of workers in California, Villacorta can't work from home, doesn't have enough savings to last more than a few weeks and was only able to accrue three paid sick days, the state minimum.

A recent UC San Francisco survey of 100,000 retail and service workers found that over 60% did not have the resources to weather a single $400 surprise expense.

In fact, it’s somewhat miraculous that Villacorta has any savings at all. She has been struggling to break even ever since graduating from UC Berkeley in 2016 with a degree in environmental science.

“When I went to college to with that degree I was like jobs should be at a decent level,” Villacorta says. “I wasn’t hoping to make Google money, but I was hoping to make a livable $50K, $55K a year. But that isn’t the market I found for that degree.”

Villacorta tried to find decent-paying jobs in her field, but came up short, finding only internships that didn’t pay enough to live in the Bay Area. Along the way, she racked up $18,000 in credit card debt.

She immigrated to California from Mexico with her parents. Her mom has a job at a factory, her dad works in the hospitality industry.

Villacorta worked hard to put herself in a position to succeed. She got good grades and was accepted to UC Berkeley, the first person in her family to go to college. She thought that in light of climate change, environmental science would be a safe bet for a career and a way to do something fulfilling and positive in the world.

“I would love to be an environmental analyst,” Villacorta says. “I love policy, I love breaking it down. I like research. It is what I did in college. It's what I’d like to do again.”

For the last few years, though Villacorta's been trying to claw her way out of the financial hole she got into while preparing for her career. To stay afloat and try to chip away at her debt, she began working three jobs in catering and bartending after getting her degree.

Her parents, she says, are confused. They thought because she went to a great college, she wouldn’t have to work in a factory or the service industry like they do, and her mom repeatedly asks why she isn’t putting that expensive degree to better use.

“She’s like, ‘I don’t understand how you can have a college degree and you don’t have a well-paying job,’ ” Villacorta says. “And I’ve kind of had to tell her that’s not how things work in America.”

That said, Villacorta has been able to put some dent in her debt, lowering her credit card burden to around $10,000, and even putting a small amount of cash aside.

“I actually started a savings account in January,” she says. “For the first time, I felt confident that I was having a little extra cash and I started putting $50 a week into my savings account.”

Villacorta recently considered trying again to find a job in environmental policy. But then the coronavirus hit and disrupted everything.

“I’m so incensed, not just by the lack of a safety net,” Villacorta says, “but the lack of our government taking this seriously and handling this. And just the lack of governance at the federal level has made my jaw drop.”

Even before this pandemic, she says people in her situation needed support, things like nationalized health care, guaranteed paid time off and school debt relief.

Now, on top of all that, she and millions like her now need money just to buy food to survive.

“When you don’t have that safety net, this is what happens,” Villacorta says. “People have to decide between eating or paying rent or paying their debts or buying medicine.”

Villacorta says she and her boyfriend will be fine for a few weeks, but after that, she doesn’t know what they will do.

In addition to filing for unemployment insurance, bartenders like Ilse Villacorda can try to get some support by applying for the bartender assistance program, which is currently experiencing an unprecedented number of applications.