The economy has taken a nosedive over the last year nationwide, but how has it affected people locally?

There’s no doubt the higher cost of living has hit home, making it harder on everyone to make the dollar stretch.

“I have to work two jobs because my husband works in construction and right now the construction business doesn’t have a lot of work out there,” said Ann Berg of Pine City.

Gary Gahler of Gahler Investment Group suggests that the major contributing factors to the poor economy are directly linked to “the banking and secondary markets gave out too many loans, which then took the real estate market down.”

Frank Christopherson, bank manager at U.S. Bank in Pine City believes that there are two major factors that have caused the economy to decline, one being that houses were appraised too high.

“Values went up higher than they should have between 2000 and 2006,” Christopherson said.

The second factor he points to for hurting the economy is the elevated cost of oil/gasoline.

The economy’s continued weakness has sparked a number of trickle-down concerns for the average consumer. There is less discretionary income and household wealth, the rising cost of food, fuel and healthcare, not to mention the increased unemployment rates. All of these factors have caused many struggling consumers to default on credit card and mortgage loans.

“We are seeing more overdrafts,” Christopherson stated.

Although U.S. Bank sees the same number of debt consolidation loans as they did a year ago, they find that people have higher debt than they did before. Also, people are waiting too long to do anything about it.

“If you’re paying your bills and there’s nothing left over, you need to look at your options,” Christopherson suggests. “You can reduce your high interest rate loans or reduce your payments, but if you’re three to six months behind then it’s too late.”

“I personally believe we’re in a recession,” Christopherson said. “Pine City has been hit harder sooner because of the building slowdown affecting contractors and subcontractors.”

With one-third of Pine City residents commuting, one-third working locally and one-third retired, the fuel prices affect a large number within the community, Christopherson said.