Elizabeth Warren actually has a book on this very topic: https://www.vox.com/policy-and-politics/2019/1/23/18183091/two-income-trap-elizabeth-warren-book https://www.vox.com/policy-and-politics/2019/1/23/18183091/t...
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The “two-income trap,” described
The “two-income trap,” as described by Warren, really consists of three partially separate phenomena that have arisen as families have come to rely on two working adults to make ends meet:
The addition of a second earner means, in practice, a big increase in household fixed expenses for things like child care and commuting.
Much of the money that American second earners bring in has been gobbled up, in practice, by zero-sum competition for educational opportunities expressed as either skyrocketed prices for houses in good school districts or escalating tuition at public universities.
Last, while the addition of the second earner has not brought in much gain, it has created an increase in downside risk by eliminating an implicit insurance policy that families used to rely on.
This last point is really the key to Warren’s specific argument about bankruptcy, though it’s the first two that would drive her larger interest in politics. Bad things have always happened to families from time to time. In a traditional two-parent, one-earner family, there was always the possibility that mom could step up and help out when trouble arose.
“If her husband was laid off, fired, or otherwise left without a paycheck,” Warren and Tyagi write, “the stay-at-home mother didn’t simply stand helplessly on the sidelines as her family toppled off an economic cliff; she looked for a job to make up some of that lost income.” Similarly, if a family member got sick, mom was available as an unpaid caregiver. “A stay-at-home mother served as the family’s ultimate insurance against unemployment or disability — insurance that had a very real economic value even when it wasn’t drawn on.”
A modern family where mom is already working has no “give” and is much more likely to be pushed into bankruptcy by job loss or family illness unless it builds up a big financial cushion.
To elaborate on the "no benefit" for the families, and Warren probably talks about this, but there is benefit for corporations. They get nearly double the supply of workers which drives down wages and gives them more productivity per dollar spent.
So in effect, a wealth transfer to equity holders.
Welcome to the feminist utopia, I suppose? Equal representation of women in the workplace, ignoring the fact that a large percentage of women (majority in my middle class social circle) would rather bear and raise children than slave away in a cubicle, if given a choice?
The article calls the book "controversial", but I don't see how the harm from effectively denying motherhood to women is "controversial" at all.
I mean the real problem is that we went halfsies and didn't actually build out systems that allow women to do both effectively, but then everyone got lumped into doing work because not doing so put your family at a distinct disadvantage.
In countries less allergic to establishing welfare programs, cheap subsidized daycare is used to boost workforce participation amongst women: https://www.bloomberg.com/news/articles/2018-12-31/affordable-daycare-and-working-moms-the-quebec-model https://www.bloomberg.com/news/articles/2018-12-31/affordabl...
It's hard enough to do _one_ of those things effectively, let alone both. Welfare certainly helps, but you're still half-assing both things at best, and the results are pretty self-evident by now.
I mean, it's also not clear that mothers are necessarily the best people to be raising children either, given that being a mother and being trained in childcare are not the same thing.
From the Quebec study:
> For those kids who are in Quebec’s public programs, known as centres de la petite enfance (CPEs), “repeated studies have found sharp improvements in child development,” Fortin said. This accounts for about one-third of Quebec’s children in care right now.
Now the problem is scaling up good childcare to the other two thirds.
Other than this I don't really see how you would put the genie back in the bottle for women juggling childcare with employment, without also screwing over women who want both or don't want children.
A woman cannot rely on finding the perfect man to take care of her. That is just unrealistic. And likely, it will set her up for failure.
And a woman cannot rely on her parents to support her as an adult until she gets married. That’s too heavy a burden on her aging parents.
Really, the only way forward, is for the woman to get educated, skilled, trained, or certified, in order to work.
But, we as a society need a new and different social contract.
I'm really not following Warren's reasoning here.
First of all, with two incomes, if one person loses a job, you still have cash coming in. On average, the drop is from 100% of normal cash flow to 50% of normal. With one income it is from from 100% to 0%. Yes, the other spouse can get a job, but that takes time, maybe days, maybe months.
This seems especially true during a bad economy when unemployment is high and people stay unemployed for long periods of time. With a dual-income family, the two often work in different fields. One might get laid off but the other's job is safe. You'll suffer, maybe even have to sell your house or something, but at least you can feed yourself.
Second, I've seen what happens when a spouse doesn't work outside the home for a long time. This happened to a relative of mine a long time ago. She had a short but perfectly fine career as a teacher for a while before getting married, having children, and being a housewife. Eventually she got divorced and found that, after being out of the job market for 20 years, the only job she could get was near minimum wage data entry. (She eventually got a better job, but it took many years as she was basically starting over.) Anyway, the point is I'm skeptical of Warren's reasoning that in a single-income family, the other spouse can just go out and get a job if needed. Over the long term, the single-income situation tends to damage the career path of the spouse who doesn't work outside the home.
> I'm really not following Warren's reasoning here.
First of all, with two incomes, if one person loses a job, you still have cash coming in. On average, the drop is from 100% of normal cash flow to 50% of normal. With one income it is from from 100% to 0%. Yes, the other spouse can get a job, but that takes time, maybe days, maybe months.
The general crux of Warren's argument, is that the fixed costs incurred by the necessity of women working is so large that it basically made household income a zero sum game.
Previously, one person made income Y, and if the breadwinner became unable to work then they made some amount close to or smaller than Y.
Today, two people each make X, and also have to pay childcare and additional commuting or other expenses of Z every day.
Warren's assertion is that overall, today 2X-Z <= Y, because women increased the labor supply so much that wages were suppressed; so that Y for one person eventually became X for two people in a household. Depending on how bad the decline is, X may be a lot worse than a new, untrained wife making less than Y.
What makes a two-income household a "trap" is when both parents are forced to work in order to make ends meet. This creates a nominal rise in household income that masks the actual desperation of the household's financial situation.
The trap is: declining real household income for segments of the population. The "two income" part is a consequence of the trap, not a cause.
This matters because a lot of the increasing representation of women in the workforce is not the result of the two-income trap, but the result of women, individually, wanting to work. In other words, not every two-income household is actually in a trap. Many of them are formed by two people who each have jobs they like and want to keep.
My wife, for example, has advanced training and likes her job. She couldn't wait to get back to work after we had our first child. As a family, we could survive fine on my salary today... but she would kill me if I suggested this. Now we're struggling to home-educate our child while we both work remotely. If I suggested that she quit her job to be our family's "insurance policy", again, she would kill me (even if I invoked Elizabeth Warren).
My mom worked too, because she wanted to. Good thing she did, because when my parents divorced she was able, financially, to transition to being on her own right away.
Single-income families can be a trap too... for the person who is not earning an income. About half of U.S. marriages end in divorce. A spouse with no independent financial base and no job of their own is not in a position to leave when they want to.
This stuff is really important to understand, so we don't go down a fruitless rabbit hole of wringing our collective hands about the decline of the traditional family culture or whatever. Taking that broad simple view of two-income households runs a very real risk of simply denying the agency of women who want to work and make their own way in the world... even if they are married with kids.