|This thread, and a sister thread, http://www.mothering.com/discussions...wo+income+trap, were originally from the SAHP forum and the working/student parents forum. Please see posts #38 and #43 for some context on the phrase "parent in reserve" and also on the historical work of women. Thanks for an interesting discussion!|
I have been very interested to hear what others think of this theory about the two-income trap.
In another forum on MDC, this theory came up, and the more I think about it, the more I think there is no "trap" that we can avoid falling into by simply learning to live on one income instead of two.
Basically, two income trap is an idea, put out in a book of the same title, "The Two-Income Trap: Why Middle-Class Mothers & Fathers Are Going Broke by Elizabeth Warren and Amelia Tyagi. The book talks about how, as an article in Mother Jones magazine wrote,
"many families have sent both parents into the workforce to try to make ends meet. After all, surely if both parents work full-time it shouldn't be hard to ensure financial security, right? Wrong, say authors Elizabeth Warren and Amelia Tyagi, in their book, The Two Income Trap. Two-income families are almost always worse off than their single-income counterparts were a generation ago, even though they pull in 75 percent more in income. The problem is that so many fixed costs are rising -- health care, child care, finding a good home -- that two-income families today actually have less discretionary money left over than those single-earner families did."
I think it is a valid point that a generation ago (actually, I think it was more like two generations ago), it was much easier for a family to make it on one income. And, yes, that most certainly was the norm.
The book points out, accurately I think, that the reasons for this change is because of the changing economics.
Inflation has far outpaced the rise in personal income, so families' money stretches less and less. In recent years, I think it's gotten worse due to the housing baloon, the rising cost of health care, and job instability (downsizing, outsourcing, lay offs in what historically had been pretty safe fields to work in).
Anyway, my point is I don't think it's a "trap" that we fall into by having two incomes instead of one. It's not so much that people get used to having more money, and buying expensive things, with two incomes and set up their lives as such (although there will be some anecdotes about this).
I don't think for the majority of us it's a matter of just living more frugally and "learning" to live on one income instead of two.
There really is no way to get back to the previous generations' ability to live on one income until we address national and global concerns such as housing baloon, the rising cost of health care, and job instability (downsizing, outsourcing, lay offs).
I know for my own family, we can not live on one salary. We need one spouse's full salary and about 1/3 of the other spouse's salary to pay basic expenses. With one income, we don't make it. On two incomes, we have 2/3 of the second income as discretionary funds. It gives us a lot of cushion and freedom. Health insurance and retirement are whole other issues.
I feel, for us, in the current economic times, it's not just an issue of income. If one of us lost a job due to downsizing, outsourcing, or lay-offs, our family would have a back up job to get us through the leaner times.
Is there a two-income trap, or is it just the forces of our economic reality?
|Clarification of the phrase "parent in reserve"
I'd like to clarify that "parent in reserve" does NOT indicate a SAHP does not contribute or have value in a household.
That phrase "parent in reserve" is from the book, and means basically that a SAHP is in reserve to get a job and support the family when needed if the sole breadwinner's income is lost (lay-off, death, etc). It is basically a safety net, a "SAHP safety net."
There was much discussion in this thread about how a parent in reserve would not have current job skills ready and available to secure a job that could support the family. The idea of career and resume obsolescence was discussed, but that it might be able to be overcome depending on fortitude, luck, and keeping skills up to date, but that at the very least it would be a very challenging thing to do while raising a family.
I hope that helps frame the discussion a little better