What do you think of the idea of a two-income trap? - Page 5 - Mothering Forums

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Old 10-02-2008, 02:04 PM
 
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Originally Posted by siobhang View Post
I think this is really where many financial problems begin - the family cannot afford to live on one income BUT also cannot afford to pay for the childcare required to have two incomes. And unless you have grandparents or other family, or some sort of subsidized childcare, you are SOL.

This is why the decision to work/not work is so individual to each family. I do believe some people when they say all they had to do was live modestly so a parent could stay home or that they couldn't afford both parents to work. I am sure that is true; at least, I ain't questioning their family math, since it is none of my business.

For us, we made decisions well before children - and not fully cognizant of the impact children would have on our financial options - that we need to live with now - where we live, our careers, past debt, etc. Sure, we do have options that could make it possible for us to live on considerably less, but that would be an enormous transition with huge, very disruptive, and in most cases painful, consequences for our family - moving to a new area with a low COL, disbanding our business, selling off or getting rid of things inherited from the family.

Or, actually, we could send my dh "out to the salt mines" - i.e. being a government contractor for a DOD contract where he would be working 80+ hours a week and have a very long commute. We could probably live on that salary. But he would be so miserable and hate his life so much, and never see his kids, we always agreed that would be our fall back, plan Z position - the "something catastrophic has happened and we need to make as much $$ fast as possible" plan.

And we are damned lucky that we even have this as an option, and that we don't need to take it. We know we live in a very privileged position, because we do have more options. But our situation is rare, and becoming increasingly rare in the US.
Well said. There are so many families who fall into this gap - can't work because childcare takes up the whole paycheck, make too much to qualify for benefits, etc. I am all for encouraging work rather than welfare, but honestly, unless we set up social support systems it just makes matters worse for so many. But god forbid we should have government funded childcare for all, or (gasp!) government funded healthcare. Or raise the minimum wage to a liveable wage. Or fund higher education. No, spending money on sports stadiums and wars is far more important.

Ok, stepping off my OT soapbox....

We are in a similar position. We too made decisions in the eleven years we were married before the kids came along that have impacted us post-kids - many of the same decisions that Siobhang mentions. And yes, undoing them now would be horribly dispruptive and very painful for our whole family.

However, we are among the lucky ones, in that our salaries are sufficient to pay for childcare and still justify working. I also feel we are very lucky that in a worst case scenario I could go "out to the salt mines" so to speak and earn enough to support our family. I also feel extremely lucky that it is not an option we need to take, at least not right now, and that by working part time I can make enough that we are comfortable, while still keeping my finger in the workplace pie.

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Originally Posted by That Is Nice View Post
:

And the middle class is shrinking, and if things do not change, so will the upper middle class.

So...

I don't know, even if my husband made $150k per year (ha! he doesn't!) and we were very upper middle class, I still wouldn't be comfortable living on one income. Because it's not just about money coming in. It's stability, job security, retirement, etc.

I think if you follow the economy, there is more unease about living on one income. Maybe.

But I have hope that things will change...and we'll stop this cycle of more of the same.
Yes. I think I would work at least some even if dh made enough to support us. I would sock it away for college or retirement or some pretty nice vacations, but I will still work a bit, because I worked too hard to start my business, and because it has sustained us through some lean times, and I am not willing to give up that insurance policy.

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Originally Posted by slsurface View Post
I TOTALLY agree. We choose to live this way for a number of reasons: future economic security (savings), environmentalism, and because (having grown up poor) we realize that happiness is not about things, but about family life. Frugal living is so ingrained in me that the excesses of our society at large makes me physically ill.
Uh huh. I can't even stand commercials anymore. I yell at the TV. Really, so many products when one would do. And how it is presented that we NEED these things. Sigh.

Wife to Thomas, WAH mama to Sofia Rose 8/04, Ellen Marie 10/07, her twin sister Amalie Joy lost 7/07 , and Maya Grace and Hannah Miriam 4/10
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Old 10-02-2008, 02:12 PM - Thread Starter
 
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I actually agree with their premise, in general. Although, it's going to vary from family to family.

One of their primary arguments is that parents now feel the need to "buy into" certain housing areas for the schools. For which they pay a premium in higher housing and possibly commuting costs. In order to do that, both parents often have to work to make ends meet. Let's say parent one of making 40,000/yr, and parent 2 is making 60,000 year. If 90,000 of their income is going to "needs" (mortgage, utilities, food, gas, car, etc), then, yeah, no matter which parent loses their job, they're somewhat screwed. And, in higher COLAs, it's NOT unreasonable to spend 90,000/yr on "needs".

The other part of their argument, though, is that if you have made certain choices (maybe homeschooling or living in a less desireable school district) and are living as a one-income family, you have a person "in reserve", so to speak. If you're living on one income of 40,000/yr, and that person loses his/her job, *both* parents can go to work, and between the two of them, you'll probably be able to make up most of that 40,000/yr. They won't be glamourous jobs, for sure, but, it more probable than ONE person making up 50,000, like in the first example, and will give the family a bit of "breathing" room, so to speak, until the primary wage earner is again able to support the family on his/her own.

The problem is for a lot of people, it's a cycle where once you're in, you're in. If you buy into a good school district (and who doesn't want to do right by your kids), and are spending 50% of your combined income on your mortgage, then, yeah, you're in trouble if one of you loses your job. You can't just downsize immediately, or necessarily find a 50,000/year job in today's market. So, it's a lot of cases of decisions made 10 years ago coming back to haunt.

I believe the other two biggest factors of bankruptcy are medical issues/bills (so, that's really not something easily controlled) and divorce (again....more control, I guess, but, in some situations, you really CAN'T stay together). But, again, if you're able to live on one income prior to those, it's a lot easier to make up the lost income if that person is no longer primary wage earner.

Their premise isn't that two-income families are spending frivolously or irresponsibly - if you read the book, they actually say that, in a twisted way, it would be better if they WERE, because then they could more easily cut back in the event of job loss. But, the *fact* is that a one-income family *is* generally better set up to absorb the financial implications of a job loss because you have 1) less overall chance of job loss and 2) more people in reserve to make up that lost income.
You make good arguments, and I can see the logic in what you are saying. But as a lot of people have posted, even choosing to homeschool, and, thus, removing the "need" to buy into the better, more expensive school districts (I see your point) would be difficult to do in most parts of the country on one salary of $40,000 to $60,000.

Remember, in about 75% of U.S. cities, according to the book, a median home can not be purchased on one median income. And that was in 2004. I would venture a guess that in 2008, it might be challenging to pay the rent on one median cost apartment with the salary of one median paying job.

Also, I do not buy the idea of having one parent in "reserve" who can get a job, if need be. I know what the book is saying, but there are so many reasons that being on a hiatus from the job market will impact one's ability to get a job ASAP I can't list them here, but you and I have talked about that and agreed on that before.

Now, perhaps if the parent on "reserve" changes every couple of years so that no one parent has extensive gaps on the resume, then I could see it working possibly.
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Old 10-02-2008, 03:15 PM
 
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Originally Posted by siobhang View Post
In our personal situation, my dh and I co-own a company. I own 51% of the company and I do most of the business development and day to day management. We do depend on both of us working since we both run ths company.

While on one hand, owning our own business feels risky, in fact, I think we are in better stead than most employees, especially as we work in an "at will" state. The other day, when I was burnt out, I realized that in order for me to quit my job, it would take at least 6 months to work out all the contracts we have signed. On the plus side, we provide our health insurance through the company - and therefore, we have more control over our insurance situation than the vast majority of americans.

Don't get me started on rising health insurance premiums, though...
I was self employed for most of my 20s, and I hear you on the health insurance! I clung to my COBRA insurance through my ex-husband's employer for two years, eating through my savings to pay $500 a month for it while pregnant, because no private insurer would touch me (pre-existing conditions). I loved freelancing, but I can't keep pursuing it as my sole source of income -- just too much risk and instability for my comfort right now.

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Originally Posted by Azuralea View Post
Please don't compare yourself to the mothers here. Remember that every time somebody does an income poll on MDC, the average income skews very high. This group is, on average, a pretty well-off group. It's much easier to make it on one income if that income starts out above the national wage average. I'm not saying that people here aren't truly wise or frugal (personally I love the F&F board), but at some point there is basic math that comes into play, and no amount of home cooking or thrift shopping can get around that.





You're working so hard, taking care of your family.
Thank you so much for saying that -- I could seriously cry right now reading it. So often I feel like a selfish idiot who's just doing things wrong, searching for the "right thing" to do that will magically fix our situation.

And yeah, I do remember reading the MDC income poll and thinking, damn, that's a lot of six-figure action! Even if the advice folks are offering is generally sensible and responsible, it's hard to hear it from people who are making triple your household's base pay (and sometimes on ONE income). A serious case of "easy for you to say." For instance: I've had people tell me to never buy anything I can't afford in cash, period (other than a house). That's generally great advice if you're pulling in $100k or more a year, but on half that in a high COL area? Umm, yeah, if I never put anything on a credit card, our one car wouldn't be driveable, I'd be sitting here with a vision impairment and no glasses, and no one in my family could ever seek medical care that cost more than a $20 office visit. Just not doable. (And a mortgage? Impossible.)

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Originally Posted by That Is Nice View Post
I agree it might make sense for some, but probably not for the majority. You are right that it would be a pretty narrow set of circumstances to be able to get a good job (a family supporting job) after a hiatus from the job market. Even those specialized, highly niched skills jobs such as medicine or legal work would be hard to get back into after a prolonged absence.

Also, the time period when a household would have 3 or more children who are day care aged is relatively short. I mean, with two years, a 3 year old would be school aged, thus reducing the child care costs significantly (even after school care is less than day care).

Of course, some may homeschool, but I would argue a household should probably have a financial plan for financial solvency that goes along with homeschooling.
Yeah, that's one of the biggest reasons I'm not homeschooling -- I *cannot* afford the risk of taking myself out of the workforce for that long. And yes, I know people make sacrifices to homeschool, but to me, serious risk of financial destitution is too big a sacrifice. (Besides, if we have NO money, how is homeschooling going to be a positive experience if my child constantly has to hear, "Sorry, honey, I know we're homeschooling to allow you to pursue your interests more fully, but because we're doing that, we can't afford dance class or music lessons for you.")

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Originally Posted by siobhang View Post
Or, actually, we could send my dh "out to the salt mines" - i.e. being a government contractor for a DOD contract where he would be working 80+ hours a week and have a very long commute. We could probably live on that salary. But he would be so miserable and hate his life so much, and never see his kids, we always agreed that would be our fall back, plan Z position - the "something catastrophic has happened and we need to make as much $$ fast as possible" plan.
Oh yeah ... I used to live in DC, and am actually moving back to the greater Baltimore/DC area, so I know of what ya speak! DH would probably be a good DoD candidate -- he's ex-military and could get clearances no problem -- but a 55-hour work week is kicking his butt so hard, poor guy, that he has no desire to pull 80 (that, and he's not a fan of working for anything military-related anymore).

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Also, DH and I will not have 3 or more children because we simply could not swing that financially. Our family planning definitely factors in, among many other things, financial ability. That is somewhat unfortunate, I think, and might be a bit unpopular as an idea, but that is definitely our reality.

But I often think how life can throw curve balls. We could have had an unexpected pregnancy while we were in college, as some do. We also could have planned to have two children, and ended up with two sets of twins, or triplets. You can do family planning, but biology isn't always predictable. Like life.
Us, too, on the more kids issue. Heck, I don't think we can afford more than ONE, ever, unless something radically changes financially for us before DH turns 50 (our de facto age cut-off point for having more -- rapidly approaching!). I know people often take the attitude that more children are worth it *no matter what*, and say that "Finances will just work themselves out." I wish I could be idealistic enough to believe that, but I don't. I think our lives find some kind of equilibrium eventually, but finances don't "just work themselves out" without a good plan.

And curveballs ... dear God, I could write the book on those. Six years ago, I was one of those $100k people, homeowner, all smug with my dream career (full-time professional novelist ... how's that for a rarity?) ... and then the bottom dropped out. Second novel tanked, my first marriage fell apart, had major health crisis that kept me in and out of the hospital for the better part of a year, followed by a cross-country move, remarriage, surprise baby after infertility issues (while we were both temporarily unemployed), and here we are now, stuck in an expensive and combative job market with no real options, getting ready to move back to my old hometown with nothing but a credit card and financial aid to start over with. I will never, ever give someone glib financial advice or act complacent again. I am so humbled by the past five years of my life, I can't even begin to tell you.

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Originally Posted by That Is Nice View Post
I don't know, even if my husband made $150k per year (ha! he doesn't!) and we were very upper middle class, I still wouldn't be comfortable living on one income. Because it's not just about money coming in. It's stability, job security, retirement, etc.

I think if you follow the economy, there is more unease about living on one income. Maybe.

But I have hope that things will change...and we'll stop this cycle of more of the same.
Yeah, you gotta have hope, or else you'll go crazy analyzing it all!

And there have been moments when I have wished that the DH man pulled in $150k as our "solution" ... I joke that it would rock to be a "kept wife" ... but I agree with you ... one income is risky regardless of how great that income is. Granted, if that income is substantial, you should theoretically have savings in place if the you-know-what hits the fan with a job loss, but still ... I've seen SAH friends' houses and credit go completely under when their six-figure breadwinner lost his job and couldn't get another one quickly.

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Originally Posted by katheek77 View Post
I actually agree with their premise, in general. Although, it's going to vary from family to family.

One of their primary arguments is that parents now feel the need to "buy into" certain housing areas for the schools. For which they pay a premium in higher housing and possibly commuting costs. In order to do that, both parents often have to work to make ends meet. Let's say parent one of making 40,000/yr, and parent 2 is making 60,000 year. If 90,000 of their income is going to "needs" (mortgage, utilities, food, gas, car, etc), then, yeah, no matter which parent loses their job, they're somewhat screwed. And, in higher COLAs, it's NOT unreasonable to spend 90,000/yr on "needs".

The other part of their argument, though, is that if you have made certain choices (maybe homeschooling or living in a less desireable school district) and are living as a one-income family, you have a person "in reserve", so to speak. If you're living on one income of 40,000/yr, and that person loses his/her job, *both* parents can go to work, and between the two of them, you'll probably be able to make up most of that 40,000/yr. They won't be glamourous jobs, for sure, but, it more probable than ONE person making up 50,000, like in the first example, and will give the family a bit of "breathing" room, so to speak, until the primary wage earner is again able to support the family on his/her own.

The problem is for a lot of people, it's a cycle where once you're in, you're in. If you buy into a good school district (and who doesn't want to do right by your kids), and are spending 50% of your combined income on your mortgage, then, yeah, you're in trouble if one of you loses your job. You can't just downsize immediately, or necessarily find a 50,000/year job in today's market. So, it's a lot of cases of decisions made 10 years ago coming back to haunt.

I believe the other two biggest factors of bankruptcy are medical issues/bills (so, that's really not something easily controlled) and divorce (again....more control, I guess, but, in some situations, you really CAN'T stay together). But, again, if you're able to live on one income prior to those, it's a lot easier to make up the lost income if that person is no longer primary wage earner.

Their premise isn't that two-income families are spending frivolously or irresponsibly - if you read the book, they actually say that, in a twisted way, it would be better if they WERE, because then they could more easily cut back in the event of job loss. But, the *fact* is that a one-income family *is* generally better set up to absorb the financial implications of a job loss because you have 1) less overall chance of job loss and 2) more people in reserve to make up that lost income.
Okay, maybe I am dense on the mathematical formulas you're using here (English major, what can I say?), but I still don't understand how having one person "In reserve" to get a job when the breadwinner loses his/her job is somehow better of an "option" than when one person loses their job and the other is already working. I would think that the second scenario is less disruptive and less of a scramble -- especially since you'd have NO money coming in from either partner right after a job loss, at least until SOMEbody got one. (Not trying to pick on you for raising the point, just honestly curious as to what the reasoning is exactly.)

I think that argument also massively overestimates how easy it would be for the second SAH partner to get a job quickly. I have been looking for a solid year, folks. Granted, I live in the job market from hell and have a very unconventional resume (high end creative and low end retail, what a combo), so I am an extreme example, but seriously, I can't even get work as a cashier on the weekends to help out. It is utterly demoralizing. Plus, when you are a SAH parent, it's really hard to find time to devote to job searching and going on interviews during regular business hours! We wound up putting DD in preschool a few mornings a week just to give me time to devote to the search (typing cover letters at 2 am was not working!), and the cost of that has sucked us dry even quicker (I am ashamed to tell you what 15 hours a week of preschool costs at the only school in town I can physically get to), but it was worth it to me ... there is NO way I could have done my grad school applications without some childcare, either (and now I am using that time to arrange temp housing and job search for DH, who works too many hours to have time to, before we move). The crappy thing is, you can't take the IRS childcare deduction unless you actually get work ... you can use the childcare to look for work, but if you don't find it, sorry Charlie, no $3k refund for you. (But I'm not bitter. No, really, I'm not.)
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Old 10-02-2008, 03:30 PM
 
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Well said. There are so many families who fall into this gap - can't work because childcare takes up the whole paycheck, make too much to qualify for benefits, etc. I am all for encouraging work rather than welfare, but honestly, unless we set up social support systems it just makes matters worse for so many. But god forbid we should have government funded childcare for all, or (gasp!) government funded healthcare. Or raise the minimum wage to a liveable wage. Or fund higher education. No, spending money on sports stadiums and wars is far more important.
Yeah, what's up with that? Where's my childcare, Uncle Sam? And my healthcare? And my disability benefit? (I'm one of those folks who is disabled enough that my impairment impacts every fact of my life -- where I can live, what employment I can get to easily -- but not disabled "enough" in the numbers (visual acuity) to qualify for benefits. Not bitter, take two.)

I totally agree with you. Subsidized childcare would pretty much eliminate the working-to-pay-childcare, can't afford to work part of the equation, and it would make life a helluva lot easier for freelancers, whose income is so variable from month to month.


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Originally Posted by That Is Nice View Post
You make good arguments, and I can see the logic in what you are saying. But as a lot of people have posted, even choosing to homeschool, and, thus, removing the "need" to buy into the better, more expensive school districts (I see your point) would be difficult to do in most parts of the country on one salary of $40,000 to $60,000.

Remember, in about 75% of U.S. cities, according to the book, a median home can not be purchased on one median income. And that was in 2004. I would venture a guess that in 2008, it might be challenging to pay the rent on one median cost apartment with the salary of one median paying job.

Also, I do not buy the idea of having one parent in "reserve" who can get a job, if need be. I know what the book is saying, but there are so many reasons that being on a hiatus from the job market will impact one's ability to get a job ASAP I can't list them here, but you and I have talked about that and agreed on that before.

Now, perhaps if the parent on "reserve" changes every couple of years so that no one parent has extensive gaps on the resume, then I could see it working possibly.
We are the exact scenario you quote. Depending on DH's overtime, our income fluctuates between $40k and $60k a year. We gave up on home ownership already for the time being, but now we are in a position where, when our lease comes up for renewal, we won't even be able to afford to renew. (Well, theoretically we could downsize, but in order to get something for our current price, we would have to sell most of our stuff - already pretty pared down! -- and move from a nice-sized 3 bedroom to an 800 sq. ft. one bedroom. With a toddler, and a dog. Indefinitely.) All year long I have been chanting to myself like a mantra, "Okay, I can't afford a house, but I am blessed to live in a spacious, really lovely apartment in a safe area where I can walk to everything I need," but come January I won't even have that anymore. What a sad state of affairs when you're mourning a friggin' *apartment.*
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Old 10-02-2008, 04:18 PM - Thread Starter
 
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Okay, maybe I am dense on the mathematical formulas you're using here (English major, what can I say?), but I still don't understand how having one person "In reserve" to get a job when the breadwinner loses his/her job is somehow better of an "option" than when one person loses their job and the other is already working. I would think that the second scenario is less disruptive and less of a scramble -- especially since you'd have NO money coming in from either partner right after a job loss, at least until SOMEbody got one. (Not trying to pick on you for raising the point, just honestly curious as to what the reasoning is exactly.
:

Having a SAHP in "reserve" doesn't make sense to me, either.
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Old 10-02-2008, 04:21 PM - Thread Starter
 
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Yeah, that's one of the biggest reasons I'm not homeschooling -- I *cannot* afford the risk of taking myself out of the workforce for that long. And yes, I know people make sacrifices to homeschool, but to me, serious risk of financial destitution is too big a sacrifice. (Besides, if we have NO money, how is homeschooling going to be a positive experience if my child constantly has to hear, "Sorry, honey, I know we're homeschooling to allow you to pursue your interests more fully, but because we're doing that, we can't afford dance class or music lessons for you.
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Old 10-02-2008, 04:28 PM
 
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It [keeping a spouse in reserve] also supposes that you can get childcare in a moments notice. I spent 1.5 years on a waiting list to get DS into his first daycare. :
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Old 10-02-2008, 04:40 PM - Thread Starter
 
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It [keeping a spouse in reserve] also supposes that you can get childcare in a moments notice. I spent 1.5 years on a waiting list to get DS into his first daycare. :
You know, that is a good point and no one has brought that up yet.

One scenario that was thrown out there is that hard economic times hit, and one spouse lost the job providing the family's sole income, then each spouse could quickly get lower paying jobs.

But how do you find child care for this arrangement, in short order? And how would you pay for child care on two low paying jobs?

Obviously, the couple would probably work hard towards the goal of getting back a similar type of job that supported the family better, but in the mean time, really, how does having a SAHP in reserve work? ...with regard to child care and expenses.

It seems like it wouldn't work, and isn't a very good strategy.
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Old 10-02-2008, 04:48 PM
 
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Okay, maybe I am dense on the mathematical formulas you're using here (English major, what can I say?), but I still don't understand how having one person "In reserve" to get a job when the breadwinner loses his/her job is somehow better of an "option" than when one person loses their job and the other is already working. I would think that the second scenario is less disruptive and less of a scramble -- especially since you'd have NO money coming in from either partner right after a job loss, at least until SOMEbody got one. (Not trying to pick on you for raising the point, just honestly curious as to what the reasoning is exactly.)

I think that argument also massively overestimates how easy it would be for the second SAH partner to get a job quickly.
Precisely what I was wondering . . ..
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Old 10-02-2008, 04:51 PM - Thread Starter
 
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Sing it, sister!!



And SOME one-income families (with a SAHM) have a serious power imbalance; I saw it deeply in my own parents' marriage. My mother felt powerless, helpless, and weak. She cried often about it.

Bringing in almost half of the family income eliminates that power imbalance in my own marriage that would most certainly be there if I didn't work--I can see the writing on the wall. (And kudos to those who have equal power balances even with a SAHM.)
:

I think power imbalance is an issue. Even in a great marriage, where each parter's contribution is respected and valued, there can be power imbalances associated with money, especially if disagreements crop up.

Things can go along swimmingly until there is a disagreement. I'm talking about disagreements about fundamental and important things like schooling for the children, home birth vs hospital, etc. Those are just a few examples.

If you hold some of the purse strings, you have a little more say. Granted, some SAHMs have equal power, but I sometimes wonder if that power is granted or claimed. I mean, my DH definitely respected and listened to me more as a working person with a pay check and benefits than he has when I have been a SAHP. And I'm still using some of my paycheck in the form of savings! Sometimes, during an argument, he can say the most unfair, unsubstantiated things about how he earns the money. He never said that, not one time, when I actually earned a paycheck. More than once, when we aren't aguing, DH has said the money he earns while I'm a SAHP is the family's money, our mutual money. So, yes, I think during arguments the balance of power can be strained, and sometimes power is more granted than claimed, if that makes sense.

Anyway, most women, whether they are SAHPs or something else, jointly hold all assets with their husbands. And even if they don't (which I can't understand why they wouldn't want to) most states are legal community property states, so everything is jointly held no matter what.

I'm just saying it does shift the power, and the power could become imbalanced more easily. In the case of divorce, a SAHP will almost always be worse off than a working parent. And divorce rates are quite high, and sometimes divorce comes as a complete surprise.
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And curveballs ... dear God, I could write the book on those. Six years ago, I was one of those $100k people, homeowner, all smug with my dream career (full-time professional novelist ... how's that for a rarity?) ... and then the bottom dropped out. Second novel tanked, my first marriage fell apart, had major health crisis that kept me in and out of the hospital for the better part of a year, followed by a cross-country move, remarriage, surprise baby after infertility issues (while we were both temporarily unemployed), and here we are now, stuck in an expensive and combative job market with no real options, getting ready to move back to my old hometown with nothing but a credit card and financial aid to start over with. I will never, ever give someone glib financial advice or act complacent again. I am so humbled by the past five years of my life, I can't even begin to tell you.



Okay, maybe I am dense on the mathematical formulas you're using here (English major, what can I say?), but I still don't understand how having one person "In reserve" to get a job when the breadwinner loses his/her job is somehow better of an "option" than when one person loses their job and the other is already working. I would think that the second scenario is less disruptive and less of a scramble -- especially since you'd have NO money coming in from either partner right after a job loss, at least until SOMEbody got one. (Not trying to pick on you for raising the point, just honestly curious as to what the reasoning is exactly.)

I think that argument also massively overestimates how easy it would be for the second SAH partner to get a job quickly. I have been looking for a solid year, folks. Granted, I live in the job market from hell and have a very unconventional resume (high end creative and low end retail, what a combo), so I am an extreme example, but seriously, I can't even get work as a cashier on the weekends to help out. It is utterly demoralizing. Plus, when you are a SAH parent, it's really hard to find time to devote to job searching and going on interviews during regular business hours! We wound up putting DD in preschool a few mornings a week just to give me time to devote to the search (typing cover letters at 2 am was not working!), and the cost of that has sucked us dry even quicker (I am ashamed to tell you what 15 hours a week of preschool costs at the only school in town I can physically get to), but it was worth it to me ... there is NO way I could have done my grad school applications without some childcare, either (and now I am using that time to arrange temp housing and job search for DH, who works too many hours to have time to, before we move). The crappy thing is, you can't take the IRS childcare deduction unless you actually get work ... you can use the childcare to look for work, but if you don't find it, sorry Charlie, no $3k refund for you. (But I'm not bitter. No, really, I'm not.)
I hear ya abut eating humble pie, 6 years ago before we relocated 1100 miles away (thank-you joint custody..not we were doing quite well financially then we moved to a rural state where dh's earning potential took a tumble. So he had to become a freelancer since not many high paying jobs for editors in Maine, well its income flucatuation up the wazoo.. that's a whole other store but I just wanted to say your post resonated with me.

I read the Two-Income Trap and I do agree that the idea that the partner wo has been at home can just "get" a job if the primary breadwinner loses their job seems a bit iffy. Jobs are not just falling out the sky and unless that paerson at home has some incredible background and contacts, the job search would be equallly as hard as for the primary breadwinner. Last year when I lost my teaching gig, I thought it would easy to find another job...um, no instead we are now a 2 freelance income family which is quite stressful.

Shay

Mothering since 1992...its one of the many hats I wear.
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Old 10-02-2008, 05:19 PM - Thread Starter
 
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I read the Two-Income Trap and I do agree that the idea that the partner wo has been at home can just "get" a job if the primary breadwinner loses their job seems a bit iffy. Jobs are not just falling out the sky and unless that paerson at home has some incredible background and contacts, the job search would be equallly as hard as for the primary breadwinner. Last year when I lost my teaching gig, I thought it would easy to find another job...um, no instead we are now a 2 freelance income family which is quite stressful.

Shay
:

I'm reading the book now. I, too, find that concept (the SAHP in "reserve" concept) to be a bit iffy. I find other concepts and constructs in the book to be iffy, as well, but there are some good points.
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Old 10-02-2008, 05:23 PM - Thread Starter
 
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I am reading right now the book, "The Two Income Trap" by Elizabeth Warren and Amelia Warren Tyagi.

Anyway, I am almost half-way through the book, so pardon me if I get this wrong, and the authors explain this further in the book.

But, this passage raised my eyebrows. What do you think of this passage?

[Again, this is excerpted from the book. I want to make sure I properly quote and cite.]

"Inevitably, the Two-Income Trap affected the one-income family too. When millions of mothers entered the workforce, they ratcheted up the price of a middle-class life for everyone, including families that wanted to keep Mom at home. A generation ago, a single bread-winner who worked diligently and spent carefully could assure his family a comfortable position in the middle class. But the frenzied bidding wars, fueld by families with two incomes, changed the game for single-income families as well, pushing them down the economic ladder."

Thoughts?

I have many, but I'll post later.
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Old 10-02-2008, 05:30 PM
 
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You know - this blame the women in the workforce thing for societal ills is utter CRAP! I've gotta go to a meeting in 5 minutes. The runaway real estate market as the press coverage of the last few days will indicate WAS NOT (repeat NOT) the inevitable outcome of women entering the paid work force in large numbers. I think it had an awful LOT to do with banks repackaging loans and seeking to lend ever greater sums to ever more people so they could continue to repackage the mortgage-based securities. I'll post two good "nutshell" articles on this later.

However, I do think that women entering the work force in large numbers have contributed to
1) the paltry 12 week FMLA we have
2) ability to have some professional jobs go part time (lawyers and dermatologists come to mind).
3) ability for both parties to take time off for childcare
4) better balance for MEN in the workforce.

(my personal soapbox is that women in the workforce have led to greater flexibility and more work-life balance for EVERYONE). And Yes, I do know we still have a long way to go and that there are few of these benefits for those at the bottom of the workforce.

Third generation WOHM. I work by choice.
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Old 10-02-2008, 05:35 PM - Thread Starter
 
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You know - this blame the women in the workforce thing for societal ills is utter CRAP! I've gotta go to a meeting in 5 minutes. The runaway real estate market as the press coverage of the last few days will indicate WAS NOT (repeat NOT) the inevitable outcome of women entering the paid work force in large numbers. I think it had an awful LOT to do with banks repackaging loans and seeking to lend ever greater sums to ever more people so they could continue to repackage the mortgage-based securities. I'll post two good "nutshell" articles on this later.

However, I do think that women entering the work force in large numbers have contributed to
1) the paltry 12 week FMLA we have
2) ability to have some professional jobs go part time (lawyers and dermatologists come to mind).
3) ability for both parties to take time off for childcare
4) better balance for MEN in the workforce.

(my personal soapbox is that women in the workforce have led to greater flexibility and more work-life balance for EVERYONE). And Yes, I do know we still have a long way to go and that there are few of these benefits for those at the bottom of the workforce.

Thank you! While I was reading that excerpt, all I could think of was "housing market speculators" and "house flipping." Oh, yeah, and inflation.



Granted, I know they are looking at this long term, over a generation, but I feel they are not being accurate in accounting for what happened, and I have so many thoughts against what they said, I don't even know where to begin. I'm very curious to hear what others think (about post #133).
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Old 10-02-2008, 05:35 PM
 
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I think power imbalance is an issue. Even in a great marriage, where each parter's contribution is respected and valued, there can be power imbalances associated with money, especially if disagreements crop up.

Things can go along swimmingly until there is a disagreement. I'm talking about disagreements about fundamental and important things like schooling for the children, home birth vs hospital, etc. Those are just a few examples.

If you hold some of the purse strings, you have a little more say. Granted, some SAHMs have equal power, but I sometimes wonder if that power is granted or claimed. I mean, my DH definitely respected and listened to me more as a working person with a pay check and benefits than he has when I have been a SAHP. And I'm still using some of my paycheck in the form of savings! Sometimes, during an argument, he can say the most unfair, unsubstantiated things about how he earns the money. He never said that, not one time, when I actually earned a paycheck. More than once, when we aren't aguing, DH has said the money he earns while I'm a SAHP is the family's money, our mutual money. So, yes, I think during arguments the balance of power can be strained, and sometimes power is more granted than claimed, if that makes sense.

Anyway, most women, whether they are SAHPs or something else, jointly hold all assets with their husbands. And even if they don't (which I can't understand why they wouldn't want to) most states are legal community property states, so everything is jointly held no matter what.

I'm just saying it does shift the power, and the power could become imbalanced more easily. In the case of divorce, a SAHP will almost always be worse off than a working parent. And divorce rates are quite high, and sometimes divorce comes as a complete surprise.
My husband and I didn't have issues around money power when I was SAHMing.

But we did have two significant issues: one was around power in child-rearing. Because I was the go-to parent all day I ended up with a lot more 'say' in daily childrearing. I think there were lots of ways to address this but now that he's cut back on work a bit and I am gone part of the day we seem to make parenting decisions more equally.

The second was around what I'll call harmony. Dividing up the roles and responsibilities didn't work well for us. I was surprised at how quickly we lost sympathy for each other's struggles - not in some awful way but I forgot how TIRING meetings are and just saw them as escape from BabyWorld, and vice versa. Also he felt enormous economic pressure.

~ Mum to Emily, March 12-16 2004, Noah, born Aug 2005, Liam, born January 2011, and wife to Carl since 1994. ~
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Old 10-02-2008, 05:36 PM
 
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:

I think power imbalance is an issue. Even in a great marriage, where each parter's contribution is respected and valued, there can be power imbalances associated with money, especially if disagreements crop up.

Things can go along swimmingly until there is a disagreement. I'm talking about disagreements about fundamental and important things like schooling for the children, home birth vs hospital, etc. Those are just a few examples.
.
Reading your post was an “ah-ha” moment for me! DH and I had a perfect balance of power before DS, when we were both working (although I was working PT as a grad student) and contributing to the “household”. However, when I stayed home for a year after DS was born things completely changed. DH no longer contributed to taking care of the house and expected me to do *everything*. It was totally crazy and a rocky time for us - I kept trying to figure out what happened to the person I married. I thought that maybe the change was simply due to the stress that having a child puts on the relationship, but your comment just made me realize that it was probably because I was a SAHM and no longer working. DH assumed that I had nothing but time on my hands, even though was totally sleep deprived and exhausted, getting less than 4 hours of sleep a day for a YEAR!!! I was very resentful of the situation. I even worried that he would continue to act like this when I went back to work FT, but strangely enough, he didn’t. He once again became the guy I knew – helping out with chores and the kiddo all the time. Isn’t that weird?

(PS-I don’t want to make DH out to be a cad. He’s really an awesome guy and I wouldn’t trade him for anything! But it is interesting how attitudes change when one spouse isn’t working.)
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I was surprised at how quickly we lost sympathy for each other's struggles - not in some awful way but I forgot how TIRING meetings are and just saw them as escape from BabyWorld, and vice versa. Also he felt enormous economic pressure.
Yes, this is totally it!
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Old 10-02-2008, 05:37 PM
 
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I am reading right now the book, "The Two Income Trap" by Elizabeth Warren and Amelia Warren Tyagi.

Anyway, I am almost half-way through the book, so pardon me if I get this wrong, and the authors explain this further in the book.

But, this passage raised my eyebrows. What do you think of this passage?

[Again, this is excerpted from the book. I want to make sure I properly quote and cite.]

"Inevitably, the Two-Income Trap affected the one-income family too. When millions of mothers entered the workforce, they ratcheted up the price of a middle-class life for everyone, including families that wanted to keep Mom at home. A generation ago, a single bread-winner who worked diligently and spent carefully could assure his family a comfortable position in the middle class. But the frenzied bidding wars, fueld by families with two incomes, changed the game for single-income families as well, pushing them down the economic ladder."

Thoughts?

I have many, but I'll post later.
I know the book predates the housing crisis, but I think the housing crisis shows that the difference was in available credit, not two working partners. Granted, two salaries can service more debt... but as we've kind of discussed, childcare is such a large expense for most people that I don't think it was working PARENTS who ratcheted up the costs.

~ Mum to Emily, March 12-16 2004, Noah, born Aug 2005, Liam, born January 2011, and wife to Carl since 1994. ~
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Old 10-02-2008, 05:40 PM - Thread Starter
 
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My husband and I didn't have issues around money power when I was SAHMing.

But we did have two significant issues: one was around power in child-rearing. Because I was the go-to parent all day I ended up with a lot more 'say' in daily childrearing. I think there were lots of ways to address this but now that he's cut back on work a bit and I am gone part of the day we seem to make parenting decisions more equally.

The second was around what I'll call harmony. Dividing up the roles and responsibilities didn't work well for us. I was surprised at how quickly we lost sympathy for each other's struggles - not in some awful way but I forgot how TIRING meetings are and just saw them as escape from BabyWorld, and vice versa. Also he felt enormous economic pressure.
Everything you wrote, I nodded my head to. This is much like us. I am definitely the go-to parent, the parent who parents and cares for everything by default. It's as though it's all my responsibility as a manager and I don't get any help unless I delegate tasks. I get tired of delegating sometimes, and wish DH was more a co-pilot in this operation of our family.
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Old 10-02-2008, 05:41 PM - Thread Starter
 
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Reading your post was an “ah-ha” moment for me! DH and I had a perfect balance of power before DS, when we were both working (although I was working PT as a grad student) and contributing to the “household”. However, when I stayed home for a year after DS was born things completely changed. DH no longer contributed to taking care of the house and expected me to do *everything*. It was totally crazy and a rocky time for us - I kept trying to figure out what happened to the person I married. I thought that maybe the change was simply due to the stress that having a child puts on the relationship, but your comment just made me realize that it was probably because I was a SAHM and no longer working. DH assumed that I had nothing but time on my hands, even though was totally sleep deprived and exhausted, getting less than 4 hours of sleep a day for a YEAR!!! I was very resentful of the situation. I even worried that he would continue to act like this when I went back to work FT, but strangely enough, he didn’t. He once again became the guy I knew – helping out with chores and the kiddo all the time. Isn’t that weird?

(PS-I don’t want to make DH out to be a cad. He’s really an awesome guy and I wouldn’t trade him for anything! But it is interesting how attitudes change when one spouse isn’t working.)
Ditto for us.
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"Inevitably, the Two-Income Trap affected the one-income family too. When millions of mothers entered the workforce, they ratcheted up the price of a middle-class life for everyone, including families that wanted to keep Mom at home. A generation ago, a single bread-winner who worked diligently and spent carefully could assure his family a comfortable position in the middle class. But the frenzied bidding wars, fueld by families with two incomes, changed the game for single-income families as well, pushing them down the economic ladder."

Thoughts?
This is totally ridiculous and not grounded in any sort of reality! I've watched housing prices increase 20 percent in the last 8 years in my town all because of housing speculators tying to get rich quick. There was one house in our old neighborhood (where we rented an apartment) that was on the market 5 times in 5 years...no one ever lived there, it was just flipped and flipped and flipped. I get some satisfaction in knowing that these people are stuck with houses they cannot sell now.
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Old 10-02-2008, 06:24 PM - Thread Starter
 
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all because of housing speculators tying to get rich quick. There was one house in our old neighborhood (where we rented an apartment) that was on the market 5 times in 5 years...no one ever lived there, it was just flipped and flipped and flipped. I get some satisfaction in knowing that these people are stuck with houses they cannot sell now.
:

Yeah, but too many families, individuals, and others who are actually interested in home ownership, and community investment, for the purpose of a place to live are also hurt.

Homes should never have been able to be such an easy short term investment. The government could have prevented speculation, and still captured the economic stability of people buying up housing to keep the economy going, if they had just imposed a tax for flipping a house in let's say 5 years or something.

I hate what happened across the country due to housing speculators in just a few cities. It impacted all cities.

It's a shame. A lot of people are hurt in the long run for some big short term gains made by a few people. I have no sympathy for housing speculators and housing flippers. Not enough of them lost enough money in my opinion.

Houses were supposed to be long term investments. You were supposed to make $100k in 50 years, not 2 years.



(Sorry, it is OT, but somewhat related, and it really bothers me that this was allowed to happen)
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Old 10-02-2008, 06:32 PM
 
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Yeah, but too many families, individuals, and others who are actually interested in home ownership, and community investment, for the purpose of a place to live are also hurt.
Yes, this is why it took us 8 years to buy a house...we had to wait for the "bubble" to burst (it started 2 years earlier here than everywhere else, because unemployment was so much higher) so that we could buy a modest, older home in a moderate neighborhood for less than an arm-and-leg price. As it is, we still paid too much for the house and may have to sell for less than we paid (plus we've put 1,000s into remodeling in the last year).

BTW: we found out at closing that our $90K house cost only $45K, 15 years ago. Does that suck or what?!
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Old 10-02-2008, 06:47 PM - Thread Starter
 
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Yes, this is why it took us 8 years to buy a house...we had to wait for the "bubble" to burst (it started 2 years earlier here than everywhere else, because unemployment was so much higher) so that we could buy a modest, older home in a moderate neighborhood for less than an arm-and-leg price. As it is, we still paid too much for the house and may have to sell for less than we paid (plus we've put 1,000s into remodeling in the last year).

BTW: we found out at closing that our $90K house cost only $45K, 15 years ago. Does that suck or what?!


I've been following the housing crisis closely in the newspapers and on the news (tv), and I've read so many stories of people who are upside down in their mortgages.

They bought a house last year in the pricier markets like in California for upwards of $400k (which seems outrageously expensive, but is median value or less in a lot of cities in California) and now their $400k house is valued at $300k one year later.

It's a shame. It's criminal. And all this happened in less than 10 years because of de-regulation and some - what's the word - collusion? between appraisers, speculators, and banks in certain areas.

It's not so much the people who are being foreclosed on, although that does contribute, it's the unregulated and untaxed speculation.

It makes me sick.
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Old 10-02-2008, 06:53 PM
 
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My husband and I didn't have issues around money power when I was SAHMing.

But we did have two significant issues: one was around power in child-rearing. Because I was the go-to parent all day I ended up with a lot more 'say' in daily childrearing. I think there were lots of ways to address this but now that he's cut back on work a bit and I am gone part of the day we seem to make parenting decisions more equally.

The second was around what I'll call harmony. Dividing up the roles and responsibilities didn't work well for us. I was surprised at how quickly we lost sympathy for each other's struggles - not in some awful way but I forgot how TIRING meetings are and just saw them as escape from BabyWorld, and vice versa. Also he felt enormous economic pressure.
This was my experience as well. We really didn't like it. We thought we were losing touch with each other. He felt disconnected from home and totally stressed anytime layoffs were mentioned where he worked; I was bored and missed professional work.

I never felt like we had a big power imbalance, but maybe if it had continued for ten years it could have happened. I must say that as DS gets older, I run into a lot more families where I feel there is a fundamental power imbalance.
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Old 10-02-2008, 06:54 PM
 
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Homes should never have been able to be such an easy short term investment. The government could have prevented speculation, and still captured the economic stability of people buying up housing to keep the economy going, if they had just imposed a tax for flipping a house in let's say 5 years or something.
FYI, the government does have a tax on capital gains from "flipping" houses. Capital gains are taxed no matter how long you held the property, but there is a significant exemption for people selling their primary residence if they have held it for at least two full years.
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Old 10-02-2008, 07:06 PM
 
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Thank you so much for saying that -- I could seriously cry right now reading it. So often I feel like a selfish idiot who's just doing things wrong, searching for the "right thing" to do that will magically fix our situation.
You're not a selfish idiot! Don't think that! I read everything you're doing, and you sound like somebody who is working very hard to make things better for her family -- the exact opposite of selfish.

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And curveballs ... dear God, I could write the book on those. Six years ago, I was one of those $100k people, homeowner, all smug with my dream career (full-time professional novelist ... how's that for a rarity?) ... and then the bottom dropped out. Second novel tanked, my first marriage fell apart, had major health crisis that kept me in and out of the hospital for the better part of a year, followed by a cross-country move, remarriage, surprise baby after infertility issues (while we were both temporarily unemployed), and here we are now, stuck in an expensive and combative job market with no real options, getting ready to move back to my old hometown with nothing but a credit card and financial aid to start over with. I will never, ever give someone glib financial advice or act complacent again. I am so humbled by the past five years of my life, I can't even begin to tell you.
I think many, many people, even people who live frugally and reasonably, just do not have an appreciation of how much plain and simple luck is involved in their daily lives. Having a healthy child, having no major accidents, having decent health, having a job that didn't hit the skids suddenly: that all affects family income tremendously, and it's all pure and simple luck.

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Okay, maybe I am dense on the mathematical formulas you're using here (English major, what can I say?), but I still don't understand how having one person "In reserve" to get a job when the breadwinner loses his/her job is somehow better of an "option" than when one person loses their job and the other is already working. I would think that the second scenario is less disruptive and less of a scramble -- especially since you'd have NO money coming in from either partner right after a job loss, at least until SOMEbody got one. (Not trying to pick on you for raising the point, just honestly curious as to what the reasoning is exactly.)
I don't buy the idea that the SAHP can ride in to save the day if the primary breadwinner loses his job. That sounds like something written by somebody who has never actually looked for a job or childcare.

Where I live, childcare wait lists are one to two years. It's a joke to think that a SAHP could get a job in a month and be out earning, especially out earning enough to cover the mortage. The SAHPs I know who have been looking for jobs have been having a very, very hard time of it, and they're not being picky.

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Originally Posted by That Is Nice View Post
But, this passage raised my eyebrows. What do you think of this passage?

[Again, this is excerpted from the book. I want to make sure I properly quote and cite.]

"Inevitably, the Two-Income Trap affected the one-income family too. When millions of mothers entered the workforce, they ratcheted up the price of a middle-class life for everyone, including families that wanted to keep Mom at home. A generation ago, a single bread-winner who worked diligently and spent carefully could assure his family a comfortable position in the middle class. But the frenzied bidding wars, fueld by families with two incomes, changed the game for single-income families as well, pushing them down the economic ladder."

Thoughts?

I have many, but I'll post later.
I think this reads like somebody who isn't very aware of the history of the middle class in this country and who has a highly idealized view of the post-war suburban period. The author forgot to mention race -- this sure wasn't true if you weren't white. She forgot to mention location -- this wasn't happening in all areas of the country. She wasn't mentioning marital status -- families where the husbands left or died were usually left destitute. She didn't mention offshoring (which started far earlier than people usually think) -- what happened to all those middle-class families when the great industrial plants of the East and Midwest closed down? She didn't mention nonreported income -- a lot of these supposedly single-income families were in fact truly two-income because the mother's wages weren't reported. I could go on, but this seems like an extremely lightweight analysis to me.

It's a nice soundbite to blame WOHMs because, hey, we're convenient targets for all of societal ills, but doesn't make me think very highly of the author's research, historical understanding, or general analysis.
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Old 10-02-2008, 07:09 PM
 
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Great thread! I have a few thoughts:
1) regarding the benefit of the 'reserve' parent: in the scenerio the author is describing, the family is using most/all of the 2 incomes. With a job loss, your only option is for the person to get another job, and fast. In the 1-income household, the family has a few options: have dad find a job, have mom find a job, or have both find a job to make up the previous 1 income. Theoretically, there is an additional benefit because there are two people with two different skill sets looking for employment. Of course, as others mentioned, there are individual circumstances where this would not work as smoothly as described. And, obviously it's different if the family is NOT depending on 100% of both incomes.

2) while I agree that certainly systemic change is needed, I don't see how universal healthcare is going to solve anyone's problems. Exactly when has a government-run system been cheap or efficient or effective? (Keep in mind that the government educates children in this country for about $10,000 per child per year. Private schools on average cost much less and produce better results.) There are many other ways to decrease healthcare costs, such as:
-moving healthcare consumers closer to their healthcare costs through the use of HDHPs with HSAs or something similar. (Our family switched from comprehensive coverage to catastrophic coverage with an HSA and saved $550 a month in premiums. That's a little more savings than cancelling the cable.)
-allowing people a standard health insurance deduction from their income taxes (this removes the tax penalty for people who are self-insured or who might choose a cheaper plan than one provided through their employer)
-allowing people to purchase insurance plans from any state, thus increasing competition (last time I checked, there were about 3 companies who offer insurance in my state. Three.)
-tort reform to limit medical lawsuits, which drive up liability insurance costs that are then passed onto consumers
-laws to make homebirth legal in every state, thus allowing insurance and government health plans to cover it (and, again, increasing competition by increasing the number of care providers)

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Old 10-02-2008, 07:20 PM - Thread Starter
 
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Originally Posted by Azuralea View Post
This was my experience as well. We really didn't like it. We thought we were losing touch with each other. He felt disconnected from home and totally stressed anytime layoffs were mentioned where he worked; I was bored and missed professional work.

I never felt like we had a big power imbalance, but maybe if it had continued for ten years it could have happened. I must say that as DS gets older, I run into a lot more families where I feel there is a fundamental power imbalance.
:

I agree...I sense a power imbalance in a lot of the families I know who happen to have a SAHM. But then it's just a sense. I've heard comments here and there that make me think this, both when the couple is together, and when the SAHM is not around her husband.



But what do I know, really? Marriages have a lot of private moments.
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