[GirlySports]

Elizabeth Warren's book, The Two-Income Trap really addresses these issues. A must read.


https://www.vox.com/policy-and-polit...th-warren-book

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.


But most families, of course, didn’t build up big financial cushions. The main financial savings vehicle for the American middle class was the owner-occupied home in the good school district. But the only way to tap that asset is to sell it and move someplace less desirable, disrupting children’s lives and risking a tumble out of the middle class.
Consequently, families in practice try to deal with financial hardship by availing themselves of the wide range of consumer credit opportunities made available by the ongoing deregulation of the financial industry. This combination of brittle household finances, stagnant discretionary incomes, and wide availability of poorly understood debt products fundamentally explains the runup in bankruptcies.