MSNBC has an interesting review of a new book entitled The Two-Income Trap: Why Middle Class Mothers and Fathers Are Going Broke. While the first part of the piece is anecdotal, it brings up some startling statistics:

This year, more people will end up bankrupt than will suffer a heart attack. More adults will file for bankruptcy than will be diagnosed with cancer. More people will file for bankruptcy than will graduate from college. And, in an era when traditionalists decry the demise of the institution of marriage, Americans will file more petitions for bankruptcy than for divorce.

Amazing. And the profiles are counterintuitive:

The families in the worst financial trouble are not the usual suspects. They are not the very young, tempted by the freedom of their first credit cards. They are not the elderly, trapped by failing bodies and declining savings accounts. And they are not a random assortment of Americans who lack the self-control to keep their spending in check. Rather, the people who consistently rank in the worst financial trouble are united by one surprising characteristic. They are parents with children at home. Having a child is now the single best predictor that a woman will end up in financial collapse.


By the usual logic, sending a second parent into the workforce should make a family more financially secure, not less. But this reasoning ignores an important fact of two-income life. When mothers joined the workforce, the family gave up something of considerable (although unrecognized) economic value: an extra skilled and dedicated adult, available to pitch in to help save the family during times of emergency. When Junior got sick, the stay-at-home mother was there to care for him full-time, without the need to hire a nurse. If Dad was laid off, Mom could enter the workforce, bringing in a new income until Dad found another job. And if the couple divorced, the mother who had not been working outside the home could get a job and add new income to support her children. The stay-at-home mother gave her family a safety net, an all-purpose insurance policy against disaster.

If two-income families had saved the second paycheck, they would have built a different kind of safety net — the kind that comes from having plenty of money in the bank. But families didn’t save that money. Even as millions of mothers marched into the workforce, savings declined, and not, as we will show, because families were frittering away their paychecks on toys for themselves or their children. Instead, families were swept up in a bidding war, competing furiously with one another for their most important possession: a house in a decent school district. As confidence in the school system crumbled, the bidding war for family housing intensified, and parents soon found themselves bidding up the price for other opportunities for their kids, such as a slot in a decent preschool or admission to a good college. Mom’s extra income fit in perfectly, coming at just the right time to give each family extra ammunition to compete in the bidding wars — and to drive the prices even higher for the things they all wanted.

The average two-income family earns far more today than did the single-breadwinner family of a generation ago. And yet, once they have paid the mortgage, the car payments, the taxes, the health insurance, and the day-care bills, today’s dual-income families have less discretionary income — and less money to put away for a rainy day — than the single-income family of a generation ago. And so the Two-Income Trap has been neatly sprung. Mothers now work two jobs, at home and at the office. And yet they have less cash on hand. Mom’s paycheck has been pumped directly into the basic costs of keeping the children in the middle class.

At the same time that millions of mothers went to work, the family needed the stay-at-home mom (or a costly replacement) more than ever. The number of frail elderly, most of whom must depend on family for daily care, spiraled upward. Hospitals began discharging patients “quicker and sicker,” expecting the family to pick up the task of nursing them back to health. With Mom in the workforce, parents were faced with a painful choice between paying for expensive care and taking time off work. At the same time, the divorce rate continued its upward climb. This situation was compounded by a leaner-and-meaner business climate that closed plants and laid off workers with alarming frequency. In this tougher world, millions of two-income families learned the price of living without a safety net.

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 breadwinner who worked diligently and spent carefully could assure his family a comfortable position in the middle class. But the frenzied bidding wars, fueled by families with two incomes, changed the game for single-income families as well, pushing them down the economic ladder. To keep Mom at home, the average single-income family must forfeit decent public schools and preschools, health insurance, and college degrees, leaving themselves and their children with a tenuous hold on their middle-class dreams.


The Two-Income Trap is thick with irony. Middle-class mothers went into the workforce in a calculated effort to give their families an economic edge. Instead, millions of them are now in the workplace just so their families can break even. At a time when women are getting college diplomas and entering the workforce in record numbers, their families are in more financial trouble than ever. Partly these women were the victims of bad timing: Despite general economic prosperity, the risks facing their families jumped considerably. Partly they were the victims of optimistic myopia: They saw the rewards a working mother could bring, without seeing the risks associated with that newfound income. And partly they were the victims of one another. As millions of mothers poured into the workplace, it became increasingly difficult to put together a middle-class life on a single income. The combination has taken these women out of the home and away from their children and simultaneously made family life less, not more, financially secure. Today’s middle-class mother is trapped: She can’t afford to work, and she can’t afford to quit.

Quite interesting.

Part of this strikes me as misleading. To say that people have less discretionary income now than in the past ignores the fact that, while shelter isn’t discretionary, luxury is. Rather clearly, people on the aggregate are living far more affluent lifestyles than they did even 20-25 years ago. The size of the median home is huge compared to the norm a generation ago. Most middle class families drive more luxurious cars, eat at restaurants more routinely, and have much more material wealth than their 1970s counterparts. But the price of that seems to be that many of us are only a couple paychecks away from going broke.

FILED UNDER: Economics and Business, , , , , , ,
James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College. He's a former Army officer and Desert Storm veteran. Views expressed here are his own. Follow James on Twitter @DrJJoyner.


  1. Blogeline says:

    This is very interesting. I was just thinking about this this weekend. I started working at the beginning of the year, after graduating from College in December.
    Now, we are looking for a house in the county we are currently living in (Military Housing), and it is going to increase our monthly spending. This means, that we now depend on my income.

    I do agree with you too, though. Ever since our monthly income increased, we have been out to eat a lot more. It is easier now to buy clothes for the kids. We don’t think about it that much anymore.
    On the other hand, we are not really thinking about the future and how we should finacially prepare ourselves. Now, after talking to so many banks about home mortgages, we are getting more careful about how we spend our money and how much we need to save.

  2. JohnC says:

    Choosing food or heat. This was back in April.

    Poor American Families Face `Eat or Heat’ Dilemma

    Having grown in up in a family that had to make just these choices, where my mother worked just to barely make ends meet, let me tell you that it wasn’t about choosing between luxuries and basic necessities.

    Considering health insurance went up in double digit percentages TWICE in the last two years, there’s a heck of a lot of stuff that either negates or even undercuts any of the advances you’re assuming are making people more well off.

    Sure, we have a care that can get far better gas mileage than we could 20 years ago. But most people are driving cars made 10 years ago. And even if they could afford a new one, the savings in gas are eaten up 10x by the increases in heath care.

    Live the lifestyle before you start making proclamations about how they must be mistaken about their conditions.

  3. James Joyner says:

    John, The article isn’t about people in poverty facing “heat or eat” conditions. It’s about middle class people who are living in McMansions and otherwise quite well off who are a job change away from bankruptcy.

    There’s little question that, in aggregate, middle class Americans are a whole lot better off now than 20-30 years ago. While some people are keeping cars longer–partly, because they last a lot longer–the trend toward extremely expensive luxury cars and SUVs dominates the marketplace. People drink gourmet coffee instead of Folgers, eat at a restaurant instead of making Hamburger Helper, etc.

    Now, the down side of all these is obvious. Not only are the well-off closer to the edge than before, but those at the bottom of the ladder are comparatively worse off. Frankly, I don’t know how one would live in the D.C. area without a pretty decent income. I earn one and can still barely afford it; and even there, I can buy a lot less house than I was accustomed to before moving here.

  4. Blogeline says:

    That is true. Before I stated working, we were living paycheck-to-paycheck and had to make choices between visiting family for holidays (12-hour drive to Florida or a very expensive flight to Germany) or paying for summer-camp.
    Luckily, my husband is in the military, so we live in base-housing and have healthcare, although we still pay for it.
    Growing up, we never had a brand-new car or even owned a home. Both my parents worked. I was home alone during school breaks, because my parents didn’t have the money to pay for a babysitter. But that was also in Germany, and I don’t know any stay-at-home moms over there. It’s a different culture, I guess.

  5. Blogeline says:

    I agree with James. Unless you want a one-hour commute, you have to pay about $350,000 for a townhouse!!!!!!
    Not everyone has to income for that.

  6. JohnC says:

    Sorry for going off the subject. It strikes a nerve with me as so many of my rich friends seem to make this same argument about the poor. My apologies.

    I can’t really say because I live in CA, in the SF bay area. There is no middle class here. If you have a family of two and are making 60K, you’re living close to the poverty line. Rent is still outrageous, a home is out of the question, and you have to drive everywhere so you have 2 cars and pay through the nose for gas (we have the highest prices in the US, afaik).

    Most of the “middle class” I know are all teachers and stuff, and they’re sweating it out major. They don’t buy gourmet coffee, they buy sensible cars and have very few “luxuries”.

    I don’t know if this translates to the rest of the country. Who knows.

    But I can’t believe everyone is getting squeezed because they’re trying to keep buying at Star Bucks and they need to keep up the payments on the Lexus. Maybe I’m wrong. I’ll keep an open mind.

  7. James Joyner says:

    The Slate piece and book on which it’s based deal with one slice of the economy, which certainly isn’t the whole story.

    Clearly, we live in a land of many economies. Much of California and places like Manhattan and Boston are just off the charts. Other Metro areas like D.C. aren’t quite as bad but still have astronomical housing costs. Most of the Deep South and Southwest are on the other end of the scale–most people don’t make much money, but Wal-mart cashiers can afford to own their own homes.

  8. Blogeline says:

    Of course, not everybody that makes a certain amount of money and is considered to be middle class or even above middle class, is poor as well. It seems just easier to become poor, because of all the high costs. And it makes sense that it affects “richer” people in those metro areas, because those are also the areas where you can earn that much money.
    You just have to set your priorities straight and think about what you want to achieve and where you want to be in 10-15 years or by time you retire. Who needs Starbucks coffee everyday anyways? Invest money and buy your own espresso machine.

  9. JohnC says:

    Well, I think that completely discounts the “living on the edge” psychology that people face. If you have two kids, losing health insurance is a major, major worry. If you’re constantly putting up serious money for rent, then that house which is going to provide for your retirement isn’t just a reality. And investments – considering that most lost their shirts in their investments over the last couple of years… well, that’s not really great advice. They’ll need another 5-10 years of normal growth just to see their 401K come back to parity. And that’s just those who can afford to put something aside.

  10. Paul says:

    Clearly, we live in a land of many economies. Much of California and places like Manhattan and Boston are just off the charts. Other Metro areas like D.C. aren’t quite as bad but still have astronomical housing costs. Most of the Deep South and Southwest are on the other end of the scale–most people don’t make much money, but Wal-mart cashiers can afford to own their own homes.

    So which is “better?”

    Or maybe which is better for the poor?

    It has always struck me as odd that the areas where liberals abound and are worried about the poor, there are none.

    All those “blue” areas where liberals are making policy and are OH SO willing to tell the rest of us how to treat poor people are the most “poor people hostile” areas in the country.

    Meanwhile they bash the policies supported by the “red” states full of poor people who have a better standard of living then they ever could in a blue state.

    Go figure.

    As to the substance of the article, I think by and large he nails it. I see many people I know in that number. (both in the south and in the “blue” areas.)


  11. JohnC says:

    Well, considering that we “liberal” states pump an enormous amount of money that the red states need, maybe we should just take our money and leave the red states to flop around with no infrastructure.

    Yea, that’d show ’em.

    Geesh, Paul.

  12. Paul says:

    And considering the red states can feed themselves and the blue states can not, maybe they should keep their harvest and let you to flop around in search of food.

    Yea, that’d show ’em.


    Nice try, but as usual, you dodged the point.

  13. JohnC says:

    Actually, my point is WE’RE ALL IN THIS TOGETHER. As much as you want to make it an “us or them” in your politics. The reason why we give boatloads of money to the other states is because we really, really like them. We need them.

    Oh, and just for grins, CA is not exactly an agricultural midget, mind you. In addition to the 5th largest economy on the planet, that is.

    The reason why we’re such a great country is because we’re such a diverse, mutually supporting country.


    If we used your rules, this wouldn’t be a country at all.

  14. Paul says:


    You apparently missed the point. (or avoided it)

    For the sake of civility I’ll let it drop and not repreat the point but perhaps you would be well served by actually READING what people type before you make a wide eyed reply.


  15. JohnC says:

    Even your original argument doesn’t hold up.

  16. James Joyner says:


    I’m not sure those data show anything meaningful. “Poverty” is defined as by the federal government solely by income, with adjustments made only for Alaska and Hawaii. See the charts here.

    Obviously, even in the poorest states, a family of four making $18,400 a year isn’t well off. But in many rural areas, that’s enough to rent a livable house, maintain a used car, and buy groceries–even without government subsidies. In Manhattan, Los Angeles, or even Metro D.C. there’s no way to they could live independently on that.

    Any comparative measure of wealth using only income, without adjustment for local cost of living, isn’t worth very much.

  17. Paul says:

    Another sigh..

    I find it interesting that you say my point is wrong when you make the same point when you say:

    I can’t really say because I live in CA, in the SF bay area. There is no middle class here.

    And I find it more interesting that you are suddenly so knowledgeable when earlier you said:

    “I don’t know if this translates to the rest of the country.”

    And I found it down right laughable when you said:

    I’ll keep an open mind.

    We both knew better.

    Arguing a point is fine. I do it with the best of them. But when you simply argure to be in an argument it not only ceases to be productive it ceases to be fun. If you care to debate a point I’ll go multiple rounds with a good heart and never take it personal or get annoyed.

    BUT when you make silly points, cite data that is completely meaningless, use non sequitur arguments, or distort things I tire quite easily.

    We can all draw our own conclusions in life. But drawing conclusions requires accurate facts. When you cease to care about facts or putting those facts into perspective, it is no longer a debate over ideas, it is a religion. If you care to debate with accurate facts, I’m game. If you care to throw out whacky inaccurate statements, please give my posts a pass. All it does is really chap my tail and I’m really not a friendly guy when that happens.

  18. JohnC says:

    Oooh. That hurts Paul. Really.

    My point first of all, which you missed entirely, was the blue states give far more money than they receive. The recipients are the Red states, which get far more money than they give.

    I haven’t always lived in SF, rather most of my life was spent in Colorado and Ohio. My family is lower middle class, so I have a reasonable experience that is far from what I live now.

    And the point of my second link was that poverty is getting better. You’ve made quite a point of saying that liberal policies haven’t done squat and just looking at the facts over a ten year period shows otherwise.

    Geez louis Paul. Lighten up.