Rediscovering the family.(The Two-Income Trap: Why Middle Class Mothers and Fathers Are Going Broke (With Surprising Solutions That Will Change Our Children's Futures))(Book Review)

The Two-Income Trap: Why Middle Class Mothers and Fathers Are Going Broke (With Surprising Solutions That Will Change Our Children's Futures)

by Elizabeth Warren and Amelia Warren Tyagi

(Basic, 272 pp., $26)

This book is a fine example of post-feminist angst. On one hand, the authors remain firmly bound to "the best part of the feminist movement--the rock-solid belief that women who want to work should have every opportunity to do so." On the other hand, they document how this feminist economic project has produced widespread disaster for American families, children ... and women as well.

Harvard bankruptcy-law professor Elizabeth Warren and her daughter Amelia Warren Tyagi report that the feminists' coveted "two-breadwinner family" has, in practice, brought the "dance of financial ruin." Back in 1981, a mere 69,000 women had their names on bankruptcy petitions; by 2001, over 500,000 women did. Bearing a child has now become "the single best predictor that a woman will end up in financial collapse." Married couples with children are more than twice as likely to file for bankruptcy as their childless counterparts. Women entering "the feminist dream"--a fresh no-fault divorce, custody of the children, ample child support, a good middle-class job, a nice home--face even greater odds of disaster. More than one of every six such mothers will file for bankruptcy in the current decade; among newly single mothers who attended college, the rate is higher still.

Two-breadwinner families, it turns out, are simply awash in debt. In 1981, savings made up 11 percent of average personal income, and credit-card debt 4 percent. By 2000, savings were minus 1 percent and credit-card debt a sobering 12 percent. Overall, inflation-adjusted credit-card debt rose from $10 billion in 1968 to a staggering $600 billion in 2000. Nearly half of American households are near the line where turning to bankruptcy makes good economic sense.

How did this happen? Warren and Tyagi argue persuasively that mass "over-consumption" is not the problem. Americans actually spend proportionately less these days on items such as food and clothing than they did in the 1960s. Instead, the authors point to the unintended consequences of sending 20 million American mothers to work. Rather than gaining more disposable household income, families saw real wages for men decline: the predictable result of more laborers pursuing the same number of jobs. Day-care bills and higher marginal taxes combined with the costs of a second car and swollen restaurant bills to absorb a good share of the mothers' new income. The higher nominal incomes of two-earner families also led to a fresh "bidding war" for nice homes in good suburban school districts, sending mortgage costs soaring.