It does not take an expert to see that families are having a hard time in America. Manufacturing jobs — long seen as one of the best ways for a man with no college degree to support his family — are vanishing. The tech bust has left many educated professionals scrambling to avoid long term unemployment. Among those lucky enough to still have jobs, Americans have less leisure time than anytime after the 40 hour workweek was “mandated.” Schools are by all accounts not giving young people an adequate education, particularly when compared to the education of 50 or 100 years ago. Our children’s academic accomplishments are dwarfed by those from most other industrialized nations. Crime rates are dropping, but Americans feel less safe than ever. Personal debt is at incredible levels, consumers are desperate to refinance where they can, and the Government has sold them down the river by tightening up bankruptcy law and adding needless layers of complexity under the guise of a “tax cut.”
There are many theories regarding the causes of “The Problem With America These Days.” Unfortunately, many of them center on such untenable ideas as “It’s because we’ve lost Old Time Religion” (oh yeah, things were much better in Salem) or “It’s because there’s no respect for the Family anymore” (define respect and family so we can talk) or even “It’s all the fault of Women’s Lib and mothers working outside the home.”
The idea of Moms With Jobs is really not that new. Moms have been helping out with the family finances since biblical times and through the ages, but the amount of work required to run a family home had generally prevented most moms from being full time members of the workforce.* Mandatory school attendance and labor saving devices have made possible the Mom With Career. However, both parents working can be a surprising drain on the family finances.
There are expenses associated with work beyond increased tax liability (the argument used by some Republicans in the past about “mom working just to pay the taxes” is ludicrous, since you aren’t taxed on money you don’t make). To send mom to work means she will need more reliable transportation than she would need to just get the groceries, take the kids to school, and pick up the dry cleaning. Speaking of dry cleaning, she will need work attire, and she will need to have it cleaned. She will also have to arrange child care, which is by no means inexpensive, particularly if she wants licensed care by someone who will not jeopardize the health and safety of her child. She will also be having lunch out more often, meaning she will spend a whole lot more on lunch than if she were eating peanut butter sandwiches with the kids. There will also be a lot more take-out and convenience food in the family menu, and that is going to cost more money. Despite the potentially deleterious effects on the family health and waistline, nobody is really going to want to cook a nice meal after working all day and fighting traffic home. These costs vary from family to family, but they add up in a hurry. They can easily consume mom’s paycheck.
Bankruptcy expert Elizabeth Warren admits this while offering up another way that the two-income family is falling behind. If I may quote: “Presenting carefully researched economic data to support their arguments, the authors contend that, contrary to popular myth, families aren’t in trouble because they’re squandering their second income on luxuries. On the contrary, both incomes are almost entirely committed to necessities, such as home and car payments, health insurance and children’s education costs. When an unforeseen event such as serious illness, job loss or divorce occurs, families have no discretionary income to fall back on.” Her thesis specifically includes the idea that, based on their aggregate income, families are buying (and bidding up) houses in desirable neighborhoods with good schools. Furthermore, that “more reliable transportation” I mentioned as a necessary expense of mom working often is turning out to be a new car that the family can only afford because both parents are working. Interestingly, this book was written with her daughter; this would tend to suggest she knows something about being a Mom With Career. This is not from some two-bit economist sociologist wannabe, but from a distinguished Harvard professor with a list of publications and accomplishments longer than your arm. Nevertheless, the ideas are controversial.
Be of good cheer, as she does provide suggested solutions. First, arrange the finances such that necessities can be paid out of one paycheck. Then the second income becomes truly “extra” and can be used on luxuries like saving for retirement or eating out without guilt. She furthermore suggests regulatory reforms to require bigger down-payments on houses to discourage getting overextended on mortgage payments, capping credit card interest rates and fees, school vouchers, and better education about financial planning for those of us who have more liabilities than assets.
Something to think about.
* The single mother has also been with us throughout the ages, since the first time a father died or walked out on his family. Single mothers almost by definition have to earn a living in addition to all the expected activities of Mom. There is nobody else to do it.