The Two-Income Trap

Friday, February 4th, 2011

Ilkka describes Elizabeth Warren, author of The Two-Income Trap, as one of the few sane American liberals who defends middle-class norms:

The basic thesis is that even though modern families have two wage earners, this doesn’t provide extra financial security unless they save more, which most don’t. Also, having two incomes doubles the probability that one of them goes suddenly away, and unlike in a one-income family, there is no slack since the other partner can’t join the workforce to bring in extra dough in case of a layoff.

Furthermore, families have to zero-sum-compete with all other two-income families for ever scarcer goodies. For example, the first fifth of this book shows how housing in America has become so expensive because middle class families want their kids to go to “good schools” (a euphemism for “good people”). Public schools in desirable and thus expensive districts are already de facto private schools; the “tuition fee” is just paid to the mortgage company. Decoupling your home address from your school address by school vouchers would alleviate this problem. Desirable schools with more people coming in than they could take would raise their prices and/or select students with entrance exams, just like good universities already do and progressives have no problem with it.

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