Cover image for The two-income trap : why middle-class mothers and fathers are going broke
Title:
The two-income trap : why middle-class mothers and fathers are going broke
Author:
Warren, Elizabeth.
Personal Author:
Publication Information:
New York : Basic Books, [2003]

©2003
Physical Description:
vii, 255 pages : illustrations ; 25 cm
Language:
English
Contents:
Just the way she planned -- The over-consumption myth -- Mom : the all-purpose safety net -- The myth of the immoral debtor -- Going it alone in a two-income world -- The cement life raft -- The financial fire drill.
ISBN:
9780465090822
Format :
Book

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Central Library HQ536 .W35 2003 Adult Non-Fiction Non-Fiction Area
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Summary

Summary

More than two decades ago, the women's movement flung open the doors of the workplace. Although this social revolution created a firestorm of controversy, no one questioned the idea that women's involvement in the workforce was certain to improve families' financial lot. Until now.In this brilliantly argued book, Harvard Law School bankruptcy expert Elizabeth Warren and business consultant Amelia Tyagi show that today's middle-class parents are suffering from an unprecedented and totally unexpected economic meltdown. Astonishingly, sending mothers to work has made families more vulnerable than ever before. Today's two-income family earns 75% more money than its single-income counterpart of a generation ago, but actually has less discretionary income once their fixed monthly bills are paid.How did this happen? Warren and Tyagi provide convincing evidence that the culprit is not "overconsumption," as many critics have charged. Instead, they point to the ferocious bidding war for housing and education that has quietly engulfed America's suburbs. Stay-at-home mothers once provided a financial safety net if disaster struck; their move into the workforce has left today's families chillingly at risk. The authors show why the usual remedies--child-support enforcement, subsidized daycare, and higher salaries for women--won't solve the problem, and propose a set of innovative solutions, from rate caps on credit cards to open-access public schools, to restore security to the middle class.


Author Notes

Elizabeth Warren worked as an elementary school teacher, a lawyer, and a law professor at Harvard University. She is the senior senator from Massachusetts.

In the aftermath of the 2008 financial crisis, she served as Chair of the Congressional Oversight Panel for the Troubled Asset Relief Program (TARP). Her efforts to protect taxpayers, to hold Wall Street accountable, and to ensure tough oversight of both the Bush and Obama Administrations won praise from both sides of the aisle. The Boston Globe named her Bostonian of the Year in 2009 for her oversight efforts. She helped created the Consumer Financial Protection Bureau.

She is also the author of numerous books including All Your Worth: The Ultimate Lifetime Money Plan, The Two-Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke, and A Fighting Chance.

(Bowker Author Biography)


Reviews 2

Publisher's Weekly Review

Warren, a law professor at Harvard (The Fragile Middle Class) and her daughter Tyagi, a former McKinsey consultant, have joined forces here to argue here that the two-parent middle-class working family is on the brink of financial disaster. The number of families declaring bankruptcy or receiving a foreclosure against their house has shot up dramatically. 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. The authors recommend a number of useful societal solutions to get families out of this trap, such as legally prohibiting credit card companies from charging grossly unfair interest rates and exposing banks that employ a loan-to-own strategy that steers minority customers to higher mortgage rates with an eye to future foreclosures. Warren and Tyagi point out that families buy homes they cannot afford in order to live in a neighborhood with better schools. Their proposed solution, however-to institute a public school voucher system with wider choice-is less carefully thought out. Overall, however, this is a needed examination of an emerging social problem. (Sept.) Forecast: The authors are hitting on issues felt by many Americans, and this book-with an author tour and 40-city radio satellite tour-is sure to be discussed. But its bleak warning may not drive readers to the bookstands. (c) Copyright PWxyz, LLC. All rights reserved


Choice Review

Mother-daughter authors Warren (Harvard Law School) and Tyagi present interesting and provocative findings about bankruptcy patterns in a readily accessible but authoritative and scholarly style. Their findings stem from the Consumer Bankruptcy Project of 2001, which interviewed families that filed for personal bankruptcy around the US. The authors argue that the rate of bankruptcy filings is rising, particularly for middle-class families, but not because of overconsumption, increased immorality, or reduced stigma, as other commentators have suggested. Rather, two-income families have driven up home prices in desirable suburbs, namely those with good public schools. Thus two-income families may actually have less discretionary income and less of a safety net of savings than one-income families had a generation ago. In addition, credit market deregulation has resulted in lower down payment requirements and greater access to unsecured but high-interest-rate credit. The resulting high-debt burden, combined with an unplanned but fairly likely event like serious illness, job loss, or divorce, leads perversely to greater financial vulnerability of two-income families than of one-income families. The authors advocate reregulation of credit markets and avoidance of high fixed expenses such as large house payments in response to this problem. ^BSumming Up: Recommended. General readers; students, lower-division undergraduate and up; and professionals. J. P. Jacobsen Wesleyan University


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