Nowadays, Elizabeth Warren mostly gets talked about as a potential progressive alternative to Hillary Clinton's inevitable Democratic coronation. But it's often ill-remembered that for most her life, she was an academic. One of her most fascinating works is her book The Two Income Trap.
A lot of people have probably heard of the phenomenon of the two-income trap, but it's not discussed enough. This is the basic idea: financially, having both parents in a family seems like a no-brainer — it brings in more money. But it can actually become a trap if the costs involved in having both parents work become equal to the extra income that the second spouse brings in. For example, in most American settings, if both parents work, the family needs a second car, with all the expense and headache associated. The parents need to pay for child care. And so on.
And if the expenses associated with those two incomes become fixed expenses (for example, you got into debt to buy that second car, and/or to buy a house with a two-car garage), it turns into a trap: once the family realizes the mess they're in, they can't backtrack.
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Two incomes can also be a trap because they make the family more fragile. In Ye Olden Days of the 1950s, when there was typically one breadwinner, typically the husband, if he lost his job, the wife could temporarily get a job until he bounced back, thereby softening the blow. Today, if both spouses are working full-time, and, like so many American families, are already in debt, one of them losing their job becomes a devastating blow. Another example is if a family member needs care: if the wife doesn't have a job, she can take care of the family member; if she does, then the member typically has to be institutionalized in some form, which is expensive, and only further tightens the noose of the two-income trap.
As in so many things in America, this is tied into housing, which itself is tied into schooling. The two income trap, in Warren's telling, arises out of the perceived need to be in a good school district. Because everyone is competing for a spot in the neighborhood, the home values in places with good school districts skyrocket; the parents then get into debt to buy the right house; both parents then have no choice but to work to pay off the debt.
And the two-income trap becomes self-fulfilling: If the child's mother is in the home, she can monitor and counterbalance potential bad influences at school. If the child has to spend all his time in school and pre-school and post-school activities and the parents can only oversee the activities from a distance, then it becomes vitally important that those environments be free of bad influences. This makes it vitally important to buy the right house, tightening the noose.
To some extent, The Two Income Trap is only a partial analysis: the phenomenon is much harder on the upper-middle-class than the broad expanse of American families. But, still, it highlights many of the defining features of American life today: the nagging feeling of having to run harder to stay in the same place; fears related to education, social mobility, and the maintenance of "middle class" status.
What to do to break this trap?
The first obvious answer, it seems to me, is to burn the schools. We hear a lot of rhetoric against "school choice" and "markets" in education. But the simple fact of the matter is that there is already "school choice" and "markets" in K-12 education in America; the only difference is that the "choice" occurs through the real estate market, via the public school catchment system. Better-off parents can exercise school choice by buying houses in the right district. There is "school choice" — for the rich.
This entire awful system has to go, and it remains one of the deep mysteries of American politics why the left, the supposed advocate of the Little Guy, is the most vehement force standing against change in this area, and agitating for the maintenance of the intergenerational transmission of privilege.
Every family in America should have a K-12 spending account, allowing them to spend the money on school, and on para-school activities. A mere "voucher" would not incentivize schools to cut costs, and in the era of Khan Academy, it makes little sense to mandate that K-12 education happen in "schools" as we currently conceive of them. What counts as "para-school activities" should be regulated at the state and local level to allow for as much experimentation as possible. The accounts of children with disabilities and/or low socio-economic status should be topped up, so that education startups will compete for them. Extended families as well as non-profits should be able to contribute to K-12 spending accounts (we can imagine everything from churches where the better-off families direct their tithes to the education of the less well-off members of the church, to online crowd-funding campaigns allowing a 12-year-old girl-genius to go study at MIT for a semester). This would kneecap the entire sorry system.
The second obvious answer has to do with taxes. Since it is politically impossible to get rid of the mortgage interest tax break, it should at least be capped, to curb some of the worst incentives towards "McMansionitis." Instead, middle class families should receive an expanded child-tax credit. This is the option that allows for the most choice. An expanded child tax credit would allow some families to have both parents work full time and use the money for child care, and other families to have one parent downscale their work commitments and spend more time with the kids.
Finally, we should have a broad cultural movement that recognizes that Corporate America has been failing at its citizenship duties by pretending that we are all interchangeable cogs in the great post-industrial capitalist machine. Human resources departments should recognize that some people want to devote themselves fully to their career, and other people want to focus less on their career and more on other pursuits (family or not). This is a blind spot of our maddeningly-polarized politics: the right doesn't want to criticize large corporations, and the left doesn't want to admit that some parents genuinely do prefer spending more time with their kids rather than slaving at the top-management fast-track.
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