Huge numbers of
mothers entered the labor force over the last few
decades. And the inflation-adjusted price of food,
clothing, appliances, electronics etc. dropped sharply.
So how come we don`t feel like we`ve got a lot more
discretionary income than our single-income parents had?
wise and readable new public policy
book called The Two-Income Trap: Why Middle-Class
Mothers and Fathers Are Going Broke
provides a simple answer:
We don`t have
more discretionary income than our single-income parents
mother and daughter team of Harvard Law professor
Elizabeth Warren and former McKinsey consultant
Amelia Warren Tyagi explain:
"The average two-income family earns far more today than
did the single-breadwinner family of a generation ago.
And yet, once they have paid the mortgage, the car
payments, the taxes, the health insurance, and the
day-care bills, today`s dual-income families have
less discretionary—and less money to put away for a
rainy day—than the single-income family of a generation
The two authors note:
"The brunt of the price increases has fallen on families
with children. Data from the Federal Reserve show that
the median home value for the average childless
individual increased by 23 percent between 1983 and 1998
… (adjusted for inflation). For married couples with
children, however, housing prices shot up 79 percent—more
than three times faster."
For example, in August,
the median price of a single-family home in pleasant,
suburban Ventura County west of Los Angeles was
Many economists shrug
that this vast rise in prices increases Americans` net
worth. "But that net worth isn`t worth anything,"
the two women point out, "unless a family plans to
sell its home and live in a cave, because the next
house the family buys would carry a
similarly outrageous price tag."
Further, this housing
cost rise transfers hundreds of billions of dollars of
wealth from young families to aged empty-nesters—which
probably isn`t the most sensible way to run a society if
the welfare of the next generation is a high priority.
Warren and Tyagi made an
impressive survey of 2200 families that declared
bankruptcy. "Our study showed that married couples
with children are more than twice as likely to file for
bankruptcy as their childless counterparts," they
write. This will come as no surprise to married couples
with children. Even more striking: "This year more
people will declare themselves bankrupt than will suffer
a heart attack."
The biggest single cause
of this growing financial stress on middle-income
parents: the breakdown of much of the public education
system. As Warren and Tyagi note,
as millions of mothers marched into the workforce,
savings declined, and not, as we will show, because
families were frittering away their paychecks on toys
for themselves or their children. Instead, families were
swept up in a bidding war, competing furiously with one
another for their most important possession: a house in
a decent school district… "
Warren and Tyagi report:
"A study conducted in Fresno … found that, for
similar homes, school quality was the single most
important determinant of neighborhood prices …"
They go on to say:
“Bad schools impose indirect—but huge—costs on millions
of middle-class families. In their desperate rush to
save their children from failing schools, families are
literally spending themselves into bankruptcy."
But what causes "bad
Here the authors play it
coy. I can hardly blame them. Almost everybody uses
"bad schools" as a euphemism. Who wants to become a
pariah for telling the truth?
And for a book about the
economics and law of personal bankruptcy, The
Two-Income Trap is full of well-crafted zingers. I
came away just plain liking these two ladies and
their down-to-earth approach based on both formal data
and the realities of daily life.
Still, euphemisms get in
the way of solutions. So I`m going to rush in where W&T
fear to tread. I`m going to explain exactly what
Americans mean by the term "bad schools"—and the
one crucial thing that can done be to slow their
I`m a reductionist. I believe in simple explanations and
simple solutions. The more conceptual moving parts an
idea requires, the more likely it is to fail. This
insight has been the basis of Western science going back
to the English monk
William of Ockham in the 14th Century.
If you want to read a highbrow vindication of
reductionism, check out Edward O. Wilson`s
Consilience: The Unity of Knowledge. Or
just remember "KISS—Keep It Simple, Stupid."
What do homebuyers mean when they say "bad schools?”
Occasionally, they do have highly specific criticisms:
the principal might be disorganized, the teachers
unmotivated, the textbooks incomprehensible.
Overwhelmingly, though, Americans use the term "bad
schools" to mean—“bad
That`s the single most important key to the "two-income
trap." Parents spend huge amounts of money to keep
away from dim and dangerous fellow students.
Maybe Americans are wrong, on factual or moral grounds,
to do this. But it`s
how they behave.
What, then, should we do?
W&T propose a statewide voucher system. You won`t have
to live in an expensive municipality to send your kids
to school there. You could live in
South Central LA and send your kids to school in
The problem with this idea, of course, is that
Beverly Hills schools would no longer be Beverly Hills
schools if they were full of students from South Central.
legal right of suburbs like Beverly Hills to
protect their residents` children from bad, big city
students, parents who could afford it would just flee to
remote exurbs—to defend their children through sheer
No, the fundamental problem with America`s schools today
is the sheer number of
So let me propose one crass but extremely simple way to
at least lessen the harm done in the future:
importing bad students from the rest of the world.
America has all the bad students it needs right now.
Let`s use the total Hispanic student population as a
rough proxy for immigration to show how the government
is worsening the two-income trap. Hispanic 12th graders
3.8 grade levels behind whites in reading on the
2002 National Assessment of Educational Progress test.
(Blacks were about another grade back.) And that`s even
though the Hispanic figure is skewed upward by the
higher Latino dropout rate—12th graders
who aren`t in school don`t get tested.
The new SAT
results paint a very similar picture. Over the last
decade, white students` scores are up 26 points (that
would be about 0.12 standard deviations) to 1063.
Asians—who are, in effect, more carefully selected
immigrants—are up an impressive 41 points to 1083.
(These aren`t huge improvements, and most of the gains
are in Math rather than Verbal, but they`re better than
a sharp stick in the eye.)
Hispanics are improving too. The small Puerto Rican
group, which did
most of its immigrating to America one or two
generations ago, is up 26 to 909. But that`s still only
85% of the white average.
trend among the two recent immigrant Hispanic groups is
in the wrong direction. Mexican-Americans are down 5 to
905. "Other Hispanics" are down 2 to 921. (See page 11
of this 820k
PDF. All these scores, whether from 1993 or 2003,
use the easier scoring system introduced in 1995.)
The government is
importing uneducated foreigners into America—and
the middle class is driving itself to the brink of
bankruptcy to keep its children away from them.
To the tally for America`s post-1965
Immigration Disaster, we can add the
Bad School Squeeze—and the Great Middle Class
[Steve Sailer [email
him] is founder of the Human Biodiversity Institute and