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?

A 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 had.

The 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 ago."

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 $480,000.

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."

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,

"Even 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… "

But what causes "bad schools"?

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.