The Two-Income Trap
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The Two-Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke is a 2004 popular nonfiction book by Elizabeth Warren and her daughter Amelia Warren Tyagi. The book examines the causes of increasing rates of personal bankruptcy and economic insecurity in American households. It was reissued in 2016.[1]
Authors
At the time of publication, Elizabeth Warren was a professor of commercial law at Harvard University, specializing in bankruptcy law.[2] Her earlier writing was primarily aimed at academic audiences.[3][4] She was considered a leading figure in the then-active debate over personal bankruptcy law, in which she argued for generous access to bankruptcy protection.[4] She would later enter politics, campaigning successfully for the creation of the Consumer Financial Protection Bureau, before being elected US Senator from the state of Massachusetts.[4]
Amelia Warren Tyagi is a
Synopsis
Causal factors
The authors present quantitative data to demonstrate how
Among the expenses driving the two-income trap are child care, housing in areas with good schools, and college tuition. Warren and Tyagi conclude that having children is the "single best predictor" that a woman will go bankrupt.[7]
Warren and Tyagi call
Warren and Tyagi attempt to overturn the "overconsumption myth" that Americans' financial instabilities are the result of frivolous spending[4] – they note, for instance, that families are spending less on clothing, food (including meals out), and large appliances, when adjusted for inflation, than a generation prior.[8] They also note that dual-income households have less discretionary money than single-income households a generation prior.[6]
Proposals
The authors propose several solutions to the "two-income trap". In order to decouple educational opportunity from real estate location, they propose allowing families to choose among public schools in their district, with a voucher system.[6] They recommend tuition freezes for public universities, which have seen tuitions rise three times faster than inflation.[6] They endorse universal preschool as a means of reducing fixed costs for families with children.[6] Warren and Tyagi take care to consider possible perverse consequences of various social programs aimed at middle-class economic relief.[4]
Warren and Tyagi also call for the restoration of "
Critical response
In his review for The New York Times, economic policy consultant Jeff Madrick wrote that Warren and Tyagi "draw too fine a point here and there", but that ultimately "their main thesis is undeniable".[8]
In her review for the journal Educational Horizons, educator Audrey Ricker commented that the book "does a wonderful job of explaining why the American middle class is built on shifting sand", but criticized Warren and Tyagi for failing to explore opportunities afforded by a lower-income lifestyle, and for not including any interviews with families living in reduced economic circumstances.[2]
Journalist Matthew Yglesias revisited the book in early 2019, in light of Warren's candidacy for president in 2020. He praised The Two-Income Trap as "much realer and more interesting than any campaign book". Yglesias found the book to be an important source of insights to the evolution of Warren's policy positions, noting that the policy proposals in the fifteen-year-old book were of a smaller scale than Warren's current platform. In the context of the US in 2019, Yglesias found that the book presented "a striking mismatch between the scale of the problem it identifies and the relatively modest solutions it proposes". At the same time, however, Yglesias calls Warren "way ahead of the political curve" in her criticisms of banking industry practices.[4] Yglesias also noted Warren's emphasis on "normative" two-parent households and the societal value of raising children, which make The Two-Income Trap, in Yglesias' view, "a book social conservatives can love", but one with the potential to hurt Warren's appeal with some feminists.[4]
Matt Bruenig of the People's Policy Project, however, was much more critical. While he concedes that the book contains "valuable nuggets", he believes that its central premise is "based on what can only be described as a completely bogus and misleading analysis of income and consumption trends over time." Bruenig chalks up the apparent discrepancy behind the "two-income trap" to methodological mistakes on Warren's part, such as her making use of the wrong inflation index in her calculations. He argues Warren failed to account for category-specific inflation, with her instead applying overall inflation to each expenditure. He criticizes other oversights on her part, such as citing increased housing costs without considering the trend towards purchasing larger homes in recent decades. He also questions Warren's claim about homemakers acting as a secondary labor source, arguing it is insufficiently supported by evidence. Building on this, he argues that the concerns raised in the book can easily be solved by an expansion of the welfare state, and that conservative interest in the book is "constructing errors on top of errors".[9]
References
- ^ Walther, Matthew (January 4, 2019). "The forgotten reactionary Elizabeth Warren". The Week. Retrieved February 1, 2019.
- ^ JSTOR 42926496.
- ^ a b Lepore, Jill (April 21, 2014). "The Warren Brief: Reading Elizabeth Warren". The New Yorker. Retrieved January 31, 2019.
- ^ a b c d e f g h i j k Yglesias, Matthew (January 23, 2019). "Elizabeth Warren's book, The Two-Income Trap, explained". Vox. Retrieved January 31, 2019.
- ^ "Nonfiction Book Review: The Two-Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke". Publishers Weekly.
- ^ a b c d e f g h i Plumer, Bradford (November 8, 2004). "The Two-Income Trap". Mother Jones. Retrieved January 31, 2019.
- ISBN 978-0-465-09771-5.
- ^ a b Madrick, Jeff (September 4, 2003). "Economic Scene; Necessities, not luxuries, are driving Americans into debt, a new book says". The New York Times. Retrieved February 1, 2019.
- ^ Bruenig, Matt (May 6, 2019). "The Two-Income Trap Stuff Is Clearly Incorrect". People's Policy Project. Retrieved February 6, 2024.