Elizabeth Warren: The Heart of the Two Income Trap
Most families saw and believed that if he's at work and bringing in a certain amount of money and we can add my salary on top of things, that's how it is; we can afford that house in the suburbs. That's how it is that we can keep health insurance for her family. That's how it is that we can have a state heart; that we can put those big bubble car seats. And indeed, there are books not just from the nineteen seventies but from the two thousand in which the comments and other social commentators say the family that has both mom and dad in the workforce is economically diversified. If he loses his job, she still has her job; if she loses her job, he still has his job.
To me, that is the heart of the two-income trap. When the budget shifted to take it now, it went from needing fifty-two paychecks a year in order to make the mortgage payments and health insurance payments to needing a hundred and four paychecks a year—his and her paychecks—in order to make the mortgage payments and health insurance payments. The family didn't get financially safer; the family got riskier.
So, as prices are shooting up, prices for homes in the suburbs, for example, what's happening is women, mothers, were increasingly going back to work to try to hit the target, to try to find a way to pay that mortgage. And what happened? The prices shot up. More went to work, the prices shot up again. More of them went to work, and they got caught in a trap that no one foresaw, least of all the families themselves.
You're quite right; we have to go to a break. Before we do, I look at the audience and listen, and I can see. The consumer price index, captivated, answers—it was one hundred as of seventy-nine, with only a hundred and one in nineteen sixty-eight. Just before the beginning of the Civil War, it was only about two hundred and forty-five in nineteen forty-five at the end of World War II. As the two thousand hit, it doesn't even include whatever place within that—it’s something like two thousand and ninety-nine. You know that tells a big story about why what happened to the two-income family did happen.