Pew reported May 29 that married women now earn more than their husbands in one-quarter of all households. This is an easy talker as a gender story, but the deeper truth about dual-income households is easy to miss. Take a brief moment to celebrate that which should never have been a question — we’re closer to equal pay for equal work — but now contemplate the deeper truth about how this is ripping our society apart.
It’s simple: Now that families trying to buy homes come armed with dual incomes, housing prices have risen accordingly. The ratio of annual earnings to median home price has soared from around 1:3 to 1:5 since dual-income households came to vogue, and that makes sense. There’s many more dollars chasing those goods, which sends prices soaring. While we were all arguing with each other about gender equality and paternity/maternity leave, banks made a killing.
Elizabeth Warren, consumer firebrand and now U.S. senator, stormed into public consciousness in 2003 when she published The Two-Income Trap. The book raises a series of counter-intuitive points, including the notion that people spend less on food, clothing, and even entertainment than they did a generation ago, despite all the complaints you’ll read about poor people wearing $100 sneakers. (There’s plenty of details in this post.) And her book was among the first to clearly link health care costs and bankruptcy.
But many analysts missed the point of the title. Owning a good house near a good school in a safe place now requires dual incomes in most places in America. That wasn’t true in the 1950s or even the 1960s. Even worse: Back then, if the sole income earner became unemployed, the other spouse could serve as safety net, picking up part-time work to plug the earnings gap. Today, that safety net is gone. Meanwhile, with two employed spouses, the odds that one will become unemployed during any give year double. Add it all up, and the American family unit is under pressure today like never before.
I’m not arguing that the 1950s were ideal. To make my economics point, I left gender out of that last paragraph, which is farcical. The old single income household was largely a male-income household, and that had to change. But in correcting that wrong, I sometimes worry that we’ve had a fast one pulled on us. Now it takes two incomes to live one decent life, and that just doesn’t work.
For more on the math, read this story.