My Parents Managed to Raise Two Kids on One Salary. That's Impossible Today -- What Happened?

[marmar]

from Koehler Publishing, via AlterNet:



My Parents Managed to Raise Two Kids on One Salary. That's Impossible Today -- What Happened?

By Jared Bernstein, Berrett-Koehler Publishing. Posted April 25, 2008.

It takes two parents to earn what one did only a few generations ago. Something's gone very wrong.




The following is an excerpt from Jared Bernstein's new book, "Crunch: Why Do I Feel So Squeezed?" (Berrett Koehler, 2008).


My dad had a full-time job, but my mom didn't, and they managed to raise, feed, house, and educate two kids on one salary. I can't do that today. Why not? What happened?
What happened was that the real earnings of lots of people, mostly male people, so husbands in this case, started to slip. At the same time, some of the very costs mentioned -- a home and a college education -- grew a lot faster than average inflation.

That's bad.

Also, over the last 30 years, the job market has opened up much more for women, who have made impressive gains that have helped to offset their husbands' wage stagnation.

That's good.

But it also means that family members are spending a lot more time in the job market. That's bad, or at least it's stressful.

There are three problems here and one positive development.

Problem 1: Men's earnings.

The hourly earnings of some men -- and not a trivially small group -- have done poorly over the last few decades. As shown above in the graph, the typical married man in his prime earning years, age 25 to 54, saw his real median wage fall a couple of percent from 1979 to 2006. His female counterpart made a lot more progress; her real hourly wage rose 30 percent, and she also worked a lot more hours. And if we cut the data a little further and look at husbands with at most a high school degree -- and only a minority of husbands were college educated over these years (16 percent in the mid-1970s; 30 percent today) -- we find a real wage loss of 8 percent over these 27 years.

But before you spouses out there start humming "Hit the road, Jack," recognize that it's not their fault. These men have been caught in the crossfire of a set of trends that have ripped the bottom out of their earnings capacity. The loss of unionized factory jobs has meant the slow bleed of high-productivity jobs in a sector where these guys had some bargaining power -- clout that enabled them to channel some of that growth into the household. .......(more)

The complete piece is at: http://www.alternet.org/workplace/83349/

[ayeshahaqqiqa]

1. Loss of union clout a key

to the erosion of salaries, I think.

[dkf]

2. Its hard to raise two kids on two salaries nowadays.

[Fresh_Start]

3. US insatiable appetite for cheap foreign goods

many of which used to be manufactured in the US (supporting those union jobs).

foreign cars, foreign electronics, foreign clothing, foreign food......
any surprise the jobs have gone overseas?

[Warpy]

4. Do we have an alternative?

You're blaming US when it's corporate management's lust for cheap labor to fatten their bottom line.

Now we have cheap, sleazy stuff that breaks down or wears out in record time because top management felt they were due mulitimillion dollar paychecks.

I think most of us out here in Consumerland realize that this is false economy, that we'd rather pay more for something that would work as advertised and last as long as it's supposed to, from clothing to refrigerators.

Try to buy anything that's still made in the US, or even in this hemisphere. Try to find anything that's still first quality instead of something that would have failed QC in any US factory.

Face it, we were robbed of our jobs and now were being robbed again by manufacturers shipping shoddy goods. We had nothing to say about it.

[Fresh_Start]

6. We had a choice in the past

and Americans voted for cheap over protecting US manufacturing. Since I was in manufacturing while that was occurring...I tried to buy American even when it was more expensive than Japanese goods.

People abandoned unions as a concept and abandoned buying 'the union label' goods.

[Warpy]

7. Actually, I did make that choice

and always bought classic stuff that would hold up instead of cheap crap at big box stores. I knew the difference between economy and false economy.

That choice has been removed by greedy corporate management.

[Fresh_Start]

8. greedy corporate management

associated with greedy thoughtless consumers.

I remember arguing with my friends about buying American...they couldn't care less. They didn't understand that their actions would lead to loss of US jobs.

We still go out of our way to buy America (or at least as American as we can). It gets more difficult all the time.

[Rydz777]

15. You summed it up nicely. Americans were sold the poisoned

chalice of "globalization." Now our manufacturing plants are overseas, our currency is debased, and we are up to our ears in debt.

Two incomes barely make it and if one of the earners is made "redundant," the family is in crisis.

[ogsbee]

16. Some things require a political choice not an individual one

It's just the way the world works, IMO. People will always choose cheap goods (and some have no choice) even if it actually hurts them in the long run. They say Walmart kills three jobs for every two it creates. If we all had good jobs we wouldn't mind paying more. The same goes for outsourcing jobs, businesses will always choose short-term profits even if it kills the golden goose (the American consumer). The government has to step in and make political decisions of what is and what is not in the common interest, leaving it up to the individual or individual business will not work. Right now, the governmental elite is bent on destroying the American way of life and reducing us to third world conditions.

[grilled onions]

5. Lots of Little Things too

WHile we see the big picture--loss of wages,health care costs rising while coverage shrinks,higher taxes/rent, etc but those were simpler times. Radio was free. TV was free(before cable was born. Some did not even have a telephone and if they did one was all they had. Internet was not around so that was another expense they didn't have. Many had only one car to feed. It was a simpler time when most ate at home which is cheaper then eating out or buying ready made food. Appliances were made better and when they did give you trouble handyman were easy to get to have them fixed.TV's were repaired many times. Today they get tossed. Clothes were made better. Shoes could last ten years. Plenty of shoe repairmen were busy in those days. Thrift was everywhere. Technically so much of what we have today falls apart so quickly and there is no way to repair most of it. Families have to have two vehicles(unless they are very lucky),cell phones for most are a given as is internet service. But today you can't say you will work until retirement age. So many push you out the door by the time you are forty. By the time you think you have job security your job is sent overseas. Todays workforce is very fragile. You can work three jobs and never catch up to the same wages your father made. There are so many things going against families today. It's depressing.

[applegrove]

9. Cost of housing went up because the norm became two income earners.

[Ellen Forradalom]

11. Add to this the effect of 'assortive mating'

--the tendency to mate/marry within one's social class--and multiply it by the widening earnings gap across social classes. A lawyer boss of mine once said, "In my day, a lawyer would marry a secretary. Now a lawyer marries another lawyer, or a banker," which is precisely what happened in his family. This, quite unintentionally, amplifies the wage gap between classes, which distorts markets, particularly for housing.

I believe economic issues are the heart of the so-called 'mommy wars'--the resentful attitudes expressed by stay-at-home mothers towards work-outside-the-home mothers. It isn't about the kids at all, it's about money. As with all social change, the entry of women into the professional workforce has had some unintended consequences. This is NOT to say that I advocate solving the widening wage gap on the backs of women.

[Liberal Gramma]

10. Complex issue

As one poster says, it was simpler times. Vacations were either camping or visiting relatives. Cooking and eating at home were the norm. Clothes were just clothes, not designer items. The family all shared one phone, sometimes shared it with other party-line families.
It's partly advertising that has fueled the consumer buying frenzy. And it's partly corporate greed that has eliminated jobs. But we have to take some of the blame ourselves. Money and possessions have become more important than family, friends, and faith to many of us. It's possible to change, but it's a choice that every family has to make for itself. We can't expect the government to change our values for us.

[RazBerryBeret]

12. my parents managed to raise

FOUR kids on one salary (my dad was a steelworker). My hubby and I are trying to raise TWO kids on TWO salaries, and it's hard!

[Joanne98]

13. Ronald Reagan happened.

[cap]

14. ahh....shit happened.

eom

[Doctor_J]

17. Reaganomics

War on unions, enormous deficits, war on social security, repeal of any sort of oversight, etc. It will take specific actions, similar to those implemented as part of the New Deal, to bring corporations under control again. Prison sentences, complete with the torture that they're so fond of, will probably be part of the rehab.

[electron_blue]

18. I want to point out that this idea of feeding a family 30-50 yrs ago with one salary was largely

true mainly for white families. Most families of color needed 2 incomes for the 20th century. I really hate this myth perpetuating that it was really all that much easier for *everyone* in the good ole days.

[MountainLaurel]

22. Thank you

Women in lower class families have always worked, whether it be cleaning churches and cooking at diners (like my great-grandmother), selling eggs and produce, taking in sewing and laundry, et al.

[shrike]

23. Immigrants, as well as people of color

I recently visited Hull House here in Chicago. One of the first thing Jane Addams did when she established her settlement house in that poor, immigrant neighborhood was open a child care center. All the mothers worked, and they had no place to leave their children.

[kskiska]

19. Sadly, it was women's lib.

When married women entered the workforce, everything changed and employers took advantage of it and somehow we ended up where we are. It's not fair and it's not the way it was supposed to be. As another poster said, it had "unintended consequences." Women who opted for careers instead of motherhood did well, but other women, who'd really rather be full-time mothers, are now expected to work. Children are in daycare instead of home with their mothers. Children's lives used to be very stable, playing outside in the yard, taking naps, eating regular home-cooked meals, and keeping regular bedtimes instead of being lugged around in strollers at the mall. When parents went out, children stayed at home with babysitters and kept to their routines. It's different now. Parents are exhausted and the kids are bearing the brunt of it.

I'm not anti-women's rights. Back in the 70s I joined NOW to fight for equal rights for women. As part of a divorce action, my ex shut down all my credit cards, even though I was working and they were in my name and I was responsible for payment. The dept. stores who'd issued me the cards then insisted I pay them off, even though an outside party was able to cancel my accounts, which were up to date. My ex ended up paying them. Then I had to re-establish credit.

[raccoon]

24. Strongly disagree. I don't think it was Women's lib that caused women to have to go to work.

Some women, sure, had the choice and preferred to work. But most of the time, it was because the family needed the money.

[Liberty Belle]

20. In CA housing cost have gone up much more.

My parents paid $18,000 for a modest tract house in a San Diego suburb in 1956.

Today the media cost of a home is $395,000 (and was $490,000 a year ago!)http://www.kpbs.org/news/local;id=11418
That's more than a 250% increase!

Another big ticket item, cars, also cost much more. My first car out of high school cost under a thousand bucks, only slightly used. You can't even buy a junker now for that. I'm shopping for a car for my teen and can't find anything decent for under five figures. Tuition and other college costs for my two college age kids is through the roof-up way more than the stats you cited. It's now $25,000 including room and board per year at UC - our pubilc unversity. In my day, any student willing to work part time could put themselves through school, but no more.

Wages in our area meanwhile have dropped sharply in recent years. Many industries have pulled out leaving mostly just minimum wage jobs in touristry. Good government jobs have been privatized and outsourced. 40% of working families in my area have no healthcare insurance.

In Southern California, there is very little mass transit so we are reliant on cars to go to work, school, etc. Gas prices are not approach four bucks a gallon! I remember when it was less than a dollar. Who can afford a family vacation now? Hotel prices have also soared. I remember when Motel 6 cost six bucks a night. Last I checked, it was $60 to $80 for our family. Nicer hotels run $100 to $200 a night or more in desirable areas.

Food prices are soaring because of rising fuel/transportation costs and also biofuel demand, which is causing farmers to grow crops for biofuel instead of food, forcing food suppliers to pay much more to assure availability of corn, rice, wheat, etc.

Employers in my folks' era gave good benefits. Dad got stock options and amassed high savings off his stock earnings while Mom stayed home and raised us kids. By contrast, my hubby and I haven't been able to save anything in recent years. For Dad, healthcare was free for our whole family. No deductibles, no copays, nada. Because I have a preexisting condition, we're now forced to pay $900 a month to keep my hubby's insurance after he changed jobs, and the deductibles are very high. Guess we'd better not get sick!

[Mimosa]

21. Everybody is 100% RIGHT.

This is one of those very rare topics where each poster brings up an aspect in which he or she is 100% correct.

[TaffyMoon]

25. Economics

in the 70's women decided they wanted careers, not housewifery. therefore the market was deluged with more persons chasing the same amount of jobs. this halfed the salary situation. in the end double the workforce meant halving the salary.

[MISSDem]

26. Personally, I don't think it is not possible. Back in those

days people didn't have a car for every member of the family, send kids to private schools. buy all of their food (they had gardens),they rarely ate out a expensive restaurants, they rarely went on vacations, the did not wear $100.00 jeans and other designer clothes, they didn't go to hair stylists, and on and on. People are greedy. And their children are spoiled and greedy. Am I a curmurdgeon (did I spell that right?).

[LisaM]

27. That's true. I remember saving my allowance to get a new record

Now I see kids routinely buying five or six CDs at a time - young kids, younger than 14. Kids have a lot of spending power. I see them at the mall buying all kinds of crap. We ate out maybe twice a month, we had ONE car, my sister and I shared clothes, etc. We got maybe three or four new outfits at the beginning of the school year, we got maybe three pairs of shoes, and wore our stuff from the year before and got a few more items of clothing for holidays or on our birthday or Christmas. We also didn't have more bedrooms than we had people, didn't have theme parties for our birthdays, and yes, we all shared a phone until high school when my mother got my sister and me our own phone (and phone line) for a Christmas present. We didn't take fancy vacations. We never camped, but we stayed at friends' cottages and the like.