The Fact
Elizabeth Warren and Amelia Warren Tyagi found that the median two-income family of the early 2000s earned about 75% more, adjusted for inflation, than a single-income family of the early 1970s — largely because mothers had entered the paid workforce. But after four fixed costs — the mortgage, health insurance, child care or education, and car payments — the two-income family had less money left over, in inflation-adjusted dollars, than the one-income family of the 1970s.
What This Means
The second paycheck did not buy a better life. It was swallowed by the cost of the basics. A family could bring in two paychecks and still end up with less room to breathe than a one-paycheck family a generation earlier.
Sources
- Warren, Elizabeth, and Amelia Warren Tyagi. The Two-Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke. New York: Basic Books, 2003.
- Potier, Beth. “Middle-class income doesn’t buy middle-class lifestyle.” Harvard Gazette, October 30, 2003. https://news.harvard.edu/gazette/story/2003/10/middle-class-income-doesnt-buy-middle-class-lifestyle