Family income - 2 vs 1
August 21, 2006 1:05 PM   Subscribe

In the U.S., why does a family need two incomes to live at a standard that was previously attainable by one?

In the united states, prior to 1960 (approx), it seems as though families were able get by well with one income. By "well " I mean that a middle class family could have a couple of kids, a car and a house, with only the father having to work. Obviously, that is not the case anymore. Why is that?
posted by horsemuth to Work & Money (104 answers total) 30 users marked this as a favorite
Because the great money trick is sucking all the wealth up to the top? That, and the vastly increased cost of living. Shoes for your children didn't use to cost $100 a pop, and the home didn't need a $1000 computer.
posted by bonaldi at 1:06 PM on August 21, 2006

It's perfectly possible to live at the old standard of living on one income. It's just that our standards have gotten impossibly high. One can still buy shoes for well under $100, and no home needs a $1000 computer. I grew up in a 1000-square-foot home, with two crappy-assed cars, one TV, and hand-me-down clothes. That's how we lived on one income, and how you can live on one income today. I choose to pursue a higher standard today, but that's my choice.
posted by MrMoonPie at 1:10 PM on August 21, 2006

(Warning: the following is an oversimplification of economic theory, made by a Theatre Arts major :-)

It takes an average income to have the average standard of living. If one side of that equation changes, the other goes with it. Increased income in most households doesn't mean that more people are above average.
posted by winston at 1:12 PM on August 21, 2006

Here is a book on the topic ("The Two-Income Trap"). I haven't read it so I can't vouch for its conclusions but this interview with one of the authors is interesting.
posted by (alice) at 1:13 PM on August 21, 2006

Actually, the whole one income thing is largely a myth. Middle class women have always contributed to the household econonomy in significant numbers. Even in the '50s when we have this idea of the June Cleaver housewife, %40 of American women contributed an income.

But I think what you are asking is about inflation and lower salaries per worker-hour. I cannot really answer that, but think, instinctively, that it must be a result of the global capitalist conspiracy.
posted by jmgorman at 1:13 PM on August 21, 2006

MrMoonPie has an excellent point. Credit cards weren't rampant before 1960 and thus people didn't live beyond their means. If you didn't have the cash for those $100 shoes, you didn't buy them. Personal debt has fuelled the need for the dual income scenario.
posted by meerkatty at 1:14 PM on August 21, 2006

The real question is why not? Why would anyone pay you more than they have to? I mean, what are you going to do about it?

I'm not saying it's right or deserved, I'm saying it's because the power balance has shifted due to years and years of organized employers and disorganized workers.
posted by crabintheocean at 1:14 PM on August 21, 2006

er... economy.
posted by jmgorman at 1:14 PM on August 21, 2006

bonaldi, who pays $1000 for a computer? You can get a new Dell desktop for $300.
posted by k8t at 1:15 PM on August 21, 2006

And there are lots and lots of four-income households now, where two parents each work two jobs. The point about middle-class women having always worked to some degree is good, but aside from that I don't think it's a myth at all.
posted by crabintheocean at 1:16 PM on August 21, 2006

bonaldi, who pays $1000 for a computer? You can get a new Dell desktop for $300.

Who pays $45,000 for a car? You can buy a new Kia for $15K.
posted by solid-one-love at 1:17 PM on August 21, 2006

Personal debt has fueled the need for the dual income scenario.

I don't agree. I think they are two symptoms of the same problem. Most people in serious debt got there during unemployment, family problems, or illness, not buying flashy clothes because they were suckered by our "consumer culture" when they could have gone to the thrift store
posted by crabintheocean at 1:20 PM on August 21, 2006

Who pays $45,000 for a car? You can buy a new Kia for $15K.

That rhetorical question isn't likely to seem too rhetorical to someone who snarkily wonders why anyone would buy a $1000 computer.

A better question: Who pays $5 for access to Metafilter? You could have been here 6 years ago.

Signed, paid $3000 for one computer, $1800 for the other, $16k for the car, and $0 for Metafilter.
posted by jammer at 1:22 PM on August 21, 2006

There is, I think, obviously something skewed with the US economy when so many families have two people working full-time and are still having a hard time keeping their heads above water.

But I think it also complicates things when you talk about only one parent "needing" to work. A lot of women want to work, or at least grew up expecting to work full-time jobs. And so the "free" work they would have done in the home now needs to be accounted for, and so families are paying more for outside childcare, cleaning, cooking/restaurants, etc.
posted by occhiblu at 1:26 PM on August 21, 2006

In a large portion of the country(anywhere housing prices haven't gone crazy), it's still quite possible to live a decent life on one salary.

You'll be vacationing at HoJos rather than a Caribbean Spa, you'll have to mow your own lawn rather than have a service, and eating out will be a treat, not a regular occurrence, but it's quite doable.
posted by madajb at 1:26 PM on August 21, 2006

Actually, I don't think that people are living at the same standard they used to.

Kids in the fifties didn't have iPods or their own cars. People eat out much, much more than they used to. Gym memberships, cable television, lawncare service... chances are that your parents didn't have these expenses even though now many people don't even consider them luxuries.

This weekend, the cover story on the New York Times Sunday Magazine mentioned that people in the forties-- lots of people-- weren't even getting enough food:
"During World War II, potential enlistees were regularly turned away because they were undernourished, and after the war the director of the Selective Service System declared malnutrition to be a national emergency."
posted by chickletworks at 1:27 PM on August 21, 2006

" Most people in serious debt got there during unemployment, family problems, or illness, not buying flashy clothes because they were suckered by our "consumer culture""

I can't emphasize enough how much I disagree with that statement.
posted by dendrite at 1:28 PM on August 21, 2006

Most people in serious debt got there during unemployment, family problems, or illness, not buying flashy clothes because they were suckered by our "consumer culture" when they could have gone to the thrift store.

Good point, but having known several people who have filed for bankruptcy for the latter reason, I'd say it works both ways.
posted by meerkatty at 1:29 PM on August 21, 2006

Addition thoughts

How much have multiple income families bid up the cost of housing? Any figures out there one what percentage of income was needed to keep a roof over your head by either renting or purchase "back then" and now? Homes today are more likely to house only 2 generations while back "then" a house could house up to 4.
posted by Raybun at 1:29 PM on August 21, 2006

Most people in serious debt got there during unemployment, family problems, or illness, not buying flashy clothes because they were suckered by our "consumer culture" when they could have gone to the thrift store

You Are Wrong. A small percentage of those in financial crisis got there only because of medical/life disasters. A larger number got there because of over-extending themselves and -then- having some life trauma which kicked the already rickety platform out from under them. However unexpected expenses and life traumas are the rule, not the exception, and living constantly on the razor's edge as if they will never happen is no less reckless than getting into financial disaster without an unexpected tragedy.

There's a lot of blame to go around for people living beyond their means in our culture. However making completely false claims about how "most" people got themselves into trouble does nothing to address the real problems.
posted by phearlez at 1:31 PM on August 21, 2006

Because you just bought a plasma tv for $2000. And the last oil change on your wife's BMW just cost $835.
posted by The Jesse Helms at 1:31 PM on August 21, 2006

I think madajb is onto something there. It's easy to live in an area where housing has gotten ridiculously expensive and assume that's how it is everywhere. However, this isn't really the case.
posted by knave at 1:32 PM on August 21, 2006

There are some additional things we pay for here, in "the future"

cell phones
internet access
cable/dish tv
health care, ridiculously higher than it ever was
retirement funding almost 100% on us
posted by poppo at 1:32 PM on August 21, 2006

Living standards have changed a lot. My grandfather was proud to be able ot put shoes on his children's feet, and raised 4 children in a 1000 square foot house. He wasn't considered poor either. We have considerably different expectaions about what the "good life" is today. I've been supporting my family on about $40,000 in the hinterlands of the Bay area for the past three years, but I had to give up a lot of the toys and luxuries that my friends enjoy. I've been living like my grandparents did.
posted by lekvar at 1:34 PM on August 21, 2006

Housing prices are competitive and rise to match average incomes. If all the other families looking for a house in an area are dual-income, then prices are going to reflect what a dual-income family can afford, and the single-income families don't stand a chance of being able to afford anything.

So it is possible for everyone to do more work to afford the exact same houses. Isn't capitalism beautiful?
posted by cillit bang at 1:34 PM on August 21, 2006

Check out a chart of the labor force participation rate for women, and I think you'll see it has in fact changed dramatically since 1960.

A few things come to mind. It's probably some combination of all these and more:

Monetary policy mistakes that led to massive inflation in the past few decades.

The decline and fall of labor unions and the social and economic factors that made them functional.

Increased globalization, which may arguably be increasingly to the benefit of countries ready to exploit it at the expense of the USA.

Increased expectations for standard of living, as reported above.

Increased willingness to spend money relative to income, for various reasons.

The slow inevitable effects of American current account deficits past starting to have their slow inevitable macroeconomic effects.

The natural tendency of the system to pay people as little as they're willing to accept, which is less now that more women are working than it would otherwise be.

One thing is clear anyway, there's no simple answer.
posted by sfenders at 1:36 PM on August 21, 2006

In a class I took in college, we read stats from the 80s showing that the average American was earning more, but due to working longer hours rather than to getting raises that matched up with inflation. I can't remember the source of this particular chart, but it showed that if you wanted a "normal" life, that is, to work about 40 hours a week, you needed a dual income.

And I second jmgorman's comment about the single-income lifestyle being a myth. The 1950s image of a stay-at-home mom was a response to post-WWII fears that men wouldn't be able to get jobs because the women had taken them.

Prior to WWII, most women who weren't in upper-middle class families brought money home in some way. This again is according to college reading that has deposited itself in my head without a good source. Sorry 'bout that.
posted by brina at 1:38 PM on August 21, 2006

a small percentage of those in financial crisis got there only because of medical/life disasters. A larger number got there because of over-extending themselves

You seem to have some hard knowledge of the numbers involved here. Care to share some longitudinal SES data analysis that backs up your assertion?
posted by meehawl at 1:42 PM on August 21, 2006

Elizabeth Warren, the first female head of Harvard Law, and her daughter (an MBA named Amelia Warren Tyagi) wrote The Two-Income Trap. I read it about a year ago. You can read reviews and articles at the HLS site.

I am going back a year here, but my recollection is that Warren showed that the middle class is not living more extravagantly than before. The cost of consumer electronics has dropped. (Case in point: I recently saw an All in the Family episode where their new early 70s colour TV costs $500. That's more than a plasma TV when you adjust for inflation.) Cars cost about the same and are more fuel efficient. They show that families now spend 22% less on food, 21% less on clothing and 44% less on appliances. Families earn 75% more than they did 30 years ago but they have half the disposable income of 1970s families.

Warren and Tyagi argue that the problem is that people started using the second income to upgrade their housing. People started going crazy with spending in an effort to buy into the best school districts. They say a lack of good public education is the reason that housing has become so expensive.

I think they also said something about medical costs, but I might be confusing the book with something else.

The book recommends that people try to pay all their fixed expenses (mortgage, car, preschool/daycare, health insurance) from a single salary. That way, if one parent loses their job, the family can just cut back on treats and retirement savings.

That's the route my husband and I took.
posted by acoutu at 1:43 PM on August 21, 2006 [4 favorites]

I'll throw in some anecdotal stuff from my own childhood, which bolster some of the arguments made here:
- Homes were smaller, way smaller, three bedrooms, one bath was sorta typical. The only kids I knew with their own bedroom were either rich or only children.
- Clothing, shoes especially, was more expensive but it was also better made. We got our shoes repaired, and they were worth repairing; ditto for other articles of clothes
- Very few people had two cars, the only folks I knew who bought new were what I called "rich" - upper middle class at least.
- Most families had one phone and one phone line. If you were poorer, you had a "party line" that you shared with others (you waited for your special ring before answering)
So I cringe when I hear people say that they just bought a house for 500K because they "needed" a bigger house for the kids (2 children) - meaning 5 bedrooms, 3 full baths, etc...
posted by dbmcd at 1:56 PM on August 21, 2006

Two-income families have additional expenses too. Like daycare. That's not cheap.
posted by smackfu at 2:09 PM on August 21, 2006

Wow, "completely false claims" huh? It looks like the difference between what I said and what you said is a matter of politics; What you describe as "over-extending themselves and -then- having some life trauma" is probably what I'd describe as "Making low wages and getting raises that don't keep up with inflation while living costs rise, and -then- getting seriously ill without having health insurance."

Moralizing about how poor people have no one to blame for themselves does worse than nothing to address the real problems.
posted by crabintheocean at 2:09 PM on August 21, 2006

According to the author's of The Two-Income Trap:

"Yeah, there's this great myth that back in the some murky past, people paid their bills no matter what. Why? Because they had more honor! Whereas today, people say, our morals are willy-nilly and we run to the bankruptcy court at the first sign of trouble. But when we look into real data on the real people going bankrupt, there's no evidence for this myth. The fact is, out of all the possible reasons for going bankrupt, only three account for nearly 90 percent of bankruptcy: a job loss, a medical problem, or a divorce. And the fact is that those are exactly the kind of calamities that the bankruptcy courts were designed to help people through. The courts are supposed to be there for somebody who has lost their job and can't pay their bills. Most people simply aren't gaming the system in any way."
posted by mintchip at 2:16 PM on August 21, 2006

I should add that the addition of a second income may not really add 100% of the second income. It costs money to go to work: daycare, transportation, networking lunches, clothing, grooming, etc. Somebody earning $300 a month from home can be the economic equivalent of $85k a year.
posted by acoutu at 2:18 PM on August 21, 2006 [1 favorite]

Even if you consider that the 50's wife was a stay-at-home stepford wife with no income, she still:

* Cooked real food, not nuked some frozen stuff (check the price differences between fresh raw food and frozen meals)
* Took care of their kids, checked their homework, disciplined them, taught them morals and ethics... things that today they pay an expensive school to do because they don't have time.
* Didn't spend the "cost of working" (car, commute, lunch, extra fun needs, confraternization with coworkers, work clothing)
* Checked their kid's health, nutrition, and hygiene regularly instead of having to drive them to a doctor and give them medicine when they finally realize they're in a poor shape.

If you consider the low wages for women in the 50's (before feminism), I think these savings offset the difference to "working moms" at that time. Now you are facing a difference of 1.5 wage vs. 2 wage (supposing wages are equal nowadays), which you can use the other comments on the thread to neutralize.
posted by qvantamon at 2:19 PM on August 21, 2006 [3 favorites]

Cars cost about the same and are more fuel efficient.

Per gallon, not per dollar. Remember we are talking before oil crisis, when you could fill your tank with the change in your pocket.
posted by qvantamon at 2:22 PM on August 21, 2006

Unexpected crises put people into debt. So does overuse of credit. Both are problems, and to argue that whichever one you hate is worse is silly. It doesn't help anyone. People should avoid overextending themselves for conspicuous consumption. They should do what they can to save for emergencies.

Politics aside, the wide variety of responses is indicative of the fact that there is no easy answer to your question. In general, though, I'd say the main reason families need two incomes more than they used to is because people think they need more Stuff to make them happy. The more Stuff you have, the more it costs to acquire and to maintain.

When I was growing up in the seventies and eighties, most of the families I knew were one-income households. (Of course, I was raised in a poor family, so perhaps that skews things.) Families generally had one car. Many people held on to that car until it died. The houses they lived in were, by today's standards, small and plain. They grew their own food. They had a TV and a stereo, but that was it. They didn't take expensive vacations. They didn't put children in daycare or send them to private schools. They repaired things that broke instead of buying them new. Women knew how to sew. Men knew how to do carpentry and/or mechanical work. A night at the movies was a rare treat.

Compare that to the families I know today. They live in large, luxurious houses. They have two cars, and many people get new vehicles when they're bored with the old one. Few people grow their own food. Nobody knows how to sew or to build things with their own hands. When something breaks, it's replaced with something new. They don't have stereos, but they have bigger TVs. They also have VCRs and DVD players and computers (sometimes two or three computers) and cell phones and fancy kitchen appliances. Parents pass out new studio photos of their children several times a year. They enroll the kids in swimming, in music lessons, in gymnastics, in soccer, in ballet — all this before the age of six. This stuff costs money.

I guess what I'm trying to say is that which has been said before: if you want to live like people did in the sixties, you can. And probably on less than one income. But most people, including myself, subscribe at least in part to the material culture into which we're born.

What I've said may not be true for the truly poor, but it's true for 90% of the U.S.
posted by jdroth at 2:27 PM on August 21, 2006

The first female head of HLS is Elena Kagan, not Elizabeth Warren.

You need to consider that wages have changed; previously, some men earned a "family wage" and women earned less for the same job (even moreso than may be the case today). It might be harder for a one-earner family to be supported by Dad today, but it's probably easier for it to be supported by Mom.
posted by amber_dale at 2:30 PM on August 21, 2006

I think the notion of a comfy middle class where the man was the sole breadwinner is largely a myth.

The cliche was "No wife of mine is going to work!" Implying that having a wife at home to maintain the house and kids was a sign of status and pride for the single male breadwinner.

Personal deficit spending (credit cards, home equity, etc) has greatly increased the buying power of very nearly all Americans and has vastly increased the number of little things we can buy. ($100 shoes, iPods, etc.) (Many economist-types argue that this is very, very bad thing, btw. Ways and means, that type of thing.)

The new cliche - or rather lifestyle choice - is "My wife is going to work and make a good salary so we can surround ourselves with all the shiny new things the TV tells us we should have in order to demonstrate to our peers how successful and normal we are."

There's so much more to this - the immigrant labor that builds the $500k monster house... the sweatshops which produce the $100 Nikes... the media, Hollywood, Internet, etc which convinces us that we all need new, expensive stuff every day in order to be complete people...

Great question, btw.
posted by wfrgms at 2:33 PM on August 21, 2006 [1 favorite]

p.s. I've mentioned the families I know who have two incomes. I actually know several who get by on one income. Some of these have two cars, but most have one. The mothers do a lot of work in these households, particularly in regards to cooking and to childrearing. These families are frugal, just as their counterparts in the sixties were. They save money because they have to. Many of these folks grow their own food. Few have cable. Most have a computer, but nearly everyone has the cheapest possible internet connection. These families don't have all the stuff that the two-income families do, and they don't do the same things. Curiously, nearly all of the one-income families are happier than the two incomes families I know. This is probably just an anomaly, but it's true.
posted by jdroth at 2:34 PM on August 21, 2006

I would think twice before putting computers down as a new expense that's necessitated by modern times. When you plunk down for a computer, you are getting a lot of things that used to be expensive, separate items in the past: an electric typewriter, a color TV, a set of encyclopedias + a free trip to the library every night, a source for literature, a personal post office / telephone (VOIP), and an intelligence source for many other money saving tips like you'd find on Lifehacker.

Sure computers and the cost of a monthly ISP bill cost money, but the value it resturns is an order of magnitude more than anything else we had access to in the past.

As for the cost of living going up I'd say it's partially due to large corporations becoming more efficient at bullying people out of fair wages. Walmart may create a lot of jobs, but they sure don't pay your bills, and there's no security whatsoever. And forget about them footing retirement, that's their best hunting ground for cheap employees!
posted by Operation Afterglow at 2:35 PM on August 21, 2006

Mea culpa.
posted by acoutu at 2:35 PM on August 21, 2006

There's so much more to this - the immigrant labor that builds the $500k monster house... the sweatshops which produce the $100 Nikes... the media, Hollywood, Internet, etc which convinces us that we all need new, expensive stuff every day in order to be complete people...

Absolutely — excellent point. This is a complex question. There's no easy answer. It involves the whole of our society, really.
posted by jdroth at 2:38 PM on August 21, 2006

But jdroth (and others): Y'all are presenting these things as if they're the fault of the spenders, or based solely on their insecurities. If a woman wants to pursue a career, then things like day care and two cars and at least some amount of paying people to sew and clean become necessary. If public schools get bad, then putting your kids in private school or spending extra money for them to get other intellectual stimulation is not unreasonable.

Yes, of course, there's some degree of conspicuous consumption going on. But not all of it is caused by keeping up with the Joneses, and I would suspect that very few of the large expenditures are. (With the notable exception of housing, but again, that can be tied into paying more to be in decent school districts, or near decent private schools.)
posted by occhiblu at 2:39 PM on August 21, 2006

"In the U.S., why does a family need two incomes..."

I think it's a matter of confusing the terms 'need' versus 'want'.

- do you really NEED 2 (or 3 or 4 sometimes) cars per household?
- do you really NEED a 4,000 square foot home with separate bedroom and bathroom for every single member of the household?
- do you really NEED that 50" HDTV?
- do you absolutely NEED to spend $150/month on digital cable / XM radio and internet access?
- do you honestly NEED the latest electronic widgets?
- do your kids absolutely NEED a brand-new cell phone / ipod / game box every six months, just to keep up with their peers in the rat race?
- do you NEED that Platinum card with the $20,000 limit?
- is someone holding a gun to your head and forcing you to spend $13-$20 bucks per person for restaurant meals*N days/week?

Media and society hold up a damn lot of 'stuff' as the Holy Grail of consumer bliss. Only an individual can truly decide whether or not the Rat Race is a path they choose to pursue. and not to make an editorial derail, but man did my sense of self-worth improve when I simply stopped watching television.

yes, it's uncool and socially backward and I'm an unrepentant hippie who'd rather spend time on skis or riding a bike than keeping up with the Joneses. and as a parent, only you can decide if you can handle listening to your kids whine about 'but so-and-so's parents let HIM/HER have one....'

so, um... well I don't have kids. Nor will I. but then I live quite comfortably (with a roommate, yes, but he's awesome) on eleven bucks an hour, in a pretty expensive community. It can be done. It's just not... trendy.
posted by lonefrontranger at 2:43 PM on August 21, 2006

You have a good point, Occiblu. There are some large expenses now that didn't used to be there, especially for certain life choices (which I do not condemn). However, I think you and I just disagree on the level of consumption occurring in this society. I believe it's rampant, and the cause of most of the financial trouble people face. (Not the catastrophic financial trouble, but the chronic bleeding of money that many people experience.)
posted by jdroth at 2:44 PM on August 21, 2006

And has anyone mentioned college costs? Harvard cost something like $1,000 a year when my father went. Now college degrees are considered almost mandatory, and are a hell of a lot more expensive than that, even for public schools.
posted by occhiblu at 2:44 PM on August 21, 2006

You never saw Wally and Beaver playing with anything more expensive than a baseball. And look where they lived: a small house within walking distance of stuff.

Now people think they need two incomes because of a sort of arms race with their neighbors. You will never feel satisfied until you have all the crap your neighbor has, plus a little more. But that's what your neighbor thinks. So they get more, you get more, they get more... you start to think it's normal to have more than one television, more than one computer, a drawer full of very expensive gadgets you don't even use anymore, etc.

If you are willing to stop competing with your neighbors and to go back to sane living -- one family car (or none if you live in the city), no cars for the kids until they're ready for college and they buy it, a smallish home with no extra rooms, few gadgets (one TV, one phone, one simple computer, etc.), no rich-folk vacations (take in-state driving or bus vacations, not international flying vacations), and no credit card bills that you can't pay off this month -- you might be able to cut back to one earner.

It starts by giving up the claim that both of you have to work. Admit that it's false, decide that one of you will not work starting a certain date (if it's soon, give notice at work), and then live like you believe it. However, it might mean moving -- a lot of people buy oversized houses in the most outlandish places, way the hell out from civilization, decidedly sub-urban, less than urban, and then depend on multiple cars, huge commutes, etc., to get anything done. Live in a small home near public transport and buy as little as possible.
posted by pracowity at 2:47 PM on August 21, 2006

I think this entire question is based on the assumption that everyone was living a middle-class life in the fifties, which is untrue by far. But the inflated standards point also applies. Consider the bills you have today that you didn't have in the 1950s:

1) cable television
2) DSL / cable internet
3) cell phone bill AND land line
4) monthly TiVo service
5) higher energy bill to power all your nifty gadgets
6) gym membership
7) identity theft protection for your credit card
8) insurance on more than one car
9) monthly gardener and/or housekeeper

None of the above is considered all that extravagant nowadays. Even to have a cleaning lady pop by every so often, you don't have to be Daddy Warbucks.

Or, at least, we live as if you don't have to be...

But the biggest rocks, I think, are not the cable and DSL bills but the debt service on crazy-ass mortgages people are willing and allowed to take on.
posted by scarabic at 2:49 PM on August 21, 2006

Most people in serious debt got there during unemployment, family problems, or illness, not buying flashy clothes because they were suckered by our "consumer culture"

Most people in serious debt WILL TELL YOU they got there during unemployment, family problems, or illness. And that can be part of it. But people tend to look at their lives and instead of going "OK, I'm gonna have some medical bills, need to spend less" or "OK, I'm getting divorced, need to spend less" they'll think "Hey! I'm going in debt anyway, why not buy more worthless crap!"

As for the original question: I think you could live at a 1950s level today, you just wouldn't WANT to. I mean, look how many bills you have now for things which didn't even exist: cable television, high speed internet, cell phones. Likewise, there were no DVDs to buy. There were no video games. Just paperbacks and comics and movies at the theatre.

Also, most families did not have two cars. They didn't eat out in restaraunts all the time. They didn't have child care bills.
posted by dagnyscott at 2:50 PM on August 21, 2006

jdroth, I would admit that I might be underestimating that.

But it does bother me that the question seems to be framed as "Why do women need to work" and so many posters seem to be implying that moral, non-greedy, happy families require that a mother stay at home to cook, clean, sew, and raise the kids. For families that want to do that, that's great; and if the men posting here suggesting such a thing would be willing to give up their own jobs and rely solely on their wives' earnings, then I'll admit the undertone I'm sensing is due to my own issues; but right now I'm finding the assumptions that women who work outside the home do so because they want to buy their greedy kids iPods to be a little disturbing.
posted by occhiblu at 2:51 PM on August 21, 2006 [1 favorite]

occhiblu does make a good point, that some hetero families are 2-income families because the woman WANTS to work.

Perhaps another possible answer to this question is that woman now work because they can and want to, while men continue working because they've never officially been relieved of their "provider" burden.

Lifestyle expands to consume all available cash.... and there you have it.
posted by scarabic at 2:52 PM on August 21, 2006

Because per-person wages (adjusted for inflation) have essentially remained flat since the 70s, while the cost of a house, college, and health care have skyrocketed. Just between 1997 and 2003, the number of America's working families spending more than half their income on housing grew 76% to one out of every eight families.

Cell phone plans, cable, and sneakers? I doubt it.
posted by beatrice at 2:59 PM on August 21, 2006 [6 favorites]

"Lifestyle expands to consume all available cash.... and there you have it."

oooo, SO not true. there is such a thing called financial self-conotrol.

its just that very few people in this day and age have the will or the knowhow to exercise it. I haven't seen a ton of trendy, high-impact pop culture focussed towards saving for the ol' 401(k) or the kids' futures. nah, that stuff always tends to be the snore-inducing commercials during golf matches, featuring semi-mummified Hollywood greats of yesteryear, it does.

occhiblu, I've read a bunch of your comments... and how to say this politely? err, you do know it's not always about women's issues, right?

To address the point occhiblu brought up, I don't think anyone intended to imply it was the wife who had to stay home. 2 very good friends of mine live in single income households where the husband is the one who stays home with the kids (one's a writer, one is a software coder who telecommutes) because the wife was the one who either wanted or had to have an office job.
posted by lonefrontranger at 3:03 PM on August 21, 2006

Yeah, we're a hetero two-income family. I'm a woman. I WANT to work. And I like it. My husband WANTs to work. And he likes it.

One side effect of this: even though we each take home less money than just about any of our other college-educated peers, we're doing quite well.

We have cable TV, high speed internet, video game subscriptions, gym memberships, nice furniture, new clothes, cell phones, computers, etc. We also manage to save more than 20 percent of our take-home pay.

We don't have kids. If we did, we'd be in an entirely different situation.

But I don't see working as something that we both "need" to do.

We could get by just fine on just one income. We'd probably cancel the premium cable and one of the Warcraft accounts. We might try to negotiate a better cell phone deal. I'm sure there are lots of little changes we could make to spend less. And even so, we'd probably have to reduce our savings rate to 10 percent or 15 percent of take-home pay.

But why would we do this? Working is (usually) satisfying. Having a career gives each of us a sense of purpose. And it's nice to have disposable income and to take fancy vacations once or twice a year.
posted by croutonsupafreak at 3:07 PM on August 21, 2006

I'm finding the assumptions that women who work outside the home do so because they want to buy their greedy kids iPods to be a little disturbing.

Aha! If it helps, I'm not making this assumption, and hope I never would...

And Scarabic has hit on a real problem: lifestyles often do expand to fit all available cash, whether it's a two-income family or a one-income family. Hell, if I would have had the discipline to maintain my student lifestyle for a few years, I could have developed a nice nest egg!
posted by jdroth at 3:08 PM on August 21, 2006


I admit my tone was way too aggressive (but, in my defense, I'll argue that I was talking about a stereotypical two-income-but-can't-keep-the-standard-of-living family). The point I was trying to make is that there are costs to having both parents in a family with kids work, but I was carried away in my own arguments, and ended up sounding like a nostalgic grumpy old sexist.

And, of course, the things I listed have become "necessities", so, even if someone is at home all day, they'll still want their kids in private schools (because public schooling has been scrapped), a car (because the nearest grocery store is miles away, as is the private school, and anything else), and eat "easy food" (come on, I only cook for real for fun, and it IS time consuming, I wouldn't do it everyday). So, you'll incur most of these costs anyway, being a single or double income household, unless you want to really live like in the 50s (like some people cited examples).
posted by qvantamon at 3:18 PM on August 21, 2006

Elizabeth Warren wrote a relevant article for Harvard Magazine. She and her daughter wrote The Two-Income Trap referred to earlier. Commentaries/replies here and here.

The gist of her argument is that while men's wages have remained flat, costs for essentials such as housing, health and child care, transportation, and taxes have increased. She argues that the average family today actually has less money for discretionary spending than its counterpart a generation ago.
posted by CodeBaloo at 3:21 PM on August 21, 2006

There is actually a movement among the evanglicals to encourage families to consume less so the mom can stay home and make sure everyone is praying and all that. I hear them on the radio here in the Bible Belt sometimes, talking about how you only need one car and not a new one, how mom can make most of her own cleaning products, hot to shop at thrift stores, so you can be less caught up in the world and lead a more Godly life.
posted by LarryC at 3:29 PM on August 21, 2006

[Hit the wrong button and posted too soon]

The rest of that comment was that many disagree. As has been pointed out, we have raised the bar on the definition of "essential" significantly.

An important point of her argument is that in the last generation (single income), if the primary wage earner was killed, disabled, fired, whatever, there was another adult available to enter the job market... kinda a reserve worker saved for a rainy day. With both parents working today, and the higher standard of living/less discretionary income, if one of the wage earners is removed, the family is screwed.

I don't know the source or the accuracy, but this graph purportedly showing income 1967-96 in 1966 dollars from here is interesting.
posted by CodeBaloo at 3:33 PM on August 21, 2006

One thing I haven't seen mentioned: with the divorce rate being what it is, can anyone really afford to let themselves be supported by their spouse, while leaving large gaps in their resume? I grew up in one of the few remaining one-income families and I'm sure that my parents would have been divorced by now if it hadn't been for the fact that my mother has been out of the job market for 25 years... I'm not going to put myself in that position if I ever get married.
posted by Jeanne at 3:34 PM on August 21, 2006

Moralizing about how poor people have no one to blame for themselves does worse than nothing to address the real problems.

I said nothing about the poor. I was talking about those in financial crisis and, though the word wasn't used, declaring bankruptcy. In fact you can see below that most of the poor don't have credit card debt problems.

Mintchip quotes Mz Warren "The fact is, out of all the possible reasons for going bankrupt, only three account for nearly 90 percent of bankruptcy: a job loss, a medical problem, or a divorce." What's not clear from that quote, however, is that she's referring to the statement on their filings where people self-identified why they had to file, not independent analysis. Putting aside the question of whether people are being honest with themselves and/or others, that's a statement meant to indicate what precipitated the filing.

So, a person could go out and get credit cards and a mortgage that required them to put 95% of their post-tax income into payments to stay current, have no savings, and then have an accident that caused them to fall behind. The universal default clause could cause all their interest rates to go up and what was once marginally manageable becomes untenable. So they declare bankruptcy. What's the cause? A medical accident.

I am not claiming this is the majority case, I am illustrating that (a) the stated reason for bankruptcy on a filing doesn't tell the whole story and (b) the "final domino" is not necessarily relevant to the why of how someone gets into that circumstance.

I also bring it up because the statement I - and others - took issue with is "Most people in serious debt got there during unemployment, family problems, or illness, not buying flashy clothes because they were suckered by our "consumer culture" when they could have gone to the thrift store"

In particular, I take issue with "in serious debt got there during" - it's more accurate to say they reached the end of their rope as a result of those things, and for the most part they seem to have used up their rope on matters unrelated to their medical issues.

The Post-Gazette has a telling bit of information in that "A study of 1,931 consumer Chapter 7 bankruptcy cases from 84 federal judicial districts in 2000 found that medical debt per debtor was relatively small at $2,582, or about 5.6 percent of the general unsecured debt." Doing the math on that means that there the medical debt averaged $2,582 the amount of unsecured debt (ie, NOT mortgages) was over $46,000.

For some elaboration we can look at this study where less than 1/4 of the respondants had medical bills in excess of $1,000. And as far as that claim of lapsed/no coverage driving them into it? This study shows those declaring bankruptcy for medical reasons (and a very generous definition of medical reasons, IMHO) are no more likely to be uncovered at time of coverage than the other respondants.

Liz Weston distills some more very pertinent data out of the Federal Reserve Survey of Consumer Finances about this over here, though she is talking about the 2001 data. 2004[pdf] is over here and the most recent till 2007 comes out. Completely refuting crabintheocean's implied claim that people are living out of their credit cards out of necessity because of low wages is the fact that 53% of card holders carry no balance at all and "the proportion carrying a balance declined for the lowest two income groups, the lowest wealth group, the youngest age group, nonwhite or Hispanic families, and renters."" Additionally, "borrowing declined notably for the lowest
and next-to-highest income groups and for the youngest age group."

Now you're talking about less than 1/2 the nation carrying CC balances, but about 10% of them - therefor about 5% of the nation - are carrying over 10k on them. About 33% of those people - 1.77% of the nation - makes under $50k a year, meaning they have borrowed 20% or more of their income.

Looking at the percentages we see it's the middle incomes that have the problem. (pA26) - only 30.3% of the families in the lower 20 percentile hold credit card debt. It's those in the 40-89.9 percentile where more hold debt than not. Look at the thousands being carried and the group with the big number is the group most able to just pay cash for things, those in the 80-89.9 percentile! Where those in the bottom 20% of income carry a median $1,100 those up there at the top carry a median $4,000.
posted by phearlez at 3:37 PM on August 21, 2006 [4 favorites]

Builders don't build the same size houses that they built in the sixties. It's more profitable for them to build bigger homes that require two incomes to afford.

I was a child of the sixties, when most women were indeed in the home. People did have party lines on their phones. No one made longdistance phone calls unless it was an emergency. Eating out was a rare and fairly formal occasion.

I had exactly one pair of shoes I wore to church, school and outside (I had flat feet and was not allowed to wear sneakers, but most people had three or fewer pairs anyway.)

In the seventies, more and more women were in the work force. More and more McDonalds and other fast food places-and other restaurants in general -fed us. This was also a time of great monetary inflation-costs literally went up weekly-and women had to work to keep up.

Interestingly I am a stay at home wife right now. We just bought a three bedroom one bath home built in the sixties. We are doing just fine. No cable, but we do have dsl computer access.

I can save enough by cooking from scratch and not having working expenses so that this isn't a strain.
posted by konolia at 3:37 PM on August 21, 2006

lonefrontranger, no, of course it's not always about women's issues. But I think it's dishonest to be making all these sweeping generalizations about what "kind" of people have two-income families, and to condemn them for shelling out for "luxuries" like day care and eating out, without taking into account that, historically, it's been the women doing the bulk of that unpaid labor around the house -- in other words, claiming this (women's) work is not worth paying for and only superficial families would consider doing so.

I realize no one meant to sound like they were telling women to shut up and go make some sandwiches, I'm just saying that putting some of these suggestions into effect would disproportionately affect women, and it's a bit disingenuous to pretend otherwise.
posted by occhiblu at 3:46 PM on August 21, 2006

I mean, it's interesting that only one person mentioned do-it-yourself handy work around the house as something that's now being farmed out and paid for, while almost everyone brought up day care and two cars. And even in your examples of stay-at-home dads, the two guys *have* careers, it's just that they can do them from home. It's so expected that men will work, and that the sacrifices made for men to work are normal, while those made so that women can work are "luxuries."
posted by occhiblu at 3:50 PM on August 21, 2006

If my girlfriend quit her job and stayed home, we'd be ok - but we'd be scraping by. I have cable & a cable modem, but no land line bill, no cell bill (work pays for it) and I have Sirius but it's only $13/mo.

So what's the biggest dent in my financial life? Rent. Rents here are expensive and they're going up (again) at a rate of about 9% each year. Buying a house out here is a near impossibility in my case. I don't have the $73,000 to put down on the $370,000 1 bed/1bath, 23 year old, 786 sq. ft condo.Then there's the $1,800/mo mortgage. That's quite a bit more than we're paying for rent.

Now, if I had the same job in the midwest, I'd have purchased a house years ago and moved.

I think that it really depends on where you're living. I know folks in rural areas that get by just fine on one income because their costs of living are a lot lower. It's when they start popping out kids every year that things get out of hand. Kids are expensive! And so is living in California...
posted by drstein at 4:17 PM on August 21, 2006

it's interesting that only one person mentioned do-it-yourself handy work around the house

Absolutely and you can extrapolate that out to a lot of personal services that people used to do themselves. People used to do all kinds of things from unplugging their own toilets to organizing their own weddings to cooking their own food.
posted by scheptech at 4:28 PM on August 21, 2006

In the 60s-70s our family used almost no professional outside services, and this was pretty common. My mom made dinner from scratch every night, so there were no restaurant or take-out food expenses. Homemade cookies, birthday cakes, home sewn Halloween constumes, prom dresses. She was at home when got home from school and over the summer, so I never needed child care or tutoring. Summer camp, lessons and after-school activities were cheap and minimal--the local rec center. She kept the house books (though my dad did the taxes), made and repaired clothing, curtains, washed and ironed my dad's work shirts. During the week my dad only had to deal with working his job. But on weekends he did the car repair, gardening, electrical, plumbing, painting, and even occational furniture building. Vacations were modest, mostly car trips & camping. Entertainment was watching broadcast tv, playing records, reading books from the library or playing cards. Also, back in the 70's anyway, the interest rate was astronomical, and credit was hard to get, so every expense was agonized over.
posted by tula at 4:38 PM on August 21, 2006

An interesting related point from the New Yorker, in a short article talking about how Americans work more hours than Europeans:

In the American model, then, you work more hours and use the money you make to pay for the things you can’t do because you’re working, and this creates a demand for service jobs that wouldn’t otherwise exist. In Europe, those jobs don’t exist in anything like the same numbers; employment in services in Europe is fifteen per cent below what it is in the U.S. Service jobs are precisely the jobs that young people and women (two categories of Europeans who are severely underemployed) find it easiest to get, the jobs that immigrants here thrive on but that are often not available to immigrants in France. There are many explanations for the estimated forty-per-cent unemployment rate in the banlieues that have been the site of recent riots, but part of the problem is that voluntary leisure for some Europeans has helped lead to involuntary leisure for others. The less work that gets done, the less work there is to do. Helping some people get off the labor treadmill can keep many people from ever getting on the treadmill at all.
posted by occhiblu at 4:42 PM on August 21, 2006 [1 favorite]

Best answer: The total federal, state, and local tax burden on a median-income single-earner family in 1955 was 17.3%. In 1996 it was 37.6% (40.9% for a two-income family with the same total income). Source [PDF]. It's gone down a little since then, but not much. That's a 20-plus-percent chunk of your salary gone.
posted by IshmaelGraves at 4:59 PM on August 21, 2006

To those mentioning the new conveniences made possible by technology (eg, no party lines, long distance, etc) -- yes. But there were conveniences in the 50s that didn't exist in the 20s, and workforce participation didn't increase by 150% to pay for that. There are forces at work here that are larger than the trivialities people are citing. It's not about, like, do I wait for a sale to buy the shirt.
posted by beatrice at 5:30 PM on August 21, 2006

It's so expected that men will work, and that the sacrifices made for men to work are normal, while those made so that women can work are "luxuries."

Forgive me for sounding naive, but how is that expectation a bad thing? (Rhetorical question because this thread is not the correct venue to address these grievances.) Women still aren't treated equally in the work place; their wages are substantially below their male counterparts; and now you want to equalize the expectation that both men and women should be the breadwinner? That's not fair to women, IMHO. As long as women are treated as second class workers, the stereotype that men should be the breadwinners helps to protect women from wrongful accusations of not working hard enough for their families, which I think is a good thing.
posted by SeizeTheDay at 5:45 PM on August 21, 2006

Another reason you need two incomes is that the bank doesn't care how much money you have at the end of the day -- just how much you're bringing in. Let's say you make $50k a year, but $17k goes to taxes and $13 k goes to daycare. Then you spend $2000 a year on lunches and lattes. You have to hire a housecleaner every two weeks for $1200 a year. Your family eats out twice a week extra, resulting in $6k a year. You're left with around $10k. Now get yourself to work, dress professionally, do your hair, go to the odd networking event, etc. You could easily reduce that income to $0.

Now say you stay at home with your kids. You take care of them, make all the meals, clean the house, etc. You're providing an economic benefit of around $50k a year, given the foregone expenses and the labour you provide.

But the bank won't loan money to the stay at home parent. So the person who has nothing left over -- but a $50k income on paper -- can qualify for $185k more on the family mortgage.
posted by acoutu at 5:54 PM on August 21, 2006

There are forces at work here that are larger than the trivialities people are citing.

Well consumerism is one non-triviality - through the roof expectations in less-than-life-critical areas. Examples: kids toys, most kids rooms look like an explosion in a primary-colored plastics factory; sports, we spend stupid money on tickets, collectables, branded clothes, and gear; or clothes in general, clean sweep featured a guy last year with 70 pairs of street shoes.
posted by scheptech at 5:54 PM on August 21, 2006

SeizeTheDay, black men make about 82 cents on the dollar compared to white men. Is this a good thing too, making sure there aren't unrealistic expectations on black men to be self-sufficient, or providers for their families?

I'm a little mystified by your logic.
posted by occhiblu at 6:08 PM on August 21, 2006

My logic is that you are putting the cart before the horse. Equality of expectations (of who should be the bread-winner) can only arrive after equality of pay. And of course, you could argue chicken or egg, but I think that equal pay is far more important to women than the stereotype of who should be the breadwinner. That's just based on my experience though, and not hard data. Trying to compare the income between white and black men is irrelevant.
posted by SeizeTheDay at 6:28 PM on August 21, 2006

We're a one income family, and our one income isn't all that impressive (it's less than 100k) but we do alright. We live in a 3 bed 2.5 bath house, each of us have a car-mine is new that we bought in May, traded in my 1998 van that I drove to death and was paid off and he drives a 95 Mitsubishi POS.

We have lots of extras and luckily the only thing that changed for us is that we took my son out of preschool when I lost my job-other than that we still have a nice lifestyle.

That being said, we're putting our house up for sale since we have about 110k in equity that accrued in 8 years and since the big kids are all at college (3 of them), we don't need this space. We're looking to relocate to central Indiana where the cost of living is even less expensive than it is here (Jacksonville, FL). We used cloth diapers for my son before he was potty trained, I wear yoga pants and tank tops almost every day, I cook most of the time and sew a LOT of our gifts that we give. I do miss working and am sending out resumes but not panicking because my income basically was for fun stuff, we're not going to declare bankruptcy or be foreclosed on without my paycheck.
posted by hollygoheavy at 6:30 PM on August 21, 2006

but a $50k income on paper -- can qualify for $185k more on the family mortgage.

There's a lot truth to that and following on, banks didn't get to be banks by misunderstanding financial realities, they know that people will almost always pay a mortage first, before just about anything but food, so they 'bank' on people cutting back on other things like getting their hair done to keep making the payments on a long-term basis. Taking on a to-the-hilt mortage is kinda like moving on to crack cocaine from smoking pot so yeah, the bidding up of house prices is a major contributor to the need for two workers. It's a lot harder to stop making mortage payments than to cut back on a bunch of other minor things.
posted by scheptech at 6:31 PM on August 21, 2006

I doubt women married to middle-income men are making any greater contribution to the household than they used to in most of American history, in the days before washers, dryers, vacuum cleaners, shoes and clothes too cheap to be mended, cheap processed and semi-prepared food, and, of course, birth control (don't forget women routinely had three or four children and regularly had five or more).

The technological obsolescence of much of that labor created a vacuum which jobs outside the home have filled, and in turn created a supply of money which the economy sopped up with some economically real new supply (second cars, fourth bedrooms) as well as some serious real inflation (housing and education). Health care I'm not sure about it: it's a lot more expensive, but it's also a lot better.

If there was a period in the 50s to the 70s when American women's concrete household contributions diminished temporarily, that was just a reflection of abberantly high male incomes, made possible through the absence of effectively competition from the first world (Germany and Japan rebuilding from WWII, Western Europe hobbled by socialism), second world (Communist command economies not performing effectively), and third world (the old colonialists didn't feel free to exploit the colonies anymore, but the decolonizing countries weren't producing effectingly on their own, either).
posted by MattD at 6:39 PM on August 21, 2006

And women are going to earn equal pay by... staying at home and not working? By accepting the idea that their work is just a frill with no real importance to their families? By saying it's OK that companies don't pay them fairly, so thank god their husbands work?

I was saying that unconscious assumptions about what's reasonable for a family to pay for most often puts the burden of doing unpaid work on the woman, and that those assumptions can keep women from pursuing (paid) work that they want to do, which I certainly would find unfair, and I think many men would find equal constraints on their choices unfair. Unequal pay is part of those assumptions, though not really the focus of the current conversation.
posted by occhiblu at 6:39 PM on August 21, 2006

skeptech: "consumerism is one non-triviality - through the roof expectations in less-than-life-critical areas"

Where's the data that consumerism is higher now than ever before? People bought party dresses back in the 1920's. People "kept up with the Joneses" in the 1950's. Nah, it's macroeconomic forces. Being frugal can't compensate for federal policy. The government sets minimum wage at $12,000 / year and we're here suggesting people cut out coupons. C'mon.

(Not that I'm in favor of spend-thrift consumerism and credit card debt. I just think we shouldn't miss the big picture here.)
posted by beatrice at 6:59 PM on August 21, 2006

Beatrice, I think you go to far in the opposite direction. Sure, it's macroeconomic forces. But it's the little stuff, too. Cutting out coupons can help, and to belittle that misses the point. Consumerism is higher (and I wish I had my books at my side so that I could cite sources for you) now than it has been. Sure, people have always craved luxuries, but the magnitude and variety of luxuries have grown with time. Elsewhere, I recently wrote about the dawn of the age of credit during the 1920s, which also saw a rise in consumer behavior. It seems that wealth breeds consumerism. (Which may or may not be a good thing, depending on your point of view.)

Being frugal can compensate for Federal policy, at least in part. I'll never understand why some people are so set on discouraging thrift. Frugality is a good thing. It is a virtue. It harms noone. It helps the person being thrifty. Why talk smack about it? It's not the only answer, but it's part of a larger solution.

The "big picture" is complex, and is neither wholly macro- or microeconomic.
posted by jdroth at 8:49 PM on August 21, 2006

I think it's almost entirely tied to standard of living.

Our 2-bedroom apartment is nearly the same square-footage as the 3-bedroom house I grew up in, and larger than my parents' first 3-BR house. We were a 1-income family when I was growing up.

And a computer replaced every 3-5 years? Cable TV? Cellphones (2)? Adjusting for inflation, I make marginally more than my dad did, but we have much higher expenditures on things that aren't really considered luxuries -- but I have a better TV, sound system, and musical equipment than some of the richest families in town as recently as 1985, and a computer that would've made my 5th-grade self salivate.

On the other hand, my parents lived 10 miles from downtown LA, and when they bought their house (in the Johnson administration), it was pretty much the boonies. Now the boonies is Palmdale, 50 miles from downtown.
posted by chimaera at 9:39 PM on August 21, 2006

Some of the things we may see as luxuries are really just paid versions of what women previously provided for free: restaurants, cleaners, daycares/preschools, decorators, painters, etc. And, since men have had to take on a greater share of chilcare and housekeeping duties, we also see more paid use of mechanics, handymen, and the like.

Warren's book suggestions that the other "luxuries" do not take up any more disposable income than they used to. (For example, I pay $8 for portraits at Wal-Mart, whereas my mom used to pay a little more than that for pictures at Sears...30 years ago.)
posted by acoutu at 10:04 PM on August 21, 2006

I've been supporting my family on about $40,000 in the hinterlands of the Bay area for the past three years, but I had to give up a lot of the toys and luxuries that my friends enjoy. I've been living like my grandparents did. --Levkar

I am not worthy!

(no sarcasm intended)
posted by mecran01 at 10:24 PM on August 21, 2006

Best answer: It's just not possible for a family of four to afford a statistically average life on the average salary. The numbers:

Average US annual wage: $36,764 (Census data)
Expected monthly take-home after taxes, social security, health care: $24509
Monthly take-home: $2042

Median US home selling price June 2006: $230,000
( note that this is lower than average)
Monthly mortgage: $1342 (30 year loan, low 5.75% APR)

Average Electricity/heating: $124/month
( Again, from the census)
Car payment on a modest $13,000 car: $250/month (60 month loan)
Car and home insurance of $75/month
Food: $438/month
(From the USDA "thrifty" food buying plan for a family of two adults, two kids)
Trash pickup/water service: $30/month

$2042 - $1342 - $124 - $250 - $75 - $438 - $30 = -$217

Yes, that's negative $217 left over.

Note that *no* entertainment items are factored in here, nor are computers, nor is credit card debt, nor are such basics such as appliance purchases, home maintenance, clothes or gasoline. This is for a single, modest car. This assumes that the employed member of the household has decent health insurance from their work. In short, the numbers just don't add up. I'm estimating *low* here. There are regional variations, but cheaper housing typically is found in areas with lower salaries.

It's difficult to find information on purchasing many necessities in the 60's, but it looks like in 1963, the average annual salary was $5400, and the median new home sale price was $18,000. New home prices have increased by 12.7x, while salaries have only increased by increased by 6.8x. The tax burden, over the same time, has doubled (as above). That should tell you a huge part of the answer right there.

This isn't about iPods and cable TV. A teenager working a summer job can afford an iPod and basic cable. It's not about credit card debt, except for the fact that it's easy to go into debt when housing is so expensive. The average adult working all year simply can't afford an average house, a modest car, and the bare necessities for their family. And I hope it's clear from these numbers why it's hard to make ends meet, not just for single-income families, but for those with two working parents.
posted by eschatfische at 11:20 PM on August 21, 2006 [16 favorites]

eschatfische: Excellent post. I never would have thought to add up the averages of income and expenses. The only flaw in your data appears to be the use of 2002 average wages and the June 2006 median house price. The scary thing is that the mean family income appears to have dropped between 2001 and 2004 (though the median increased slightly). Obviously, housing prices skyrocketed in the same period.

Your point is a good one, though, and bears repeating: average housing costs have increased dramatically in proportion to the average wage. This lends credence to the fears that many people will end up homeless when mortgage rates return to their historical mean of 8-9 percent. It's not surprising that a lot of people are crying "bubble".
posted by gwenzel at 3:42 AM on August 22, 2006

Expected monthly take-home after taxes, social security, health care: $24509

How did you figure this number? That seems like the important one.
posted by smackfu at 6:39 AM on August 22, 2006

Response by poster: Thanks to everyone. I originally was looking for straight economic data, but didn't put it in the question because I didn't want to overlook any other (less quantifiable) reasons that I had not considered either. I also appreciate the idea that I may have had a mistaken impression about how many families _actually_ had only one income. Of course regardless, I didn't mean to diminish the role of women. In my family, my mom and my grandmother always worked, but for the most part it did did not seem that they were forced to by financial pressure, as appears (anecdotally) to be the case now among my friends and family, so it was really more of a belief that one income went farther then vs. now, and this thread has given me plenty to digest.
posted by horsemuth at 7:04 AM on August 22, 2006

Exactly, smackfu. With child tax credits on both children, deducting interest on the mortgage, and various other line items, the total net income taken home would be far greater than $24509. As it stands, eschatfische is quoting federal, state, and local taxes at 33%, which is unrealistically high.

And BTW, quoting a best answer in this thread is like quoting a best answer asking for the meaning of life. There are so many, many great answers in this thread that to define one as best is just plain wrong.
posted by SeizeTheDay at 7:06 AM on August 22, 2006

I'm noticing that a lot of people are basing their idea of what life was like in previous decades on media images, like Leave It To Beaver, etc. Overextending oneself by buying things on credit and having to deal with repossession/liens etc. is nothing new. My father witnessed it firsthand with my grandmother in the 50s.
posted by electroboy at 7:33 AM on August 22, 2006

It's just not possible for a family of four to afford a statistically average life on the average salary.

That's not really what's relevant, though. The big expense there is the home, and a median home now differs strongly from a median home in 1955. 1000SF 3 bedroom / 1 bath houses are probably well under that median price in nearly all cities.

A family of four would have far less trouble living a statistically average life from 1955 or 1965, as many here have noted, because median consumption has shifted to two-earner consumption.

Really we ought to fiddle with the car too. How much would it cost to buy an inefficient, unreliable, substandard-performance, unsafe car without even seat belts, much less air bags or ABS? You can probably still find models almost as bad as 1960 cars built for local markets in Mexico or Brazil, for example.
posted by ROU_Xenophobe at 7:34 AM on August 22, 2006

Response by poster: And BTW, quoting a best answer in this thread is like quoting a best answer asking for the meaning of life. There are so many, many great answers in this thread that to define one as best is just plain wrong.

Yeah, I realize that and in a sense I regret marking any as best, but IshmaelGraves had a simple answer that was closest to what I was originally looking for, and eschatfische had a straightforward post with good sourcing. The thought behind my "thanks" post above was to highlight that I really appreciated the other comments that made me think in a different way about my assumptions. If that didn't come across...mea culpa. I certainly agree that nearly all the posts - minus the unhelpful snark (I'm looking in your direction The Jesse Helms) - were excellent and thought provoking, and exactly why I love this site. Thanks again to all.
posted by horsemuth at 8:09 AM on August 22, 2006

eschatfische - your house / wage numbers tell an interesting tale.

House prices up 12.7 times.
Salaries up 6.8 times.
The ratio between them is double, two people.

So, houses are priced to serve a two-income market or you could say wages have been reduced by half relative to house prices.

Either way you look at it the average house price has been 'bid up' by double from one-earner days (and they've gotten bigger and further away from work) and a lot follows on from that creating many of the conditions and phenomena mentioned above.
posted by scheptech at 9:17 AM on August 22, 2006

Awesome, eschatfische.

jdroth, I don't mean to belittle being frugal, though I can see why it sounded that way. I have a lot of respect for it. But it's a pet peeve of mine that people often put the focus on what individuals can control and ignore major driving forces. Sure, I can be frugal, but in the context of an insane housing market, that $14 I'd save buying my shirt at Goodwill instead of Old Navy would be a drop in the bucket compared to my mortgage. To pay such a mortgage, I would have to be really frugal, true. But those who can't pay such a mortgage, the reason is not that they are not being frugal. The reason is that home prices are insane. (I know at least a half dozen extremely frugal renters who are trying to buy homes but can't yet.) My bigger concern is that focusing on what people can control justifies blaming those who still can't make ends meet, as though it were a moral failure.
posted by beatrice at 10:39 AM on August 22, 2006

smackfu: I took IshmaelGraves's 37.6% figure and actually rounded it down to 1/3 of the total income to account for the credits/deductions the family may have due to the children and the mortgage. Even with the recent decreases in federal taxes, when you take into account state and local taxes (including property taxes in many areas), as well as deducting household medical expenses (such as employee contributions, but also including insurance co-payments and deductibles), I'd be amazed if take-home after taxes and medical for any given four-person family was greater than the number I gave. I'll run some harder numbers later.

Keep in mind that for the average family to break even in my scenario before home maintenence, appliance purchases, clothing, gas, entertainment expenses et al, that state/local/federal tax/medical expense burden would have to drop to 26%, which I believe to be unlikely.

ROU: regarding housing, while I agree that there are forces in both directions, people are at the mercy of the market to a great extent, and right now, home ownership is costly. Inexpensive housing just isn't available in many areas for new homeowners to purchase, like there was with the tract homes of yore. Cause and effect is difficult to establish here, but no single single-earner family can shift housing prices back -- something much larger would need to happen.

Regarding cars, I hope that was sarcasm. With a single-earner household, it's important for the wage-earner to have a reliable and safe car to get to work and back. Public transportation isn't an option for a huge number of jobs. $13,000 will buy you a 5 year old Camry or a couple-year old Caravan, which are modest, appropriate and reliable cars for a 4-person single-car household that would still have five years in them to justify a 60-month loan. When you start talking about less reliable cars, you'd also have to factor in additional maintenance costs and lost time at work.
posted by eschatfische at 11:46 AM on August 22, 2006

I think you also have to realize that public transit may not be an option not because the family has chosen to live in the suburbs, but because companies have moved out of cities. Corporations have, in many cases, put the financial burden of having access to jobs onto their employees.
posted by occhiblu at 12:03 PM on August 22, 2006

Corporations have, in many cases, put the financial burden of having access to jobs onto their employees.

Yes excellent observation, as companies move to outlying areas they move beyond reasonable reach of public transit so employees need cars. Costs go down for company, and go up for employees, and for the environment one might add. I suspect it'd be instructive to investigate this further as a general trend, this sort of inventive cost-shifting and its effect on 'real wages' over the last few decades.
posted by scheptech at 12:31 PM on August 22, 2006

while I agree that there are forces in both directions, people are at the mercy of the market to a great extent, and right now, home ownership is costly.

In some areas. In others, not.

Your $230,000 figure was for a new home, the average size of which is nearly twice what it was in 1970. But the old, small houses with one bathroom are still available for purchase at steep discounts relative to new homes.

Obviously this doesn't mean that everyone in San Francisco or Boston can afford a 3-1 detached house. But it does mean that your figure is way off -- you can live like a middle-class family of the 1950s for far less than you can live like a middle-class family of 2000.

Regarding cars, I hope that was sarcasm.

Nope. Part of why some things are more expensive than they had been is that new items are distinctly superior to old ones, or that old ones might be judged so dangerously inferior as to be banned.

Again, the point of comparison should be to living standards of a middle-class family in 1955.

That does not include a modern car like, say, an Accord, that you can drive for 10 years with minimal maintenance and can that you would be unsurprised to find that, after ten years, you had never had a drivetrain issue with, and which you could probably win LeMans with in 1955. The proper comparison would be a car substantially inferior in every way (bar size) to the worst cars coming out of Korea now. Brand new Elantras come in at under $16K, for God's sake, and they'd be the greatest car in the world in 1955.
posted by ROU_Xenophobe at 2:22 PM on August 22, 2006

More to the point: if you want to live a 1955 lifestyle in 1955 living standards, you don't need a new car or even a 5-year-old car. You can get a car that would be better and more reliable than any car in 1955 by picking up a 12-year-old beater Subaru with 250K miles on it and that can barely pass inspection for $1500.
posted by ROU_Xenophobe at 2:25 PM on August 22, 2006

ROU: I don't have Census data on existing-home sales, but this press release from the NAR indicates that the median price of existing home sales isn't substantially different than that of new home sales. That's not to say that bargains can't ever be found. Still, the population of the US certainly isn't shrinking, people hold onto their homes, so inexpensive existing homes on par with the new homes of the 50's or early 60's are likely not be found in many areas. It's also not like the sale value of an existing home doesn't increase with the market, and a lot of those cheap 50's homes are now pricier aught homes.

As for the cars, we're going to have to agree to disagree. A $13,000 5 year old Camry, generally regarded as the "reliable family sedan" of the age, on par with your Accord example, still only has around 7 years of life left in it. Mileage (literally) varies, but in many US climates, even if the drivetrain holds up and regular maintenance is done, the body on the car is going to go to seed at around the 12 year point due to salt corrosion (which is currently happening to my father's 1994 Camry, in exactly the same way his well-maintained '71 Chevy Impala needed to be replaced in the early 80's). A 12 year old Subaru in Milwaukee doesn't have much life to live. I think it's reasonable to think that new cars of the 50's and 60's had around 7 years of life in them before becoming problematic, and that's on par with a well-chosen $13,000 used car today.
posted by eschatfische at 3:41 PM on August 22, 2006

I think it's reasonable to think that new cars of the 50's and 60's had around 7 years of life in them before becoming problematic, and that's on par with a well-chosen $13,000 used car today.

You're comparing new cars of the 50's with used cars of today? That doesn't seem fair. I'm not convinced that 60's cars died that much more quickly than today's models, though. I drove a 30-year-old car for a while and it did quite well. I suspect that if there has been a big improvement in longevity it's largely thanks to the better engine oil we use today.

Anyway, there was nothing to stop people of that distant past buying used cars. I'm willing to bet that inexpensive beaters that'd barely pass inspection were no less common then than they are now. New car prices, adjusted for inflation, were about the same as they are today. Of course performance and safety of motor vehicles is much better today on average, but that makes little difference really. I think people care a lot more about performance relative to everything else on the road than they do any absolute measure. Besides, traffic conditions have gotten much worse I think, compared to 1955. That's at least one aspect of a "1955 lifestyle" you can't get on a 1955 salary in 2006. I'm not sure how many people owned cars in the 50's. Probably fewer than today, and that would be a much more reasonable point to consider in the comparison.
posted by sfenders at 6:49 PM on August 22, 2006

First off, let me state that I'm basing my comments on only one data point, but it's one I know well: Me. I'm married, and my wife and I have two small children. It *is* possible to raise a family at a decent standard of living on one income. My wife and I are doing it. My advice (all things we practice):

Make your housing choices wisely; don't buy into the American myth that you must own a big home, or that you must own a home at all (consider renting). Don't be house poor. Take public transit. Own one car, not two. (Your housing choices determine the practicality of the previous two items.) Live below your means. Do all your own cleaning, laundry, landscaping and minor home repairs. Eat 95% of your meals at home. Take little roadtrip vacations and larger, more expensive ones only every few years. Shun the latest and greatest possessions if you cannot easily afford them. Purchase new equipment (TVs, furniture, lawnmowers) very infrequently and very carefully. Consumer Reports is your friend. Comparison shop like mad for home, auto, and life insurance (revisit every 1-2 years). Cut out all unnecessary services (how many movie channels do you have? Do you really need Netflix?). Make a budget and stick to it. Save as much of your gross income as possible. Invest in assets, instead of spending on consumables. "The Millionaire Next Door": Read it. Love it. Live it.
posted by onesix18 at 8:12 AM on August 24, 2006

because everybody is trying to keep up with the Jones'

absolutely ridiculous IMO

now I see that home values are falling, oh boy lol
posted by BillyG at 3:47 PM on August 24, 2006

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