The Middle Class Two Income Trap

[jimmygu3]

Re: The Middle Class Two Income Trap

It's all about wealth disparity . . . .

As the Financial Elite siphon more and more out of the economy, there is less and less left for the rest of us.

The economic problems we now have are primarily due to an unrestrained elite class who want an ever-growing share of the wealth . . . and they could care less if others suffer in the process.

Most recent example on ABC News last night . . . insurance companies pulling in record profits.

Administration Says Insurance Companies Pull in Profits While Raising Premiums. Health and Human Services Secretary Kathleen Sebelius railed against the insurance companies … HHS Report Takes Aim At Rising Health Insurance Premiums. Wall Street Journal -- Health insurance system broken, new report says. CNN International Sebelius: Reform needed to fight insurance hikes

Do you think these rich people and their politician enablers will willing accept a reduction in wealth?
Oh my gosh . . . that would mean having to scrape by with 4 mansions instead of 5 . . . that will never do.

No. The only way to achieve economic justice is to FORCE the Financial Elite through political action . . . starting with Voting Out the Incumbents.

Or, if you have a better idea, I'd like to hear it . . . .

I agree it's all about increasing wealth disparity. It's also related to an unwillingness to reduce our standard of living as real wages decline. Most families choose to have two in the workforce rather than living on less money.

The sexist comments being made by unlucky and other posters are total BS. Blaming this on women's lib is confusing correlation with causation. If women had remained oppressed for the last 40 years, we still would have had a decline in real wages, only it would have been accompanied by a significant reduction in overall standards of living due to one-income households. Are there really people here who believe my daughter should not be allowed to pursue whatever career she chooses? That's what women's lib is about: freedom of opportunity.

-Jimmy

[karim0028]

Re: The Middle Class Two Income Trap

I agree it's all about increasing wealth disparity. It's also related to an unwillingness to reduce our standard of living as real wages decline. Most families choose to have two in the workforce rather than living on less money.

The sexist comments being made by unlucky and other posters are total BS. Blaming this on women's lib is confusing correlation with causation. If women had remained oppressed for the last 40 years, we still would have had a decline in real wages, only it would have been accompanied by a significant reduction in overall standards of living due to one-income households. Are there really people here who believe my daughter should not be allowed to pursue whatever career she chooses? That's what women's lib is about: freedom of opportunity.

-Jimmy

I agree, besides i think that alot of folks were probably being facetious.... I for one dont subscribe to the bare foot and pregnant mentality I believe everyone should have the capacity to do what they wish; bc they want to, not bc they have to...

Its not the fault of Womens Lib movements... Its a systemic problem with the monetary system (always favoring inflation) and political crony-ism; where those in the inner circle get the best pickings...

But, getting back to Womens Lib... I know a ton of ladies in their 20's (single , married, with kids and without kids) who would love to be able to afford to be stay at home moms, but with high living expenses its just almost not possible, if you want to be able to afford anything besides subsistence living... So, they do it bc they have to, not bc they really want to....

Sad state of affairs actually, bc at some point you either have to be wealthy or move out of the US to be able have a decent standard of living w/o killing yourself working....

Almost every "professional" in the US is a debt slave or simply a slave without knowing it..... As i believe Alan greenpants once said something to the effect that wage demands are under control due to the fact that with everyone being tied down with debt they are too afraid to ask for a raise for fear of being fired.... That is the ultimate form of slavery... The appearance of freedom fused with the reality of slavery...

I look around in a professional environment, in supposedly high paying fields and i see nothing but folks with mortgages, car payments, CC payments, cable bills, insurance bills, etc... Each of them deathly scared of getting laid off, bc if they did, they would lose the house, the car, the "life style"... Its a mirage, you are given the appearance of wealth, but in reality, you own nothing but a dream.. I feel like i'm in the movie the sixth sense... "I see broke people... Their everywhere..."



Like George Carlin said so eloquently, "They call it the american dream... Bc you have to be asleep to believe it....."

[charliebrown]

Re: The Middle Class Two Income Trap

i agree with most of the things said here except all the feminist/anti-feminist remarks. I don't want to touch that.

The "median" house now is much bigger nicer than the median house of 1950. Some things about older houses are nicer real wood for example, copper piping etc, but a newer house is much more energy efficient, lower maintenance (except of course if your old house is brick), modern wiring.

Same with cars. Much more reliable than a car from the 60's, although my dad could fix our car by himself. He was a mechanic in the army. not with a new car and all the electronic stuff (computer control, fuel injection etc.)

However, I do agree with the general premise that the middle class is being squeezed by the cost of basics, compared to the former generation.
In the 90's it was easy to run my household on my income. No budget, no worries, now we have to watch our pennies. I can take a few more tax increases (shhh don't tell) that is my biggest expense., but not many more or I will have to send my wife to work.


Another paradox of two incomes it that it is actually easier to go bankrupt. How you might ask.

Well if two incomes are REQUIRED for the esentials, then if either partner gets the whack then the family is in trouble. If it only takes one income to run the household then two incomes reduces the chance of BK.

[flintlock]

Re: The Middle Class Two Income Trap

"That the chickenshit nature of this father who was afraid of having the responsibility of being the lone provider for his family,"

What??????????????

Males were blamed for not letting women work. Then women come into the labour force and real purchasing power of wages naturally declines. So now men get blamed for "not taking responsibility of being the lone-provider in the family".

What feminist clap-trap! Whatever happens, whatever women want to do, males are always to blame.

Pssst: My next wife will be a cat from the humane society.

You miss the point Steve. The man earned a net income just as great with or without his wife working. He couldn't handle the "pressure" of being the only breadwinner. In other words, he wanted the ability to fuck off on the job, lose his job, and still not be completely without an income. I am talking about a particular individual, not men or women in general. He is now divorced and until his mommy paid his $8000 in back child support, he was constantly behind on that. Or are you for that as well?

And stay away from my cat!

[unlucky]

Re: The Middle Class Two Income Trap

The sexist comments being made by unlucky and other posters are total BS. Blaming this on women's lib is confusing correlation with causation. If women had remained oppressed for the last 40 years, we still would have had a decline in real wages, only it would have been accompanied by a significant reduction in overall standards of living due to one-income households. Are there really people here who believe my daughter should not be allowed to pursue whatever career she chooses? That's what women's lib is about: freedom of opportunity.

-Jimmy

Hmm... I guess my comment was open to mis-interpretation, so let me clarify: I am all in favor of women joining the workforce and having exactly the same rights as men.

My point is that the way in which it was done was bungled. It was all about "elevating" women to the level of men, while the valuable work that was always done in the past by women was totally poo-pooed. Much to the loss of society.

A good solution in my view would be to reduce the mandatory working week to 3 days for everyone. That way, employers get 6 working days per household. And the extra training costs would be covered by the productivity gain from allowing talented women to be more than housewifes.

[jimmygu3]

Re: The Middle Class Two Income Trap

Hmm... I guess my comment was open to mis-interpretation, so let me clarify: I am all in favor of women joining the workforce and having exactly the same rights as men.

My point is that the way in which it was done was bungled. It was all about "elevating" women to the level of men, while the valuable work that was always done in the past by women was totally poo-pooed. Much to the loss of society.

A good solution in my view would be to reduce the mandatory working week to 3 days for everyone. That way, employers get 6 working days per household. And the extra training costs would be covered by the productivity gain from allowing talented women to be more than housewifes.

OK, sorry for the misunderstanding. Good point about the way society seemed to look down on homemakers, particularly in the '80s and '90s. I think it is now more appreciated, even as it is becoming an impossibility for most. The new ideal in my limited sphere is to have one parent who works part time with flexible hours, and can spend the rest of the day taking care of domestic stuff. My wife and I are not wealthy, but we have always been fortunate enough to never need day care. I know several families with stay-at-home dads, which is a cool by-product of women's lib.

-Jimmy

[karim0028]

Re: The Middle Class Two Income Trap

OK, sorry for the misunderstanding. Good point about the way society seemed to look down on homemakers, particularly in the '80s and '90s. I think it is now more appreciated, even as it is becoming an impossibility for most. The new ideal in my limited sphere is to have one parent who works part time with flexible hours, and can spend the rest of the day taking care of domestic stuff. My wife and I are not wealthy, but we have always been fortunate enough to never need day care. I know several families with stay-at-home dads, which is a cool by-product of women's lib.

-Jimmy

I gotta say, being a stay at home dad would be tough for my ego to swallow... I couldn't deal with being a house husband... Something about being a man just doesn't jive with that for me ;)

Me man, must chase woman, must club food, must feed and protect family

Props to anyone who can handle being a house husband, but that is taking gender roles a little to openly for my tastes...

[Starving Steve]

Re: The Middle Class Two Income Trap

I gotta say, being a stay at home dad would be tough for my ego to swallow... I couldn't deal with being a house husband... Something about being a man just doesn't jive with that for me ;)

Me man, must chase woman, must club food, must feed and protect family

Props to anyone who can handle being a house husband, but that is taking gender roles a little to openly for my tastes...

I don't want specific gender roles for either gender. I have never been in favour of going back to the old ways.

However, I do not like women's lib types just dumping responsibility onto the man and not taking half of the responsibility of supporting the household themselves. The way it is now, if the woman wants to go to war, she goes to war. If she wants to work, she goes to work. If she doesn't want to work, she stays home. If she wants a new husband, she just goes to a divorce lawyer. The guillitine comes down, and she gets half of everything in a divorce settlement, automatically. Goof around and enjoy life, she still gets half. But a male doesn't quite get the same options; in theory yes, in practice no.

A cat in a marriage wouldn't cause problems. No divorce lawyers, nor settlement agreements, nor automatic 50:50 for a cat. No automatic support entitlements for a cat or for its kittens. No unknowns with a cat. No: "I'll stay as long as it works for me," with a cat.

Cat cost: 33cents per day for cat food. And that is it; you have a friend for life.

Do you know of a cat that ever got affirmative action as an entitlement in the job market?

A quote from the late Ann Landers, newspaper columnist which I have never forgotten: "Anyone who thinks marriage is a 50/50 proposition either hasn't been married or doesn't know fractions."

[karim0028]

Re: The Middle Class Two Income Trap

I don't want specific gender roles for either gender. I have never been in favour of going back to the old ways.

However, I do not like women's lib types just dumping responsibility onto the man and not taking half of the responsibility of supporting the household themselves. The way it is now, if the woman wants to go to war, she goes to war. If she wants to work, she goes to work. If she doesn't want to work, she stays home. If she wants a new husband, she just goes to a divorce lawyer. The guillitine comes down, and she gets half of everything in a divorce settlement, automatically. Goof around and enjoy life, she still gets half. But a male doesn't quite get the same options; in theory yes, in practice no.

A cat in a marriage wouldn't cause problems. No divorce lawyers, nor settlement agreements, nor automatic 50:50 for a cat. No automatic support entitlements for a cat or for its kittens. No unknowns with a cat. No: "I'll stay as long as it works for me," with a cat.

Cat cost: 33cents per day for cat food. And that is it; you have a friend for life.

Ever know of a cat that got affirmative action in the job market?

Women, cant live with'em, cant live with out'em... I think your forgetting something pretty important.... Unless you like being on a first name basis with the palm of your hand ;)..... I'd like to see your cat help you out there

[Rajiv]

Re: The Middle Class Two Income Trap

I think the original article was highlighting the paradoxes, and was definitely not blaming women's lib for it.

The paradox lies in the fact that it is to the benefit of a family if both members bring in an income -- as long as not too many people adopt the same strategy. However, as an increasing number of people do that, the labor market saturates, leading to an overall impoverishment of ALL families.

A mandatory 3 day work week as postulated above may well work, as long as everybody does not take the same days off -- split work weeks should be effective, with work happening 7 days a week, with individuals only working 3 days a week. However, this would require a significant psychological shift, as highlighted by Karim0028's post.

[karim0028]

Re: The Middle Class Two Income Trap

I think the original article was highlighting the paradoxes, and was definitely not blaming women's lib for it.

The paradox lies in the fact that it is to the benefit of a family if both members bring in an income -- as long as not too many people adopt the same strategy. However, as an increasing number of people do that, the labor market saturates, leading to an overall impoverishment of ALL families.

A mandatory 3 day work week as postulated above may well work, as long as everybody does not take the same days off -- split work weeks should be effective, with work happening 7 days a week, with individuals only working 3 days a week. However, this would require a significant psychological shift, as highlighted by Karim0028's post.

I find it hard to believe that i am the only one with that psychological tilt?

I'm 28, not some set in my ways curmudgeon I think its a male need to feel like he can provide for his family, wife/gf...

To clarify, I am not talking about wether the wife works or not and the household is a dual income household... I would have no problem with a divided work week, if the wife would like to work...

I am talking about being a house husband, where the wife provides and the husband sits at home and gets an allowance... That i could not do...

[GRG55]

Re: The Middle Class Two Income Trap

...I am talking about being a house husband, where the wife provides and the husband sits at home and gets an allowance... That i could not do...

Hmmm...house husband sounds pretty good actually...

A couple of years back Mega started a thread titled "Why do we want to be Wealthy?" ...and I posted the following:

All interesting posts, but my life goal has always been to eschew wealth, in favour of becoming a burden on society.

I put that down on a form (in the "What do you want to be when you grow up" box) in a "Career Management" seminar during my stint at Fortune 100 Big Oil. Almost got me a package, but not quite.

By the way, when HR Departments starting sponsoring Career Management programs, it's a sure sign there's neither a desirable career path, nor desirable management at the helm of the organization.

I left Big Oil some time ago, but that life goal still eludes me...

The next best thing to being a burden on society is being a burden on the wife. Unlike you, I would have absolutely no difficulty adjusting to the status of "kept man".

In the infamous words of "W"...bring it on...

[jpatter666]

Re: The Middle Class Two Income Trap

Hmmm...house husband sounds pretty good actually...

A couple of years back Mega started a thread titled "Why do we want to be Wealthy?" ...and I posted the following:The next best thing to being a burden on society is being a burden on the wife. Unlike you, I would have absolutely no difficulty adjusting to the status of "kept man".

In the infamous words of "W"...bring it on...

Ha....I often joked that my goal in life was to be a kept man. Came quite close to it just recently -- she had an offer for a position in South Africa, but we finally decided to turn it down.

Ah well....the dream remains though. :p

[karim0028]

Re: The Middle Class Two Income Trap

Hmmm...house husband sounds pretty good actually...

A couple of years back Mega started a thread titled "Why do we want to be Wealthy?" ...and I posted the following:

The next best thing to being a burden on society is being a burden on the wife. Unlike you, I would have absolutely no difficulty adjusting to the status of "kept man".

In the infamous words of "W"...bring it on...

Perhaps i am a 28 year old curmudgeon w/o realizing it The independent streak in me makes me always want to be self sufficient and dependent on no one but myself.... Thinking about it though, I wouldn't mind being a burden on society either ;) But, being a burden on the wife/gf comes with blowbacks (ie. bitching) that i would rather live without

Ladies know how to throw those stinging jabs with a single word or a look that tends to sting more than an acid burn...

[Rajiv]

How much does the Average American Make? Breaking Down the U.S. Household Income Numbers.

It's all about wealth disparity . . . .

How much does the Average American Make? Breaking Down the U.S. Household Income Numbers.

How much does the typical American family make? This question is probably one of the most central in figuring out how we can go about fixing our current economic malaise. After all, we don’t hear many people saying in today’s world that they have too much money.

The median household income in the United States is $46,326. Here in California people have a hard time understanding that yes, 50 percent of our population live on $46,000 or less a year. Even today, all the elixirs and remedies being thrown around fail to focus on income and the big brother of income, solid employment. Dual earner households have a higher median income at $67,348.

To highlight the massive discrepancy I’ve put together a chart showing the household income distribution:



As you can see from the above chart, only 17.8% of all U.S. households make more than $118,200 a year. Only 2.67% make more than $200,000. The fact that only 34% make more than $65,000 is astounding given how expensive other cost of living items have gotten over the past decade. That is why the middle class is feeling squeezed from all different sides.

When I put together a budget for a family making $100,000 I received a bit of feedback on both sides. Even though I realized very few people had household incomes in the 6 figure range looking very closely at the data, I can understand why people took issue with a budget that was at that level. I also put together a budget from someone living in California making $46,000 a year and received feedback as well. I think when it comes to income, you can never have too much.

What is even more fascinating, is how even amongst the super wealthy income is not distributed evenly. There are approximately 146,000 (0.1%) households with incomes exceeding $1,500,000 a year. Even at that, the top 0.01% of households had incomes of $5,500,000 and accounted for 11,000 households. The 400 highest tax payers in the nation brought in a stunning $87,000,000 a year. Now that is wealth.

For us mere mortals, it is important again to focus on that chart. $46,000 does not go a long way. In a recent Census report there are 110,000,000 households in the United States. What this data tells us is that 55,000,000 households are living on $46,000 or less a year. Let us assume this is a married couple with 1 child. Let us run the numbers:



I ran the numbers for a state with no state income taxes, Texas. A family at this level is only bringing in $3,215 a month. The national median home price peaked around $200,000. So let us assume this family purchased the median home:

5% down payment: $10,000

Mortgage 30-year fixed (6.5%): $1,200

Taxes and Insurance: $333

PITI: $1,533

Right off the bat, this family is spending 47% of their net pay on a median priced home. We didn’t even account for any pre-tax retirement account investing. Given the recent stock market performance and the loss of $50 trillion in global wealth, maybe that wasn’t such a bad idea. The bottom line is the average American family is being squeezed from every angle. What we need is a focus on jobs and our economy, not bailing out banks. That defeats the entire purpose. The average American family is struggling getting by and when they hear about these billion dollar handouts, they can’t help but to feel left out.