Read any good books on BK lately?

[mothersvox]

I just got back from the (used) bookstore where I picked up a copy a book called The Two-income Trap: Why Middle-Class Mothers and Fathers Are Going Broke by Elizabeth Warren and Amela Tyagi. Probably shouldn't have spent the money on it, ;-) but wow, it's really amazing. The authors worked on a research project called The Consumer Bankruptcy Project 2001 to investigate what leads middle class people to bankruptcy. The book is stunning. There is a section on what BK can do to kids that was really heartwrenching. When I finish reading it I'll post a more detailed summary if people are interested . . .

[HRx]

I used Elizabeth Warren as one of my sources for a research paper I wrote on Middle Income Debt. Definately share some of the information you learned from this book. It'd be interesting to read about some of Warren's positions regarding this phenomenon.

-Todd

[FloridaGirl]

The Two-Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke

Maybe they are going broke because they are out spending money on books meant to tell them why they are going broke. Lol.

[mothersvox]

I used Elizabeth Warren as one of my sources for a research paper I wrote on Middle Income Debt. Definately share some of the information you learned from this book. It'd be interesting to read about some of Warren's positions regarding this phenomenon.

-Todd

According to Warren, middle class families are going broke because:

1) the necessity of having two incomes to support the family doubles the chances of falling into a economic bind. With the old system of one wage earner (the former "family wage" typically paid to men), if a man lost his job or fell ill, the wife could temporarily enter the labor force to help until he was re-employed. Now if either partner loses their job, there is no one to pick up the slack. The two-income family is twice as vulnerable to economic calamity as the one-income family if both incomes are required for necessary living expenses.

2) costs for housing, education, and medical care have far outpaced the rate of inflation.

3) families that are trying to find good public schools cluster in particular neighborhoods, driving up the real estate prices in these areas. In order to secure a good education, one has to either pay for private school or move to a wealthier suburb where one is essentially paying for better schools with a higher mortgage and property taxes

4) wages have not increased in tandem with these costs (in fact, average wages are still below what they were in 1972)

5) her data show that American families actually spend less today on food, clothing, recreation, and all other "disposable income" categories than they did a generation ago. (In other words, we're not going broke from buying designer handbags--or used books, for that matter. ;)