First of all, with two incomes, if one person loses a job, you still have cash coming in. On average, the drop is from 100% of normal cash flow to 50% of normal. With one income it is from from 100% to 0%. Yes, the other spouse can get a job, but that takes time, maybe days, maybe months.
This seems especially true during a bad economy when unemployment is high and people stay unemployed for long periods of time. With a dual-income family, the two often work in different fields. One might get laid off but the other's job is safe. You'll suffer, maybe even have to sell your house or something, but at least you can feed yourself.
Second, I've seen what happens when a spouse doesn't work outside the home for a long time. This happened to a relative of mine a long time ago. She had a short but perfectly fine career as a teacher for a while before getting married, having children, and being a housewife. Eventually she got divorced and found that, after being out of the job market for 20 years, the only job she could get was near minimum wage data entry. (She eventually got a better job, but it took many years as she was basically starting over.) Anyway, the point is I'm skeptical of Warren's reasoning that in a single-income family, the other spouse can just go out and get a job if needed. Over the long term, the single-income situation tends to damage the career path of the spouse who doesn't work outside the home.
> I'm really not following Warren's reasoning here.
First of all, with two incomes, if one person loses a job, you still have cash coming in. On average, the drop is from 100% of normal cash flow to 50% of normal. With one income it is from from 100% to 0%. Yes, the other spouse can get a job, but that takes time, maybe days, maybe months.
The general crux of Warren's argument, is that the fixed costs incurred by the necessity of women working is so large that it basically made household income a zero sum game.
Previously, one person made income Y, and if the breadwinner became unable to work then they made some amount close to or smaller than Y.
Today, two people each make X, and also have to pay childcare and additional commuting or other expenses of Z every day.
Warren's assertion is that overall, today 2X-Z <= Y, because women increased the labor supply so much that wages were suppressed; so that Y for one person eventually became X for two people in a household. Depending on how bad the decline is, X may be a lot worse than a new, untrained wife making less than Y.
I think the idea is with 2 incomes, both partners need to remain employed in order to keep up, since people's expenses usually closely match their income. So if 1 of the 2 loses their job, that 1 of the 2 needs to find new employment to maintain their lives.
In the scenario of 1 working partner, if that 1 person loses their job, you can have 2 people looking for jobs in order to get back to normal.
First of all, with two incomes, if one person loses a job, you still have cash coming in. On average, the drop is from 100% of normal cash flow to 50% of normal. With one income it is from from 100% to 0%. Yes, the other spouse can get a job, but that takes time, maybe days, maybe months.
This seems especially true during a bad economy when unemployment is high and people stay unemployed for long periods of time. With a dual-income family, the two often work in different fields. One might get laid off but the other's job is safe. You'll suffer, maybe even have to sell your house or something, but at least you can feed yourself.
Second, I've seen what happens when a spouse doesn't work outside the home for a long time. This happened to a relative of mine a long time ago. She had a short but perfectly fine career as a teacher for a while before getting married, having children, and being a housewife. Eventually she got divorced and found that, after being out of the job market for 20 years, the only job she could get was near minimum wage data entry. (She eventually got a better job, but it took many years as she was basically starting over.) Anyway, the point is I'm skeptical of Warren's reasoning that in a single-income family, the other spouse can just go out and get a job if needed. Over the long term, the single-income situation tends to damage the career path of the spouse who doesn't work outside the home.