This Fight is Our Fight: The Battle to Save Working People. Elizabeth Warren
helped. As more women took jobs, family incomes went up, and the family-income curve kept rising from the 1970s until the early 2000s. More family members drawing paychecks meant the family made more money overall.
But this new solution came with its own problems. First, many families don’t have two people who can go to work. A lot of couples can pull in two incomes, but plenty of them can’t. And America has lots of singles—single moms, single dads, singles on their own—and they are flat out of luck. Nicole would love to have someone else in her life who could help pay the rent and raise her baby, but that someone took off a long time ago—and she’s got to build some security right now.
And that’s one more double bind: Nicole and every other single person trying to make it face the same rising expenses that couples face. They struggle with more expensive health care, more expensive housing, more expensive education—the same costs that led other households to send both Dad and Mom to work—but they can’t send more than one person to work. Instead, they have only one paycheck to keep them afloat.
Even two-income families began to struggle. There were new costs for childcare, transportation, and work clothes. There was more eating out and less mending. That second paycheck wasn’t all gravy. On average, full-time care for kids under four now costs more than in-state college tuition.
With everyone in the workforce, new risks began creeping in at the edges. My stay-at-home mom hadn’t planned it that way, but when trouble hit, she was our family’s safety net. After Daddy had a heart attack, she went to work and brought home a paycheck. No, it wasn’t a big paycheck, but it was a new paycheck. Today all those single parents flying solo and couples with both partners already working don’t have someone new to send to work if there’s a crisis. So if the baby gets sick or Grandma falls and breaks her hip, someone has to stay home—and that will cost the family money. And if one of the wage earners becomes seriously ill or is laid off, there’s no additional partner to earn a new paycheck. The risks are high, and the safety net has disappeared.
Back in the early 1970s, when the typical family was earning just one income, they were able to put away about 11 percent of their take-home pay in savings. They also had only a sliver of credit card debt—less than 1 percent of their disposable income. But the income/expenses squeeze today means that families have cut their savings by two-thirds while their debt has multiplied a shocking fifteen times.
Now when something goes wrong, they have no savings to fall back on and they are already loaded with debt. (This was the story I told in The Two-Income Trap, a book I wrote in 2003 with my daughter, Amelia Tyagi.) Suddenly, when anything goes wrong, all those good, hardworking, solidly middle-class families are tumbling over a cliff.
Gina and Darren fell off that cliff. When both of them had good jobs, they bought a home and then poured every nickel, including their savings and retirement accounts, into keeping it. When Darren couldn’t get work or when Gina got sick, it hit their budget like a grenade. And they never had a way to pick up the slack—when they needed extra cash, there was no one else to send out into the workplace. For years they’ve been working harder and harder, but sometimes she lets out a deep sigh. “The longer I work here,” she says, “the farther behind in the bills we are getting.”
Gina is the modern-day version of my mother: years ago, she stayed home to raise the kids, but now she’s a breadwinner who works long hours for a major retailer. In fact, Gina is better educated and has more work experience than my mom did. Truth be told, she’s also a lot feistier. But unlike my mother, Gina can’t earn enough to put dinner on the table without help from a food pantry. My mom found a way to save us, but the odds are stacked much higher against Gina and her family.
EVEN HARDER
When America’s middle class is under assault, there’s pain everywhere, but much of that pain rains down harder on black and Latino families.
The evidence of this assault is especially clear when it comes to homes. Homes are good indicators of stability: when a family has its own home, the kids can go to the neighborhood school and the parents will usually take time to meet the neighbors and maybe even work together to spruce up the playground. Tiny condos and center-hall colonials, triple-deckers and Cape Cod farmhouses—homes are the tangible sign that a family is living the American dream.
Michael had the dream.
He was ready to tell me his story. Unlike Gina, he said, Sure, use my name—Michael J. Smith. Use my picture, too. I’m out there.
Michael is African American, married, and in his fifties. He’s a big guy, solidly built, with large hands. His smile is soft and almost sweet, and his voice is deep and reassuring; the gentle rhythms of his speech evoke his early years growing up in the South. For decades, Michael has been very involved in his church. More than once, he said to me, “It truly is our faith that keeps us going.”
When Michael’s family moved from Atlanta to the Woodlawn neighborhood of Chicago in the 1960s, his family and church held him close. There were gangs in his neighborhood, but Michael stayed on the path he believed in—God and family—and he never made a big decision without praying on it first.
As Michael tells his story, he warms up to all the good memories. In his twenties, he got a good job, married his high school sweetheart, and had three kids. They divorced, but he remarried soon after, and he and his wife, Janet, have a daughter named Ashley. From the first paycheck he ever took home, Michael started saving to make a down payment on a home. He and Janet bought their first home in Richton Park, a suburb of Chicago. As Michael put it, he always wanted “a neighborhood that was safe, that I could raise my children in, that was fenced in in the front and the back.” He particularly wanted his kids to have a yard to play in.
He kept those dreams front and center. Michael had a good job with DHL delivering packages and loading planes. Sometimes he was called on to do a lot of heavy lifting and there was pressure to get things done quickly, but he describes his time at DHL as “the most satisfying work I’ve ever done.” Janet worked at Chase for twenty-seven years, and she was proud that she had never missed a payment on any bill—ever. They kept right on saving, and after a few years Michael moved his family again, first to Hazel Crest, a predominantly African American suburb, and then to Homewood, which was more diverse.
When Michael spoke to me about the move to Homewood, he said, “We thought that we could do a little better.” But he and Janet didn’t jump right in. “We thought about it, prayed about it, looked at the numbers, and we had more than enough.”
Michael talks about the house he and Janet bought like it’s a beloved child. He tells about the three arches at the front of the house and about the pine trees in the backyard. He also wants me to know about the hedges out front where robins built a nest every spring. “We never clipped the hedges while the robins were there,” he notes. “They like their privacy.”
His conclusion: “We had kind of a great American story.”
Then the crash of 2008 hit and the bottom fell out. In the space of a few months, DHL eliminated 14,900 jobs—including Michael’s.
After sixteen years on the job, he felt like he’d been run over by one of his own trucks. Frantically, he spent the months that followed looking for part-time work wherever he could find it. But no one was hiring, and he quickly understood that he had no chance of getting a full-time job that paid as well as his old one and offered health insurance. By this time, Janet was no longer working at the bank, and Michael’s unemployment checks didn’t cover even their basic expenses. In the blink of an eye, Michael’s whole world had turned upside down.
A lousy mortgage made a bad situation worse. Michael and Janet had started out with a plain-vanilla, fixed-rate thirty-year mortgage. They weren’t in the house