Starting a family is riskier than it used to be. Increasingly, rather than providing insurance against economic difficulties, the family is the source of the problems. As Jacob Hacker says in this commentary from the Los Angeles Times, "The family used to be a refuge from risk. Today, it is the epicenter of risk. And, increasingly, families are a source of risk as well":
Till Debt Do Us Part?, by Jacob S. Hacker, Commentary, LA Times: ...It may seem unromantic, but marriage has always been a vital economic institution as well as a social one. A marriage is, among many things, a contract to secure the welfare of an economic unit that, in most cases, includes children. The tale of the last generation is how the value of that contract has declined, while its costs and risks have increased — and how the vaunted nuclear family has suffered as a result.
Consider personal bankruptcy... In 2001, married people with kids were twice as likely to file for bankruptcy as single adults or childless couples. ... Families also were more likely to lose their homes than were married couples without children or than single adults — during an era in which foreclosure rates have skyrocketed. They also were much more likely to be behind on their credit card bills. And they were drowning in debt, with ... a level of debt not seen among any other household type.
Clearly, something is financially amiss with the once rock-solid American family. But what? Why hasn't the rising number of two-earner families protected more Americans from the risks of financial disaster? The answer lies ultimately in a simple fact:
To most families, a second income is not a luxury but a necessity in a transformed economy. ... The difficulty of balancing work and family has increased. And the costs of housing, education, healthcare and child care have exploded.
It is families that have born the brunt of these economic changes, and families that falter when ... the strain proves too much. The family used to be a refuge from risk. Today, it is the epicenter of risk. And, increasingly, families are a source of risk as well.
Because it takes more work and more income to maintain a middle-class standard of living, financial shocks are more threatening for families. What happens when a woman leaves the workforce to have children? What happens when a child is chronically ill? What happens when a spouse loses his or her job? And what happens when families fall apart?
We are not used to thinking of children as an economic liability, but the facts are clear... Fully one-quarter of "poverty spells" — periods in which family income drops below the federal poverty line — begin with the birth of a child.
Spouses, of course, do not equally share the investment of time and money that raising children entails. Women still mostly care for the child — and bear the greatest cost. Their careers are most likely to be disrupted by family events. If they work, their jobs are most likely to be low-paying and with poor benefits. And they are most disadvantaged when families fall apart. ...[T]he financial effects of divorce on families — and especially on women — can ... be devastating. In a two-earner world, parents raising kids mostly or entirely on their own face truly dire circumstances.
What's more, women who work longer hours are more likely to divorce than women who work fewer hours or don't have a job. This is a new — and striking — development: In the 1960s and 1970s, two-earner couples and one-earner couples were about equally likely to break up. ...
Strong families are the backbone of strong societies. ... Yet U.S. families have been left to manage these risks without any of the common supports working families abroad enjoy — such as paid leave to have a child. Among 14 rich Western democracies, the United States ranks dead last in supporting mothers with children 6 or younger. More than 160 nations in the world offer paid family leave. Although a few states in the U.S. offer paid disability leave, the country as a whole does not... Americans ... shouldn't have to choose between economic security and getting married and having kids.
If we are going to demand that workers remain flexible in the face of a global economy, ready to change jobs at the drop of an outsourced or digitized hat, if we accept that firms have no choice but to shed health and retirement packages in order to stay competitive, if we believe that education is a key factor in success, and if we believe that government has an obligation to help firms, workers, and their families balance competing social, economic, and familial obligations, then we need to do much more to help workers and their families reach their potential. Workers need more help with childcare, we need to provide portable retirement and health insurance, more help with education expenses, more help for workers displaced by technology, globalization, and changes in tastes. We need to implement these and other policies that make it possible for workers to fully participate in the economy, meet their obligations, and respond to changes without unduly endangering their families health and welfare. Optimally, families are a source of comfort, not anxiety, and there is plenty of room for us to improve the situation for workers trying to balance all of the competing demands they face on a daily basis.