Valuing Families and Our Nation's Future: The Joys and Economic Penalties of Parenting
Muhammad, Dedrick, The Crisis
As parents (one of us with a newborn and the other with three children), we have both experienced the wonder and joys of raising children. As economic analysts who focus on racial inequality, we both also see the increasing economic challenges facing families who are rearing the future of our country. Economic insecurity is rapidly becoming the norm for many American households. A trifecta of rapidly increasing costs, near-stagnant wages and the contemporary call to weaken government investments in our nation's families poses a serious challenge to our nation's future as well as threatens to exacerbate the inequalities that divide our nation.
Harvard Law School Professor Elizabeth Warren, in her analysis on the vanishing middle class, highlights how transportation, mortgages, child care and health insurance have all increased at a much faster rate than workers' earnings over the last few decades. American families have been dealing with these increased costs in three primary ways: moving from a single-income to a dual-income household, increasing the use of debt, and saving less. Rising levels of debt and declining savings make for an increasingly unstable American middle class, and Warren notes that even the transition from a single-income to a dualincome household still leaves the average family with less money to save and invest than it had 30 years ago. Asa result, a heavy debt anchor and bankruptcy have become far too common for low-to moderate-income families.
The loss of wealth for most families raising children is increasingly creating a larger wealth divide. Before the Great Recession, a 2007 survey of consumer finance showed a doubling of wealth inequality between couples with children and couples without children. In 1998 the median wealth of couples without children was about $24,000 higher than couples with children. By 2007 this wealth disparity had increased to $50,000, so that couples with children had a third less wealth than their childless counterparts. For women and most minorities, the low wealth tied to child rearing is even more extreme. Single white women raising children have 14 percent of the median wealth (about $8,000) of that of single white men raising children. Single Black and Latino women have a median wealth of zero dollars, and Black and Latino households as a whole have about 5 percent of the wealth of white households.
As the nation rapidly becomes a majority-minority country the interplay between racialized wealth inequality and the growing divide ' between families who are having children (who are also more likely to be minorities) and those who are not are steering the future of the country in an increasingly unstable economic path. …