Dual Earner Incomes - Is It Worth The Cost?

A few decades ago it was very rare to find a dual earner income family in the US. And yes, I know that to some readers that will be ancient history, but to me it was yesterday. Then came WWII and Rosie the Riveter and the world has not been the same since. Dual earner incomes have spread throughout the world to the point that the US may or may not be the leader in this practice. Women have entered the formal workplace with its time cards, office politics and all the rest of it for good. When you consider that some 44% of families now have dual wage earners and that much of what is left is composed of either single parents or no earner families (unemployed perhaps, or retired) it is apparent that most people find it advantageous. But is it really worth the cost? Lets look at some of those costs as well as some of the "profits" of an average, two parent family with two children.

The obvious reason for a non-working spouse to take a job is money. That money is a large factor in what is driving our economy now. It has had a significant effect on the standard of living, allowing us to buy more toys (RV, snowmobile), more gadgets (big screen TV, microwaves, cell phones), bigger homes (290 square feet per occupant in 1950 to 893 square feet per occupant in 2006). We take a family cruise to foreign countries instead of packing a tent and heading for the hills for a few days.

So how much money can the second half of the two earner income expect to bring home? Median income for the US (male) is around $45,000. Let’s assume that figure for the primary wage earner regardless of their sex. The second earner is more likely to earn less; although certainly not unheard of, it would be unusual for a second wage to be as high as the primary earner. Let’s assume $35,000 for the second earner. Of that, about 30% will disappear as federal, state and FICA taxes, leaving about $25,000 to take home but of course that’s not the end of it. Daycare expenses average around $650 for an infant/toddler and $500 for a preschool child. If the cost for the two children is $1000 per month that leaves $13,000 to take home. There will be commuting, additional clothing, and other non-reimbursed work expenses. Perhaps a total of $250 per month - that leaves just $10,000 take home pay. When both parents work there is a strong tendency to purchase extra services for the house - both parents have an extra work load and are tired and don’t want to cook every night, don’t want to fix the broken faucet, don’t want to mow the lawn. To eat out three or four times a week and hire some handyman work around the house could very easily come to $300 per month, leaving $6400 take home pay for the year. Now that is a significant figure, but consider that it is only $3.07 per hour! Is the dual earner concept still worth it to have the extra toys and such? Of course, you may fall from the current concept of (gasp!) the middle class.

Money isn’t the ONLY reason to work, though. The dual earner income phenomenon is so common that there is beginning to be some social stigmata against the spouse that stays home. "He just watches TV all day and changes a couple of diapers. Big deal!". Some people do not find being a home maker to be particularly fulfilling - their satisfaction comes from a paycheck or other recognition and accomplishments at the job. For some it may be not so much the money, but that it enables them to "keep up with the Joneses" - the social climber needs the appearance of whatever it is money can give.

At the same time the low hourly return on work is not the only reason NOT to work. It might be possible with a little effort to save nearly as much money as the second earner actually brings in and with less than 40 hours per week of work.

There is little doubt that children suffer from lack of good parental time and instruction in everything from school work to moral and ethical training to religious training. Working parents simply don’t have the time and energy to maintain the good family relationships, both with immediate family and more extended family, that they should, and that includes quality time with each other. More toys from the extra income don’t make up for it and certainly the fancy BMW and 60" TV can’t hold a candle to parents attention and love. In past years parents were often caretakers for their own elderly parents and that is no longer possible, either (although maybe a reason to work!).

A final statistical oddity; our hypothetical dual earner family is 75% more likely to file bankruptcy than is the single earner family. Sounds strange, but consider that people live to their means - the two earner couple saves very little more than the single earner family. All the extra money is spent on toys and fun things to do; that’s mostly what it’s about! At the same time, when there are two earners there is twice the probability that one will lose their job from a layoff, sickness, injury, etc. The one earner family has a major plus in that there is one able and skilled adult that can help fill the void when the income stops or decreases; that second adult is a great safety net.

In the final analysis it is a very personal decision whether or not both spouses should work. Only they can make the decision - only they know their own wants, needs, desires. Only they can recognize whether or not the extra job justifies the costs. A note of caution here, though. Be careful that you don't simply make up a lie about either needing or not needing to work to justify your actions; use your critical thinking skills to their utmost. Don't compromise your own personal integrity, even to yourself, to simply get out of the house or to stay home if you don't really want to work. Hopefully I have given those people trying to decide which way to go a little food for thought, a little extra ammunition for their decision. It is not an easy decision to make and most couples today face the decision at some time in their life.