The Economy of the American Family

May 14, 2008

From time to time, one of my daughters sends me a priceless link. A recent example is this lecture on the changing economy of the American middle-class family. You’ll need about an hour to hear the whole lecture. Believe me, it is worth every minute. The lecturer is not a polished speaker. She is not an extremist nor an alarmist. But her message is alarming. (The main speaker begins about five minutes into the video)

She compares the typical middle class American family (Mom, Dad, two kids) in 1970 to the same type of family in 2005. In 1970, the typical family had one income (Mom stayed home with the kids). If someone had told us in 1970 that by 2005, most families would have two incomes, that women would have made huge advances in education, job opportunities, and salary, we would have expected these families to be affluent, well adjusted, and well prepared for retirement. Boy, would we have been wrong.

In 1970, our typical one-income family saved almost 11% of their gross income, and had very little debt other than home mortage and payments on the single family car. By 2005, our study family had two incomes, a negative savings rate (spending more than they were earning), and $7000 in credit card debt. Not only were they spending the entire second income, but also all the money their parents had been saving, and all the money they had borrowed. And they were continuing to borrow more.

So what were they spending all that money on? Not primarily on essentials like food and clothes. Instead, they were buying a second car (since Mom has to drive to work!) They were paying for child care (their parents never dreamed of that). They were paying for preschool (again, something their parents did not do). They made great effort, at a premium price, to buy a nice house in a “good” school district (not so much of an issue with their parents). The two-income lifestyle was leaving them more financially strapped than their parents’ one-income lifestyle.

Today, the typical family cannot pay their bills without two incomes. That means they have twice the risk of not being able to pay the bills compared to their parents (since there are two workers at risk rather than just one). Sickness, downsizing, injury from a car wreck, a divorce… and suddenly the family is at risk of bankruptcy. In America today, believe it or not, bankruptcy happens even more frequently than divorce. In contrast, the one-income family has a safety net in the form of a second potential worker in the case of an emergency.

Our American churches are no different from our neighbors in these matters. So, for the two-income families among us, are you as debt-free as your parents were? How is that retirement nest egg? Are you always on time with all your bill payments? Do you have some money left over that you can use to help others? How is the two income thing working out for you?

It is very tough to get out of the two-income addiction cycle once you are in it. Dave Ramsey has helped many couples get out of debt, and I recommend his program. For those who are not yet married, or who are early enough in a marriage to still have a chance, I strongly suggest making a commitment to budget to live on a single income. Churches should be teaching these things in premarital counseling. And church leaders should be setting the example by living that way themselves.

Jay Guin has a recent post touching on another aspect of this problem. The busy lives of people in our churches are stifling the work of the church. Two careers, household management, kids booked in every conceivable after-school activity… The fruit is being choked out by thorns. This is a spiritual issue that threatens the future of the church. Will we have the conviction to address it?


  1. Things have changed. How do we work with this change and remain relevant as a force in the lives of those in our culture. I see the biggest problem for us to overcome is convincing this society that we have a gospel that remains relevant to them.

  2. Hi Dell,I agree, but would add that we must not discard biblical values in order to be “relevant.” To change the world we have to be different from the world. To change a person’s life, we have to call them to something different from what they already are. We are to be in the world, but not of the world.

  3. I just started up my german christian unity project. I really dream of one church as the one body of christ.I am happy that I found your blog. So I can see, there are more visionaries in this world.

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