Two-Income Trap…

This talk by Elizabeth Warren is an excellent overview, done in March of 2007, of what has happened to the American Middle Class.  She follows the development of the changes in middle class american from WWII, up until 2007.

It’s especially pertinent because the “progress” we thought we were making had some subtle traps that created rather unexpected results.  This youtube presentation, through the Univ of Calif channel, starts off a bit slow with intro but after the first 4 min, it quickly kicks into high gear.

Warren’s research into the causes of bankruptcy shoots down many commonly held beliefs and shows how we are especially vulnerable.  Note that this talk was done BEFORE the economic stresses of 2008.

Her contention that adding the 2nd income triggers unexpected fixed costs (example: moves you into a higher tax bracket), leaves you less resilient (i.e. fewer options) to deal with changes that WILL happen in your life. I would suggest that there were even more repercussions, significant ones, than she brings up.  But first, take a look at what Warren has to say… map out an hour to watch this!

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