Second income provides security even when it just covers day care costs |

Second income provides security even when it just covers day care costs

Pay attention class. Remember the “x” and “y” axes you used in economics• Don’t worry, I’ll keep it simple. My contention today is that you could graph “financial security” along one axis and “staying home to raise children” along the other and find that the more hours (or years) spent at home, the less financial security you have.

Perhaps it’s a self-evident contention to some of you. But I would also argue that nothing is quite so self-evident as when it happens to you personally. Isn’t there a saying about experience being the best teacher?

My experience is that I have tried to stay at home with my children, working a part-time schedule as a freelance writer, and this economy — which experts tell us is in no way, no how, a recession — has twice left my family in financial trouble when my husband lost his job. He was laid off once, and his company was purchased once.

So I am here to say, as the amateur economist I claimed to be in a past column, that even if a second income is only a break-even proposition for a family, there is a hidden benefit in financial security. Said another way, even if the wife’s income only just covers the child care expense — and in most cases, it’s the wife’s income that undergoes such a comparison — it is short-sighted to think she is earning nothing. A steady job still provides more financial security than is apparent when the paycheck just covers the day care bill.

A lot of people don’t know that. Today, I overheard two men talking about their wives’ employment. One man, a father of five girls, complained that he was paying a sitter $12 an hour so his wife could earn $12 an hour working for her dad’s company.

“That’s pretty ironic,” his friend replied.

Neither man got the point. A woman’s work can save the family from financial destitution. Hundreds of thousands of Americans have been laid off since 2001 began, with 93,000 jobs lost in August alone. The odds that one of the gentlemen I overheard could become a jobless statistic do not seem to be growing any smaller.

I have to admit, there have been times when I didn’t get the point either. I’ve been discouraged by the meager amount I bring home after child care expenses.

Sure, I read the statistics before I had children, the ones that say a woman who takes “time off” from her career to raise children never replaces her lifetime earnings. My husband and I were prepared to accept that.

What I did not understand and could not foresee was that this business culture of sweeping people’s livelihoods out from underneath them would twice leave us with too little income, living on our savings.

By grace and luck, I was able to re-enter the job market twice to jobs I have loved. My husband was fortunate enough to be able to take a turn at home raising our daughters. We have been blessed.

But I met a lot of people in Pittsburgh when I was reporting on the economic downturn who were also giving up a parent-at-home lifestyle out of the financial necessity brought about by a job loss. The wives of two or three men I met were home-schooling their children. That takes more commitment and patience than I can imagine myself capable of. Yet that precious choice was being wrested from them.

I know there are families who have never had a choice but to earn two salaries. The families like mine who decide that one parent should stay home are fortunate. But we paid off debt, took modest vacations if any, made do with old cars and gave up other luxuries to commit our time to our kids. It’s not easy.

At the same time — and here the amateur economist in me speaks up again — I feel the time spent with our kids results in diminishing marginal returns. We are not investing financially in their futures. We have not started saving for college.

I was going to say there’s no one to blame. But I do blame the business culture that values people so little. Our society did not used to be like this. Talk about productivity and flexible costs all you want, I don’t think today’s slash-the-payroll mentality is an improvement.

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