TIME: Almanac 1993/TIME Almanac 1993.iso/time/110890/1108380.000

Text File | 1992-08-28 | 5.5 KB | 111 lines

                                                                                ON THE JOB, Page 54

Running Hard Just to Keep Up


By Sylvia Ann Hewlett

[The author is an economist, whose forthcoming book is When the
Bough Breaks: The Cost of Neglecting Our Children.]


    Faster and faster they go, harder and harder they push, but
like hamsters on a wheel, America's working families are stuck
at the bottom. Clobbered on two fronts, they must work twice as
hard to stay even. On the income side, wages have gone down
while taxes have risen. On the expenditure side, living costs
have soared. Homes, health insurance, college education -- the
basic ingredients of the American Dream -- are increasingly out
of reach.

    The crunch began with a dramatic falloff in earnings,
particularly for blue-collar males. Between 1955 and 1973, the
median wage of men leaped from $15,056 to $24,621. Then, quite
suddenly, it started to drop. By 1987 the male wage, adjusted
for inflation, was back down to $19,859, a 19% decline. To shore
up family income, wives have flooded into the labor market, but
their earning power is low. In 1988 the average family income
was only 6% higher than in 1973, though almost twice as many
wives were at work. In many households, one well-paid smokestack
job with health insurance has been replaced by two service jobs
without benefits. Burger King doesn't provide as well as
Bethlehem Steel.

    Higher taxes have tightened the pinch. The acclaimed Reagan
tax cuts of 1986, which reduced marginal income taxes, merely
shifted the burden to Social Security taxes, which fall heavily
on low- and middle-income families. These payroll taxes were
jacked up 24% during the 1980s. The true marginal tax rate is
now higher for a couple making $14,000 a year than it is for a
couple making $326,000 a year!

    It doesn't help that over the past 25 years the cost of
housing has jumped 56% and college tuitions have rocketed 87.9%
in real dollars. Joseph Minarik, executive director of the
congressional Joint Economic Committee estimates that the
typical 30-year-old man buying a median-priced home in 1973
incurred carrying costs equal to 21% of his income. By 1987 this
had risen to 40%. For the first time since World War II, home
ownership among young families is declining. Complains Karen, a
26-year-old housewife in the Chicago area: "You either buy a
home, both of you work and your kids suffer, or one of you works
and you live in a rental. Paying rent feels like digging a hole
and crawling right in."

    This squeeze on families bodes ill for children. Twelve
million youngsters have no medical coverage; 5 million teeter
on the edge of homelessness. Because of poor prenatal care, a
baby born in the shadow of the White House is now more likely
to die in the first year of life than a baby born in Costa Rica.

    But perhaps the resource in shortest supply to families is
time together. The amount of "total contact time" between
parents and children has dropped 40% over the past 25 years,
says the Family Research Council in Washington. This is not good
news. Researchers have uncovered ominous links between absentee
parents and behavioral problems among children. A 1989 survey
of 5,000 eighth-grade students in Southern California found, for
instance, that latchkey children were twice as likely to use
alcohol and drugs as were children supervised by adults after
school.

    How can this situation be remedied? Corporations should be
encouraged to design a family-friendly workplace that gives
parents the gift of time. Several U.S. firms have shown that it
can be cost-effective to create a more fluid work environment.
Government could encourage this by granting tax breaks to
companies that offer flexible hours, part-time work with
benefits, job sharing, parental leave and home-based employment
opportunities.

    To lighten the burden on working families, the tax system
should be reconfigured so that relatively more is paid in income
taxes and less in Social Security taxes. The government should
also subsidize housing for a majority of young families with
children. Rent vouchers in sufficient numbers would banish the
specter of homelessness that haunts 10 million to 13 million
low-income families. As for helping the middle class, the
government should act as it did after World War II and offer
low-interest mortgages to young families. Beginning in 1944, the
Veterans Administration guaranteed 5 million home loans to
ex-servicemen with no down payment required and a maximum
interest rate of 4%. If something similar were done today, many
more families could both buy a house and spend time with the
kids. One Gallup poll shows that only 13% of working mothers
want to work full time, although 52% of them do so. Often what
keeps these mothers at work 40 hours a week is heavy mortgage
payments.

    The U.S. can and should bend its public policies to free
time and resources for families with children. With male wages
sagging and the divorce rate at 50%, it's hard to spin out a
scenario in which large numbers of women have the option of
staying home full time. The trick is to spread the burden
around. Employers and government both have to pull their weight.
This critical task of building strong families can no longer be
defined as a private endeavor, least of all a private female
endeavor. No society can afford to forget that on the backs of
its children ride the future prosperity and integrity of the
nation.