I recently read the review of Two Income Trap by Amelia and Elizabeth Warren at Elizabeth's blog and started asking so many questions that she encouraged me to read it for myself. Hubby and I make mostly sensible financial decisions, so I figured there wasn't much the book could offer. I was right and wrong. Right that the book does not offer anything much new in terms of personal finances, wrong that there wasn't much that I could learn. I learned quite a bit and received a fresh perspective on issues affecting two income middle class families.
Now here is where I have to admit my ignorance. I haven't been in the US for that long and there are some things that I don't understand. One is electoral college and the other is school districts. Why is there a rule that only people who live in certain areas can go to certain schools etc.? I was aware that was the case since my niece and nephew are in public schools, but I never understood why. Can someone explain me that? The book explains very well the problems arising from that. People go for better schools for their children, max out their mortgage for buying a ridiculously high priced house in that school district. But why should that be allowed to happen? Why is there a rule prohibiting kids to go to their school of choice? Logically, without knowing anything about the issue, I would think that kids leaving for a better school (if there were no restrictions) would inspire sub standard schools to get their act together. Maybe I am missing something. I would love to know. Also another thing is, the authors keep comparing a current couple with a 70's (I think) couple to show why families are more in danger now. Was there no school district delineation for education then?
Another aspect she talks about is regulating predatory lending. A big hearty Amen to that. It would be great if there are more rules in place so that credit card companies can stop lending to people who are incapable of paying them back. The whole sub-prime crisis is becasue the companies wanted to make money and gave money to people whom they could charge high amounts of interest. "No discrimination for home buying based on money". (Don't even get me started on this screwed up statement) Started interestingly by Jimmy Carter. Followed through by Clinton and Bush administration. Anyone with half a brain could see that, the way the real estate market was going, it was not sustainable.
A third aspect the books talks about is Mom as a safety net. This is what started me on this book. It sounds great in theory. Dad works, couple buys a home based on Dad's income, mom stays home, takes care of children, crisis happen, mom goes to work until dad finds job, mom comes back home to former SAHM life, hunky dory dosy. What is the reality? Why do I disagree? What is the fallacy of the argument? I will explore that in part 2.
4 comments:
"Why is there a rule prohibiting kids to go to the school of their choice?"
Public schools are supported by property taxes. Property taxes are assessed by the town. A town with higher property taxes attracts those people who can afford to pay these taxes. Towns with higher property taxes usually have a higher per-pupil spending rate, which many believe to be an indication of a higher quality education.
There is some room for school choice. Some towns will allow "tuition students" to pay a set amount (usually at least a few thousand dollars) to attend a different school.
In the 1970s, Boston began a system of forced busing where students of different races were forced to attend schools to end de facto segregation. The general sentiment is that the plan backfired: the white families fled to the suburbs and today most of Boston's schools are nearly all African-American.
Now, I attended several different schools: all-female private school, co-ed public school, and a 70% male boarding school. I had good and bad teachers everywhere - leading me to suspect that it is not necessarily/entirely a matter of spending. The quality of the classroom dynamics at the all-female school prompted me to narrow my college choice to women's colleges only. I think I need to blog about boarding school life...some crazy stuff happens in those places, most of which I would not want any child to endure or witness.
"Safety net"
I've never read the book, but I suspect that Mom cannot simply hop into and out of any job. Not only does it do a serious disservice to her employer and co-workers, but I can't imagine it benefits a harried Mom's stress level. Applying for jobs and interviewing (jobs in themselves) and starting a new job is *all* stressful! I'd hate to have to do all that for only a very temporary of employment. I guess an exception would be to seek employment only with a temp agency, but I don't know much about how those agencies work.
Will add to my reading list.
I read this book several years ago and was intrigued by many of the ideas present in this book. I will be looking forward to your analysis.
Allison pretty much summed up the public school issue for you. I'll add that part of the appeal of the more wealthy districts is that there is often a higher class of people there. That sounds snobby, and it kind of is, but let me explain.
Urban schools often have students from poorer families. The parent(s) are struggling just to make a living, the kids often have little after-school supervision, the parents usually aren't highly educated, so they may not be able to help their kids with homework or encourage them to do well in school. That's a broad generalization, but in those schools, the students are often just struggling through life, so there are often issues at school that have to be addressed: greater proportion of discipline problems, lower test scores, etc. Again, it's a broad generalization.
In the wealthy, suburban districts, the parents are often highly educated (they have to be to have the high-paying jobs that afford them houses in these districts). Highly-educated parents stress eduction to their kids, and they do everything they can to make sure their kids succeed academically. They tend to be very involved in their children's schools. These students often have greater opportunities and resources due to the higher tax rate: more arts programs, more computers, well-stocked library, etc.
Thus, the great disparity within public education. Why not set up a more equitable system? Well, they tried that here in Texas. It was nicknamed Robin Hood. The state took property taxes collected from wealthier districts and doled it out to poorer districts. The wealthy districts that were well-known for their fabulous schools started to suffer because their money was being taken away and they were not allowed by law to tax more than $1.50/$100 (or is it $1000?) of property. Several districts banded together to sue, and Robin Hood was eventually deemed unconstitutional.
We love to say that things in the U.S. are equitable, and all children have the same opportunities to succeed, but it's just not true. Those with more money can always buy advantagesi that the poor cannot.
The reasons why the public school system is as it is are pretty well documented in previous comments. Let me just say that there also is a movement in the United States for increased school choice, so that parents who live in lower-income areas have the option to send their children to higher-performing schools. Several things are part of this movement: vouchers that can be used to pay private school tuition, charter schools, even the simple ability of parents to choose any public school in their city rather than being forced to send their kids to the one dictated by their district. It's a controversial idea right now, but one I support.
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