The Two-Income Trap - Elizabeth Warren [26]
If all state-supported universities were committed to stopping tuition increases, the effects would reverberate throughout the educational system. Many public colleges might rededicate themselves to serving their local communities, dropping out of the arms race for ephemeral national prestige. The pressure would be on private colleges to follow suit, lest the gap between private and public tuitions grow even larger. The upward spiral of tuition and the resulting it’snot-our-fault-everyone-else-is-doing-it mentality would receive a serious thumping.
Colleges and universities are like any other organism in their desire for survival and growth. Their leaders are true believers in the research and scholarly missions of their schools, and their desire for excellence—however it is measured among universities—is genuine. It is no wonder that they can always justify their rising costs and why they need every penny that comes their way—and more. There can always be more research, more athletic fields, more books for the library. To be sure, the issues are complex, and a spending freeze might force some universities to make some very tough choices. In the long run, however, it would refocus public universities on their mission—providing an education for all qualified members of the public, not just those who can come up with ten or twenty thousand dollars each year.
The Family Car
Not all of the extra income brought in by Mom’s paycheck went to that house in the suburbs and preschool and college tuition. A lot of it went to another line item in the family budget, a favorite target of the over-consumption critics—that shiny, oversized, overgadgeted behemoth, the family car.
At first, we thought the family car might just shatter our case against the Over-Consumption Myth. Cars now come jam-packed with automatic gizmos that no one had even dreamed of a generation ago. And cars cost more than ever. The average family now spends an additional $4,000 (inflation adjusted) every year to buy, lease, and maintain the family automobiles.101 In the words of a Toyota salesman quoted in Affluenza, “People’s expectations are much higher. They want amenities—power steering, power brakes as standard, premium sound systems.”102 At last, a big-ticket item that that proves that Americans are indeed indulging themselves with lavish extravagances they can ill afford.
Not so fast. Families spend more, but not because they are upgrading to Corinthian leather and built-in seat warmers. Instead, the typical family with children spent its money on something a bit more prosaic—a second car.103 Once an unheard-of luxury within the middle class, the second car has become a necessity. With Mom in the workforce and the family located ever further from the city’s center, that second car became the only means for running errands, earning a second income, and getting by in the far-flung suburbs. 104
What about the price tag on that second car? An average new car costs more than $22,000 today, compared with less than $16,000 in the late 1970s (inflation adjusted).105 The critics might point a triumphant finger, but they would miss another important fact. Cars last longer than they used to. In the late 1970s, the average car on the road was just five and a half years old. Now the average family is driving a car that is more than eight years old.106 Today’s families pay more for that shiny new vehicle than their parents did, but they hold on to it longer too. In fact, when we analyzed unpublished data from the Bureau of Labor Statistics, we found that the average amount a family of four spends per car (car payments, insurance, maintenance and so forth) is 20 percent less than it was a generation ago.107 For all the griping about those overpriced SUVs, there is little evidence that sunroofs and power windows are sending families to the poorhouse.
Leather interiors may not be responsible for the rise in bankruptcies, but the over-consumption camp