Will Homemakers Once Again be Left Without a Financial Lifeline?

Jan 24, 2012Suzanne Kahn

There may be a new trend of men becoming homemakers, but they could face the same limitations to credit that women did in the 1950s.

"We may see the Masculine Mystique in 2020." That's the prediction Kathleen Christensen, Program Director at the Alfred P. Sloan Foundation, makes at the end of Bloomberg Businessweek's article on homemaker dads published earlier this month. She suggests that in any arrangement where one person does 100 percent of the housework and the other 100 percent of the work outside the home, someone will get frustrated. Today's homemaker dads may be discovering what mothers in the 1950s knew -- that it can be isolating to be the parent who stays home to do the laundry and take the kids to playdates. But there are other lessons to learn from the experience of homemaker moms in the years of the "feminine mystique." These women were not just frustrated with life in the suburbs. They faced real practical problems that homemaker parents (moms and dads) could end up facing again, like lack of access to credit.

History shows us that it's not just frustration with an unequal distribution of housework that can pose problems. Nancy Folbre's great piece in the New York Times last week highlighted the fact that the spouse at home usually experiences a reduction in future earnings and employability. Other concrete problems can arise as well.

Benefits are often tied to our work or our family members. Thus, if women in the era of the "feminine mystique" lost their husband through divorce, separation, or death, they could suddenly find themselves not only without a partner, but also without access to pension benefits, healthcare, or credit.

Is this still a worry in 2012? Earlier this year, new rules went into effect to regulate the extension of credit. These rules were issued by the Federal Reserve Board in response to the CARD Act of 2009, and many of them are very good for consumers, like limiting the kinds of fees that you can be charged on a credit card. One of them, however, requires credit card companies to evaluate an applicant based on individual, not household, income. This makes it much harder for individual homemakers to get credit.

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Women in the 1960s and 1970s fought to be recognized as individuals instead of simply appendages of their spouses. At the time, creditors refused to give wives credit in their own names, a vestige of the law of coverture, which said a wife's legal personhood was subsumed under her husband when she married. Lenders erased women's credit history when they married and only extended credit to them through their husbands. In addition, when couples applied for loans based on their combined income, lenders routinely insisted that women provide signed statements promising they would not or could not get pregnant before counting their income. Lenders' explanations for these practices rested on the assumption that married women would get pregnant and leave the workforce. They could not be trusted to maintain an income and therefore afford their own credit.

When the Equal Credit Opportunity Act passed in 1974, it banned these practices and other methods of discriminating based on sex and marital status. Women now had to be given credit in their own names if they wanted it. But credit card companies still counted household income when extending credit to women. This meant that women could have credit in their own name while married, even if they chose to commit themselves to raising their children. As a result, the ECOA let women build a credit history that they could draw on to get credit if they lost their husband.

The new law stops lenders from giving homemakers credit. Individuals can only get credit in their own names based on their own income. Not having credit in one's own name can (and did) lead to a host of indignities during a marriage, but it causes real problems when a marriage ends. More often than not, this is the moment when people need credit the most to get back on their feet. But if homemakers have not had credit in their own names for years (even if they have been the partners that balance the checkbooks and pay the bills), they lack the credit history necessary to get a car, an apartment, or a good credit card.

Not being able to get a job upon returning to the labor force is not the only economic ramification of deciding to become a full-time homemaker. The fact that more men are making this decision may be a trend worth supporting, but we need to think about how a whole host of public policies around essential economic benefits support this decision or make it quite a risky one.

Suzanne Kahn is a Roosevelt Institute | Pipeline Fellow and a Ph.D. student in history at Columbia University.

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