Over the past 20-30 years, what changes have occurred that now make it necessary for many households to have two incomes to stay afloat?
In: Economics
In capitalism, everyone is competing to get ahead. If someone can do the same job for less money, they will outcompete the people who need more money to do that job. Similarly, if someone can afford to pay more for a product, the seller of that product will raise the price of that product to collect as much profit as possible.
In the mid-20th century, women began entering the workforce more and more. Initially, those 2-income households were able to enjoy a higher standard of living. But because capitalist markets are competitive over limited resources, as more and more households started collecting 2 incomes in the late 1960s and early 1970s, the prices of everything started to rise to capture that additional spending power. Then, instead of 2-income households enjoying a higher living standard, the living standards of 1-income households started to drop as their household incomes fell behind the inflation rate.
So, what was once an advantage became the “new normal,” and everything adjusted around it, to make it necessary even just for survival.
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