What has changed in the last 20-30 years so that it now takes two incomes to maintain a household?
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Does the standard of living also factor in somewhat? In the 70s it seems that the houses you speak of were 1,000 sq ft simple homes, I don’t see anything similar being built nowadays which has to factor in to housing costs rising vs wages. Did we decide we needed bigger and better despite our wages?
Those single income households were limited to roughly 1950-1970, in the American middle class and never actually applied to anyone outside that narrow cultural range.
Women have always ‘worked from home’ as well as inside the home to bring in extra money for the household.
My grandmother did the accounting, taxes and payroll for grandpa’s construction company, taught piano, kept up the family’s social contacts in the community, cooked, cleaned and raised four kids as a stay at home middle class mom on call 24/7 in the 1950s-60s.
If she’d been paid at market rates for all that work plus overtime she’d have been making a hell of a lot of money. This was her ‘free labour’ contribution to the family. If I was doing all that for pay today I’d be pulling in six figures a year.
Historically, paid work was usually spinning thread, weaving, sewing and washing from other families with money to pay someone else to do it, they also made and remade their own and their kid’s clothes and did it all without machinery or electricity.
Having space for a veggie garden was also considered an advantage. Food was more expensive back then than we’ve ever seen in our lifetimes. One of my grandfathers was the fourth of thirteen kids, every time his mother got pregnant again they’d add a row of cabbage and potatoes to the veggie garden. Sell or trade the extra to help pay the doctor for the birthing.
(1) more like 50-60 years.
(2) there’s a feedback loop: the more 2-income earners, the more the market reacts as if every family has two incomes, making it harder to live on one income. The target market has changed.
(3) you see this with housing sizes — your grandparents were probably happy in a 1300 sq foot home. But, there aren’t many of those around any more (and, those that are were built when your grandparents were buying houses.). They aren’t being built anymore because the housing market is now calibrated to two-income households.
Post WW2, the rest of the world was busy trying to rebuild their countries and many of them had to pay America back (see: lend lease program) for the military equipment America sent to Europe during WW2. So we got to double-dip, we were undamaged so we had the only industry in the world, we got to profit by helping Europe rebuild their cities, and we got paid back for billions of dollars of equipment we sent to Europe. For a 5 year old, America was the only country going to school for an education while earning money – everyone else was at home sick.
All of this combined to make an almost perfect situation for America’s economy to explode, which resulted in the value of the American dollar being worth a lot more than it is now.
America also became “suburbanized” and started to spread out from city centers, due to the ubiquitousness of the car. This allowed homes to be built much more cheaply and very rapidly, on land that cost a whole lot less too.
There are many more factors, but those two were the big contributors to creating a situation where we only needed one wage earner to support a typical family.
There is a perception today that this is no longer the case, which is not true. You can still support a traditional family on a single income, you just can’t do it with the wide variety of jobs like you could back in post-WW2 era.
Well, honestly, more two income households existing relative to one-income households, which puts more pressure on rent and property values. Without that greater overall purchasing power, those renting and selling would not be able to command the prices that they do now. Think about what happened to gasoline prices during the Covid pandemic: without all those ready gas buyers, prices declined. Only this is in reverse.
Generally speaking 20-30 years ago it took 2 incomes to maintain a household. Things were transitioning to a 2 income household in the 70s. 50-70 years ago, things were different. Back in the 50s and 60s, cost structures were different. Clothes were much more expensive, adjusted for inflation. Food was more expensive too. But housing was a smaller part of the budget… Because people couldn’t afford to pay as much. There were also fewer spending pressures on people back then as compared to now. Also, look at what the homes that were being built back then we’re compared to today. Today, new development is concentrated at the high end of the market. Back then it was not.
On housing:
There is a lot less new housing from year to year now than there used to be, so if you’re moving, you are competing against 2 income households for scarce housing. In the past, this was somewhat flipped with more housing.
There are also a lot more companies involved and a lot more pricing efficiencies happening. These days, renters know very well what they can charge to rent a place for. In the past there was less knowledge of this information as the algorithms and software didn’t exist.
On inflation:
Inflation is normal. Historically we are at a pretty high point, but we just had a period of about 30 years with unprecedentedly low inflation. Believe it or not, wages on the low end have outpaced those on the high end recently… This is due to:
Labor:
In the past, we always had enough labor. Now we don’t. This is driving up wages on the low end for unskilled work, and it is also making it harder to come by skilled employees. There is a generational shift right now – boomers have been leaving the labor force as they age and gen X is a much smaller cohort, so we are trying to replace 80 boomers with 60 gen X people. This has reprocussions through the entire economy.
Pandemic:
Supply chain disruptions are still happening today. A lot of positions are going unfilled due to retirements. While the primary effects of the pandemic have gone, the secondary effects remain.
Development:
The US has willingly developed itself in a way that is incredibly difficult for most people to get by without a car. Cars are a pretty big expense. In a lot of areas, to have 2 incomes, you need two cars, too. People are pushed further and further from where their good jobs are because they can’t afford to be closer.
So first off the idea that a household could live off a single salary is kind of false, this was reserved for the upper-middle class, and was more of a thing between the 60s and 90s, since the 90’s the rate of single-income households has remained steady: https://wtfhappenedin1971home.files.wordpress.com/2021/12/dual-income-1.jpg
You’ll see most answers here saying that wages haven’t kept up with inflation and that the rich/corporations getting all the benefits from increased productivity since. This is incorrect, and not the explanation to your question. [Wages stopped outpacing inflation in the 60’s, but has remained steady since](https://www.pewresearch.org/short-reads/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/). Inflation hasn’t outpaced wages, so that is not the explanation for why it now takes two incomes for a household.
So all-else-equal we’d have just as many households being able to live off a single income as we did in the 60’s. What has changed since the 60’s that makes it not all-else-equal though?
1. Urbanization. Everybody wants to live in the big cities now. As such that’s where all the interesting jobs end up being located, and as such that’s where everybody needs to move to to be able to get an interesting job. It’s a vicious cycle that causes land value to spike in the bigger cities and increases the cost of living there by a lot. There are many very cheap places you can live in the US, it’s just that nobody wants to live there.
2. Increased expected living standards. Today we all walk around with a supercomputer in our pocket that we expect to replace every couple of years with a brand new one. Our TV is 4K 120hz 65″ screen with 10-bit color, as opposed to a small thick black and white one. Our cars are able to go through stringent safety testing and emission testing. Our food passes a bunch of extra safety regulations. Compared to 1960’s pretty much everything we consume today is of better quality at the same price, or same quality at a cheaper price. This is where a lot of wages-vs-inflation and increased productivity has gone into. When we measure inflation we constantly upgrade the products we measure it on, which makes it incorrectly seem that the average worker isn’t getting it better when their wages are just matching inflation. If we would be ok with the living standards of 1960 then many households would be fine on a single income.
3. Globalization. Production in Japan, Korea and later China was incredibly cheap. We were able to import goods for very little. As we did though we helped kickstart and boost an economy in these places that now have made their GDP/c and living standards increase by a lot. As such they now expect higher wages and we’re now unable to import goods as cheaply.
People are quoting real wages dropping, [but that’s not true.](https://www.obserwatorfinansowy.pl/wp-content/uploads/2022/06/Figure-2.png)
Two wage earners meant more money, which meant buying more stuff. This trend started in the second half of the 80s and came to fruition in the 1990s.
People today want more goods and services than what we had 40-75 years ago. Two cars totaling over $75k in value, a 2500 Sq foot home with central AC and a bedroom for each kid plus a spare, large yard, a fridge stocked with fresh produce, multiple streaming services, cable TV with multiple HD boxes, TV in every bedroom, tablet + cell phone for every kid, a PS5, and each kid is in 2-3 different sports that cost over $500 each when you include equipment. Oh, and with two wage earners don’t forget babysitting costs, and because everyone is running around so often we eat from restaurants more.
Your grandparents and great grandparents didn’t grow up with this stuff. They lived in a house half as big, no central AC, shared a bedroom with two siblings, their parents had one car worth under $10k, and they had one black and white TV. They ate cheap canned goods that were plentiful in the post-WWII manufacturing economy. They weren’t signed up for sports, they went outside and organized pickup games with their friends using a broomstick and a tennis ball. When they needed someone to watch the kids, grandma was around because she never had a career in the first place.
Look at the difference between the house in the set of *Three’s Company* and *Modern Family.* The latter lives a more luxurious life than the Huxtables in *The Cosby Show*, and they’re doctors. It perfectly illustrates the perception shift of “middle class.” The 12 year old version of your grandparents would think those people were filthy rich.
That didn’t happen in the last 20-30 years…it happened 40-50 years ago.
By the 1980s, dual-income families with both parents working was prevalent.
The notion that I keep seeing on reddit that “before 1990, a high school graduate could support a family on a single income” is nostalgic bullshit.
How is the political attack on organized labor not the top comment? YOUR WAGE IS SOCIALLY DETERMINED AND YOU ARE LOSING BECAUSE YOU DO NOT HAVE POWER! ORGANIZE!!!!
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