In 1920 just 9% of households had two working spouses.
Do families need two incomes in the 21st century? Most likely they do and that’s because we created a society of consumption and stuff.
If families in the 1920s, 30s, 40s and 50s didn’t need two incomes to meet their needs, why do families need two incomes in 2021?
The answer may be in the marginal propensity to consume. To put it simply, the more one earns the more one spends and accumulates more stuff.
Since the 1920s the average home has grown by over 1,000 square feet. The average number of people in a household in 1920 was 4.34. Today it is 3.15.
How many televisions in your home, how many electronic devices, what do you pay for cable, internet, streaming services, how many cars -technically vehicles- in your household? Are those vehicles to provide basic transportation? Not likely.
How much did you spend on vacations? How many baths and bedrooms in your home; I bet there is a family room or finished basement. How many of the latest toy or games do your kids have? Do the kids attend pre-K?
How much does your family spend overall on non-necessities in a year? I should ask how much do you save for an emergency and for retirement, but why bother I already know – not enough – because all the stuff usually comes first; the new necessities that is.
To keep up, indeed to have what we now define as basic needs, two incomes are a virtual necessity for most Americans. For those Americans at the lower end of the economic scale two incomes are necessary for most of their spending because demand has driven up prices over the decades.
Living paycheck to paycheck includes all the stuff we have and consume – way beyond our basic needs.
Regular readers will know I am big on consequences, especially unintended consequences. Here area few in this case:
- At least a part-time time job is a necessity for most women
- We need (or want) pre-school and childcare to help raise our children
- We need government tax credits and cash payments to afford our children
- We need paid leave to initially care for our children
- We spend so much on the new necessities and beyond, we are not planning for financial emergencies or our financial future