Two-Income Households and Lifestyle
One common refrain in the comments section of yesterday’s income inequality post is that much of the lifestyle gain made by Americans in the past thirty years is a result of dual-income families. Whilst a man could earn enough to support his family in a middle class lifestyle in those days, they argue, that’s no longer the case.
I’m not sure this is true in any meaningful sense. Most want two incomes because they want to live a 2010 lifestyle; they could maintain a 1978 lifestyle on one income.
Beyond that, the reasons for two income families were mostly social and political rather than economic. Indeed, the explosion came during the boom times of the 1980s and 1990s.
But, once it became acceptable for married women who didn’t “have to” to take jobs outside the home, it soon became a stigma not to do so. Being “just a housewife” was not something a bright, educated woman should settle for. And, once “allowed to” became “expected,” the lifestyle expectations shifted because people began comparing themselves to two-income households.
Of course, this changes the supply and demand curve. Most notably, it doubtless contributed to the most recent housing bubble. People could “afford” to mortgage a million dollar home because they had two incomes and this drove up prices, making it harder for single-earner families to keep up.