A Living Wage

A couple of unrelated trends clicked together in my brain this afternoon in an unexpected way and I thought I’d share. In case it needs to be said, this is interesting but wild speculation and not meant to be taken very seriously.

One trend is the gradual dissolution of the nuclear family over the last several decades. Another is the more recent economic anxiety in the era of Brexit and Trump. And finally, we have a push from liberals in the last twenty years to raise the minimum wage to what is known as the “living wage“.

As a single adult with no dependants who keeps a comprehensive budget of my finances, I know both what I spend each month, and roughly what it would be possible to live on if times suddenly became tight for me. Interestingly, a full-time job at the minimum wage where I live would be more than enough for a pretty decent single life, since until recently I was living below that line more-or-less by accident. However, it’s also clearly not enough for a family, nor even necessarily enough for a family with two income-earners at that level given the costs of transportation and child-care.

My core speculation is as follows: what if the gradual dissolution of the nuclear family has increased the “supply” of single workers and decreased the “supply” of workers with families, thus driving down the market price for labour and making it even more difficult to have a family. This would be a very unfortunate negative feedback loop, if true.

Maybe somebody with more economic/demographic expertise can dig into this more or tell me where I’m making an obvious error?

2 thoughts on “A Living Wage

  1. Wages have not gone down so this seems unlikely to be something that’s having a big effect. My general explanation for the economic anxiety we see today is that people feeling’s about how their society is doing respond more to how fast it’s getting better than its actual level of wealth, and maintaining high, post-crisis levels of growth is almost impossible. For family formation specifically there’s also the factor that’s we’ve radically increased our standards for what king of childcare is acceptable; leaving four-year-olds alone to wander the neighbourhood used to be perfectly acceptable.

  2. The key phrase to find more discussion about this is “family wages”. Discussion around family wages was supplanted by discussions around minimum wages by the turn of the century, and I think this “new” call for living wages is an unfortunate example of how when people don’t know their history, they don’t shoot high enough when pushing back against capitalism.

    Warren’s pretty well-known 2003 book “the two-income trap” actually talks about something quite similar to what you’re suggesting; the basic theory is that the doubling of the labour pool in the late 20th century let employers substiture two smaller individuals wages for one larger family wage, essentially getting two workers for the price of one. And that, coupled with rising housing costs, drove a lot of Americans into precarious living situations.

    So I wouldn’t really call this a new phenomenon, but you’re right in that further atomization is probably making this worse.

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