Sunday, September 25, 2011

Adam Smith and Two-Income Families

Now and then you read something which catches the imagination.

When Adam Smith wrote The Wealth of Nations, he noted that although the wages of the lowest classes were oftentimes determined by the lowest their employers could pay, humankind's present population acknowledges that at large, even with an imbalance of wealth, employers could not sustainably pay their workers less than would maintain a family of four (Book I, chapter VIII).  If employers were to seek to pay less, then populations would shrink until competition over labor would force the wages of even the lowest classes higher.  And since the population of the world is now greater than in past years, especially considering that Western societies are generally monogamous in terms of marital structure, then the poorest working classes must have been able, even without minimum wage regulations, to afford families of five and greater.  If this was not the case, then wealthy families would have been primarily responsible for the present population -- a highly unlikely scenario, considering even Smith acknowledged that wealthier women were less inclined toward childbearing.

Adam Smith, eh?  So Henry Ford read his book.


In any case, another source seems to confirm Smith's theory.


The U.S. Census Bureau confirms this hypothesis with its 2010 study on household income demographics.  The lowest classes, those most likely to be touted by left-wing organizations as oppressed, are the least likely to be dual-income families, while those in wealthier middle-class categories are a minimum of close to four times more likely to have dual incomes.  Compared with the bracket with the highest percentage of dual income households, the lowest quintile is somewhere around eleven times less likely to have a second income.  If this is the case, then poverty and the number of incomes are absolutely correlated.

The author of the linked article goes on to compress all of the old Rockford Institute's work (Allen Carlson, not the current occupants) into a few grafs.

He's right, you know.

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