by Ryan McMaken
Mises.org
In the current political climate, we hear again and again that the key to lessening the prevalence and effects of poverty is to raise nominal incomes. We hear it repeatedly in calls for a “living wage” and calls for a minimum wage. It is further promoted in debates over a “minimum basic income,” Social Security, and other types of taxpayer-funded social benefits.
Historically, however, the poor themselves understood that the most effective way to reduce poverty was to reduce the cost of living, and thus to increase real wages.
This strategy has long been apparent in the use of the extended family as a means of pooling resources. It’s why households historically included grandparents and other unmarried relatives within the household who could exchange domestic services for the benefit of a lower cost of living.