It would take something really wrong before I would leave a job with no savings/job to go to and kids who need food and clothes. But, if I started to see signs of things I was uncomfortable with, I would definitely start looking for something else. I would probably push very hard to find another job. What your wife is seeing going on may be only the tip of the iceberg or the beginning of a change in direction. So now is the time to look elsewhere.
Now, if I could survive but just would be giving up luxuries, vacations, etc. Or would maybe be eating a bit more spaghetti, and soup and what was going on really made me uncomfortable I would leave. From personal experience, it is always better to look for a job while you are employed and not feeling rushed to find something.