Spending Like Theres No Tomorrow
Goodbye Joneses, Hello, Bill Gates
by Eric Brown
Why do Americans spend so much? How many of us are caught up with the "see, want, borrow, buy" mentality? According to Juliet Schor, author of The Overspent American: Upscaling, Downshifting and the New Consumer (Basic Books, 1998), millions of middle class Americans are fighting and losing an expensive battle not just with their neighbors across the street, but with the rich and famous. Goodbye, Joneses, hello, Bill Gates.
Living Like Your "Friends"
Instead of emulating folks with a similar income, people are taking their consumption cues from television characters (how do those under-employed women on "Friends" afford that great apartment?) relatives, friends and co-workers whose income often far exceeds their own. In a culture that seems to worship wealth and celebrity, this can get expensive. The bottom line, according to Schor, is that "who you choose as a reference group affects how you save and spend."
The fact is, Americans are spending and consuming as if there were no tomorrow, and needless to say, theyre not paying cash. As a result, personal credit card debt has doubled in the last four years, individual bankruptcies are at an all-time high, and people are trading financial security for short-term gratification. In fact, as Schor points out, the median American family has less than $10,000 in assets while savings rates have plummeted in the last decade and a half. "A recession," she notes dryly, "could be painful."
Who is doing all this spending and why?
To try to answer this question, Schor conducted a lengthy survey of employees at a large telecommunications company in the Southeast. According to Schor, "the really, really surprising variable was education. Conventional wisdom says that more educated people will be more educated consumers." Instead, she found the reverse. The greater the level of education, she found, the higher the level of spending. "Better educated people were more tied to the culture of upscale consuming. Education raised aspirations."
This is not to suggest that less educated groups are immune from pressures to spend, however. Despite lost income share, long work hours, terrible wages and worsening benefits, families in the bottom third income bracket are nevertheless faced with the same consumption cues as everyone else. "For many low-income individuals, the lure of consumerism is hard to resist," Schor writes. "When the money isnt there, however, feelings of deprivation, personal failure, and deep psychic pain result. In a culture where consuming means so much, not having money is a profound social disability."
Regardless of levels of income or education, Schor explains, Americans are driven by images of status and success that they not likely to achieve. This shift away from what she calls our "proximate reference groups" at all levels of the economy also coincides with "a profound decline in social interaction," she says. "Were less civically engaged and less likely to talk to other people, while our relationship to the media has strengthened." This responsiveness to media cues was revealed in one of the most striking findings in the book. Schors survey respondents spent an extra $208 annually for every hour of television they watched each week. While she hesitates to draw a direct causal link between television viewing and spending, the underlying message is clear we are deeply influenced by a popular culture that is marked by lifestyles that can only be attained at great expense.
Simple Living Takes Hold
Yet, if this picture of an atomized, disconnected, unrequited society working and spending its way into oblivion is a little depressing, Schor offers hope. She devotes a significant portion of the book to a growing number of people who are progressively disengaging from dominant consumer culture in favor of less work, less spending and an improved quality of life.
Schor describes participants in the simplicity movement (see Enough!, Spring 1998) in detail - people who have rejected the commercial cues that are driving the "overspent" phenomenon. Often highly educated, highly skilled former professionals, they fly in the face of the upward pressures that seem to plague the upper middle class.
Although Schor considers the hard-core simple livers too small a group to quantify, she suggests that the values shift they have experienced could help liberate the frenzied middle class from their predicament. The simple living movement represents a "stepping out of the culture of desire" says Schor. By changing their attitudes about consumption, simple livers have affected what she calls a "paradigm shift" that allows them to live at income levels that fall below the federal governments description of the poverty line, yet they express high satisfaction with their lifestyle.
For many in the simple living movement, environmental concerns have provided the primary impetus to disengage from mainstream consumer culture. Indeed, it was environmental concerns that motivated Schor to write the book, she says, and she is quick to draw the link between overspending and its attendant environmental impacts. "The ways in which consumption degrades the environment is (an) area we need to educate ourselves about," she writes. "Americans know very little about the ecological impacts of their lifestyles beyond the obvious." By profiling a segment of society (however small) in whom the message of responsible consumption and environmental awareness is deeply imbedded, Schor offers a model for constructive change.
The Mainstream Downshifters
Falling somewhere in between the Overspent American and the Underspent American are what Schor calls the "mainstream downshifters" - people who have chosen to make do with less, or people whose circumstances have made that choice for them. Regardless of the reason for their downshifting, recent research has shown that a vast majority of this group would not return to their previous economic situation if given the choice.
Mainstream downshifters often cite work and its attendant stresses as the reason for their lifestyle change. Yet according to Schor, the values paradigm shift has yet to occur for them. Although they have found ways to limit consumption, a "consuming attitude" is still a part of the mainstream downshifters ethos. Case in point - one woman prides herself on her ability to clothe her child with designer labels by shopping at thrift stores and yard sales. For this woman, consumer consciousness lives, albeit at cut-rate prices.
The Overspent Backlash
Nevertheless, Schor insists that a large segment of the population is beginning to chafe at the most obvious attempts to commercialize American culture, or acculturate American commerce, depending on your point of view. Schor cites a growing number of people who are uncomfortable with the commercialization of the holidays, for example. She also suggests that more and more Americans would welcome the possibility of working less and spending more time with family and friends, even if it meant earning less money.
The positive response to The Overspent American may be a sign that people are willing to reexamine the way they spend and an acknowledgement of the effect their spending has on our society. Intense interest in the media including four separate articles in the New York Times, a column by nationally syndicated writer Ellen Goodman of the Boston Globe, umpteen regional TV and newspaper articles and yes, a feature in People magazine - suggests that Schors message is resonating deeply not only with a normally cynical media, but with the public at large.
For her part, Schor remains hopeful that Americans are capable of overcoming the obstacles presented by our consumer culture. "It can hardly be possible that the dumbing-down of America has proceeded so far that its either consumerism or nothing," she writes. "We remain a creative, resourceful, and caring nation. Theres still time left to find our way out of the mall."
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