The Overspent American
In this follow-up to her 1992 The Overworked American: The Unexpected Decline of Leisure, Juliet Schor presents a basic idea familiar to students of American culture: Americans, especially those in the upper-middle classes, often spend not for quality but for prestige and status. Her idea is not original, but she fleshes it out with a strong background in sociology and her own investigations, including interviews and an experimental study. The Overspent American is more limited than The Overworked American because it concentrates on a particular economic class rather than the workforce as a whole, but the discussion reflects American economic culture as a whole.
Schor describes what she calls “competitive spending.” The patterns of this spending differ by economic class and are driven by discretionary income. Schor focuses on the middle and upper-middle classes because they have enough discretionary income to make competitive status purchases, yet not enough income to do so without consequences for their economic health. She recognizes that competitive spending always has existed; people have always tried to “keep up with the Joneses,” and Thorstein Veblen revealed what he called conspicuous consumption early in the twentieth century. What is new in the 1990’s is the scale of competition. Instead of competing with the Joneses, Americans often find themselves competing with the world.
Briefly tracing the history of consumerism, Schor finds that the conspicuous consumption of the early twentieth century turned to mass production and emulation around the 1950’s. Rather than trying to distinguish themselves through spending, Americans (particularly of the middle classes) tried to fit in, buying products that everyone else had and that were identified with the middle-class culture. That urge toward emulation has continued, but members of the middle classes now mimic people in higher classes, trying to make themselves fit there.
This attempt at upward mobility comes in large part from greater exposure to those with different lifestyles—and naturally, people try to fit in with those above them, rather than below. In the 1950’s, people’s social circles included their neighbors and workmates, and few others. That has changed in several ways. Women now are exposed to others in a wider spectrum because they are more likely to be in the workforce, and the remaining one-earner families have neighbors with two incomes. Workers associate with a wider array of coworkers on the job, with assembly line workers now exposed more to managers, and managers of all levels interacting. The world of work thus provides a wider scope for comparison and emulation.
A more pervasive effect comes from television. Ironically, television is seen as the medium of the masses, but because it has such a wide reach, product advertisements reach audiences for which the products never were intended. Millionaires are a small proportion of the television audience (and of the U.S. population), but because of the sheer number of people watching, advertisers find it worthwhile to air commercials aimed at those in the highest economic classes. As a side effect, those in lower classes are exposed to these ads, and they come to believe in an exaggerated prevalence of such products as Mercedes-Benz automobiles, big screen TVs, and expensive jewelry. Programming itself is no help in offsetting this impression. Movies, miniseries, and sitcoms focus on the wealthy, or at least on well-to-do professionals, and shows about the less fortunate have little impact: No one emulates the Conners of Roseanne.
In support of the effect of television, Schor presents results from a survey of telecommunications workers, 35 percent of whom earned more than $55,000 a year. With other variables controlled, she found that each additional hour of television watching per week increased spending by $208 a year.
Exposure to a wider social group has led many Americans to dissatisfaction with their relative position. Americans deny that they emulate others, but Schor again presents convincing evidence from her survey of telecommunications workers. Using mathematical equations that controlled for age, number of dependents, income, and long-range expected income, she tested the effect of social position on spending habits relative to a reference group. Saving dropped by nearly $3,000 per year for each step down in a person’s perceived status relative to the reference group, such as from “much better off” to “better off” than one’s peers. Thus, from the top end of “much better off” to the bottom of “much worse off,” a difference of five levels, saving fell by nearly $15,000. This is strong evidence that those lower in their perceptions of standing on the social scale spend more to try to catch up, or at least to appear to be doing so.
Another result from the survey is a comparison between those who admitted feeling pressure...
(The entire section is 2042 words.)