Timehost: We're going to talk about a subject that lots of us
probably know a great deal about from experience -- spending. If you feel that you're working harder than ever
before--maybe even making more than ever before-- and yet you still don't
have enough money, then you'll certainly want to talk to our guest tonight,
Juliet Schor, author of the new book, "The Overspent American."
Timehost: It has a subtitle, which we'll also be talking about, I'm
sure, "Upscaling, Downshifting, and the New Consumer."
Timehost: Welcome.
Juliet Schor: Hello.
Timehost: Let's take the first question from online.
Avidread21 asks: Why are American overspenders?
Juliet Schor: The answer to that question lies in the advent of what I
call the era of New Consumerism. The new consumerism which evolved two
decades ago involves an upscaling of consumer aspirations, spending and norms. Unlike earlier times, when we took our cues from people
with similar incomes, lifestyle aspirations today are far more likely to
come from the lifestyles of the upper middle class and wealthy. Two major
developments have caused the new consumerism. The first is the growing
importance of television, which shows programs nearly all of whose characters are upper middle class
or wealthy. In my research I find each added hour of TV watched
increases a consumer's annual spending by roughly $200 per year. So, an average
level of TV watching of 15 hours a week equals nearly $3,000 per year. The second
development is the continuing worsening of the income distribution in which
the top 20% of households have been garnering a larger share of wealth and
income for almost 20 years. Their conspicuous consumption has led the remaining 80% of
society to emulate them.
Angelschiz asks: Ms. Shore, Angel Smoot, Solutions Online E-zine - Do
you feel that the new advances in technology and the internet as a base of
commerce has increased the supply and demand quotient, thereby increasing
the debt of Americans?
Juliet Schor: To the extent that the painlessness of purchasing online
has encouraged people to spend money, and to the extent that many of us get caught up in a
continuous cycle of upgrades to hard and software. The answer to your
question is: Yes. But I believe that the advent of the new consumerism is
attributable to much more than technology.
RicardoGatosToo asks: The correlation between TV watching and how
much a viewer spends is frightening in how it feeds the spending hunger.
This is a pervasive medium. How can we protect our kids?
Juliet Schor: Let me first elaborate something: The obvious answer is
to keep them from watching TV. In my house we have one TV. In a cold
uncomfortable third floor room, which is out of sight and out of mind. and my
children never watch it. I think that has been very beneficial to their
development, because they amuse themselves without resorting to the passive
phenomenon of TV watching. But one thing keeping kids sheltered from TV
requires is that parents themselves tune off to a larger extent. I don't
pretend this is easy, but I do believe it is worth the struggles that may
ensue. And by the way, I think that not introducing "educational TV" at an
early age makes it much easier to limit or prohibit TV later on. What sesame street teaches is how to watch sesame street. The difficulty of doing this is of course much greater for
single parents or time-stretched homes, because TV has become the modern
baby-sitter. But if you can avoid using it in such a way, by all means do
so.
Timehost: Here's someone who appears to disagree...
Twilight45 asks: So, basically, you are blaming consumption on
television. This is the same kind of attitudes that blame kids violence on
Beavis and Butthead.
Juliet Schor: I am arguing that TV is ONE of two major factors which
have created the new consumerism. The mechanism through which TV affects
spending is by helping us form impressions of the kinds of
lifestyles that others lead and that we ourselves would like to lead.
Research shows that people who watch lots of TV have large upward biases.
That is, misperceptions about how others live. They vastly over estimate the
percentage of American homes with swimming pools, maids, tennis courts and
the like. My research shows that increased exposure to TV, holding
constant the large number of other variables, increases individuals 'annual
spending. If you consider that "blame" so be it.
Timehost: Let me ask a question about one of the amazing statistics
in your book...I'm sure you know which one I'm talking about -- that more than a quarter of people making more than
$100,000 a year think they don't have enough money to buy what they need.
What is the story there?
Juliet Schor: The explanation for large numbers of high income
individuals reporting that they can not afford basic necessities, is that
needs have come to be experienced in a social, rather than biological or
absolute context. The upscaling of the new consumerism has led many higher
income families to feel deprived and as though they can not make ends meet.
The fact that half the American population feels unable to make ends meet,
suggests to me, not an individual failing, but a social system gone wrong. The new consumerism resulted in a intensified competition
around visible status goods, (homes cars, clothes..) which is proceeding at
a dizzying rate, and is leaving those of us participating to feel as if we
are running faster just to stay in place. Perhaps we need to stop and take
a breath.
Li11i asks: Don't you think your argument is a bit moralistic? What's
wrong with aspiring to more. Who are you to say what people should and
shouldn't want. We still have that basic human ability to make decisions. We
take the consequences for our actions.
Juliet Schor: Let me be clear. I am not telling people what to buy and
what not to buy. I am analyzing a social phenomenon, which large numbers of
Americans are uncomfortable with, that feel that in order to keep up, they
need to spend more than is fiscally prudent. This nation is experiencing record numbers of personal
bankruptcies, record numbers of credit card debt, particularly among affluent households, and our savings
rate has fallen by half in the past 20. We are in what theorists call a
collective action failure. Large numbers of people could be made better off,
if we could agree to slow down together. National income has been rising for the last 20 years, but
measures of the quality of life have fallen. And by the way, what's wrong
with a moral message? Those who like it can listen. And those who don't are
free to disagree or ignore. I have no qualms talking about values and morality even as
I try to analyze our society.
Stamm43 asks: Would you agree that the Middle Class has real needs
our parents did not have? For example, urban parents must send their kids
to private schools, since the public schools are inadequate.
Juliet Schor: Yes. They do, the problem I see is in the way we and the
society are meeting those needs. Rather than shift to expensive private
education, what about a collective response to improve the public schools? The
decline of public goods, such as education, recreation, and culture, has led us into a vicious cycle in which we need more money
to purchase private alternatives: Discovery Zone rather than the local
playground. But that move to private substitutes further weakens support for
the public good. What I argue in my book is that the intensification of
competition in private status goods is in part creating pressures on income
which undermines support for public goods.
Dick_Wayne_Kerr_III asks: The real question is do we emulate....or do
we make a conscious decision to be in debt?
Juliet Schor: One of the most fascinating things about credit card debt
is how many people are NOT conscious of their behavior. The vast majority of people who get credit cards do so
with the intention NOT to borrow. And yet, two thirds hold unpaid balances.
The average American underestimates his or her credit card debt by a factor
of 2. In this area, I believe the word denial is rather accurate.
KM_Allen asks: What do you do to live well but not overspend in
today's world?
Juliet Schor: Of course, the answer to this question varies by
individual. However, here are a few things I think about and/or practice.
Number 1: Acquire no credit card debt. Number 2: Track all purchases,
even small ones carefully. Avoid impulse purchases. Use an automatic
withdrawal savings plan. Use things, including your car, until they really wear
out. Avoid living in a space which is larger than you really need for
comfort. Carefully scrutinize spending on things like restaurants,
travel, entertainment and recreation. Figure out whether these expenditures which comprise an
increasing amount of most Americans' budgets are really worth it in terms of
value for the dollar. My research with Downshifters has led me to believe
that many Americans can reduce their expenditures by 20% without impinging
on their quality of life. In some of these cases and from personal
experience: spending less actually makes me feel better.
Angelschiz asks: Do you feel its possible to live completely debt
free today?
Juliet Schor: It is possible, although it depends in large part on one's
income and if one owns a house.
Timehost: As some of you know, Juliet Schor's earlier book was called
"Overworked"...
RicardoGatosToo asks: I've read both "Overworked" and "Overspent" and
the areas that seem most difficult for you are the solutions. Since
"Overspent" has been out, have you any additional thoughts and ideas on
dealing with the issues you presented?
Juliet Schor: I suppose if I were to write my last chapter differently,
I would put more emphasis on the structural role of corporations, and
provide a longer discussion of public policy responses which can influence
these problems. But, I took a perspective which emphasized civil society.
because I believe that we will need cultural changes to force through the
policy changes. I would also have emphasized more the negative
environmental impact of consumption, because I believe there is now more
reception among the public to considering those issues. Richard, what are
your suggestions...I am curious to know?
Timehost: Unfortunately, those are all the questions we have time for
tonight, but I just wanted to ask whether you have any closing thoughts?
Juliet Schor: The problem of excessive consumerism, which I address in
my book, is a social problem. My deepest hope is to engage the
Nation in a serious debate about how we live our daily lives.
Juliet Schor: I am grateful to those who tuned in tonight for engaging
with me, and hope they continue the conversation both on line and face to
face in their own communities and work places. Thank you all. Good night.
Timehost: Thank you very much, Juliet Schor, for being with us
tonight.
