The Overspent American: Why We Want What We Don’t Need
by Juliet Schor (Harper Perennial 1998)
The Overspent American is a study of the psychological and sociological factors that drive Americans’ compulsive consumption. In the mid twentieth century, we all believed that a big boom in mechanization and productivity would translate into a significant increase in leisure time. Instead the 21st century found Americans working harder than ever. Growing income inequality, with a bigger percentage of our work product, going to corporate profit, is a big part of the answer. Another important part is compulsive spending patterns that have trapped Americans into in painful desire-debt-spend-overwork cycle.
In many, compulsive spending is an addictive behavior. Many shopaholics regret their purchases once they get them home and never use them.
According to Schor, around 80% of Americans feel that US society is too materialistic, while simultaneously under-estimating their own compulsive consumption and indebtedness. In 1998 (when Schor published The Overspent American), 80% of Americans had personal debt beyond their home mortgage. Across the entire population, average debt was the same as average annual income.
Schor’s purpose is to examine why the promise of greater leisure time due to greater mechanization and productivity never materialized. In 1998, when she wrote the book, Americans were working twice as hard in the fifties. In her few, this is only partly due to corporate exploitation. Many Americans are forced to work more hours than they would really like owing to the compulsive spending parents, especially if they get hooked into the desire-debt-overwork cycle.
I had always blamed Americans’ obsessive consumerism on their constant bombardment, by the media, with psychologically sophisticated pro-consumption messaging. According to Schor’s and others’ research, the problem is far more complex.
Overspending, according to Schor is based in competitive consumption, i.e. the achievement of social status based on what you spend, rather than what you earn. It’s a very old phenomenon. Adam Smith mentions it in Wealth of Nations.
Schor’s research primarily concerns the middle class. Individuals with a strong working class identity tend to be less susceptible to competitive consumption pressures, in part because they have little or no discretionary income and limited access to credit and reject bourgeois ideals in favor of non-consumerist values (eg solidarity).
She also examines two specific groups that are oblivious to competitive consumption pressures. I found this particularly valuable in understanding my own lack of desire to consume and acquire material goods.
According to Schor, middle class Americans spend defensively for fear of losing status. The fear of falling behind and ceasing to be middle class became particularly intense in the 1970s, when US companies first began shutting down and moving overseas. Between 1980 and 1995, the upper 20% of the US population experienced an increase in income. Everyone else got a reduction in income. By 1996, the middle class was noticeably shrinking, despite the entry of women into the workforce.
People who were downsized between 1980 and 2000 incurred massive debts to preserve their middle class status. Unlike the fifties, middle class spending expectations no longer revolved around comfort but around conspicuous consumption of luxuries. If you couldn’t afford a four bedroom house, two cars, cable, a VCR, microwave, blender, coffee maker, computer, printer, expensive vacations, massages, personal trainers, lavish gifts at Christmas and other special occasions (one third of which gift receivers neither want nor use), you borrowed money on your credit cards to pay for it. Once you maxed out your credit cards, you ceased to qualify for middle class membership.
The Effect of TV
I was very surprised by the lack of hard research that TV ads stimulate consumption in adult spenders. In Schor’s studies, she found that consumer desires were mainly generated to by exposure to the lifestyles of a reference group, ie the group closest to us in the social hierarchy (workmates, family, friends). Where TV (and films) most influence spending is by offering an inflated view of how other Americans live and what they buy and own. This occurs because the vast majority of TV characters are upper middle class. With growing social isolation, TV itself serves as a reference group for many people.
Downshifters and Simple Livers
Schor classifies people who are resistant to compulsive consumption pressures as either downshifters or simple livers. I found the distinction she makes to somewhat arbitrary, especially when she refers to Quakers, Shakers, Transcendalists and hippies as downshifters. By her own definition, I would tend to call all these groups simple livers: they resisted material accumulation out of moral conviction and were supported by a reference group that shared these values.
According to Schor, downshifters are more likely to be individuals who have given up compulsive consumption due to a debt crisis or intense work stress. They would prefer to have more money and time, but are forced to opt for time due to some personal crisis. Between 1990 and 1996, 20% of Americans downshifted voluntarily. Twelve percent did so involuntarily due to job loss or wage cuts.*
Simple livers reject the notion that material goods determine status. They set a low level of sufficiency income (some set it as low as $6,000 – 15,000 a year). Beyond this level, spending is no longer positive because it creates clutter, harms environment and alienates them from their peer group. They reject the notion that material goods determine status.
Voluntary simplicity circles first started in the Pacific Northwest in the 1990s. Thanks to immense popularity of The Simple Life by David Shi and Your Money or Your Life by Vicki Robin and Joe Dominguez, they are now widespread across the country.
*Thanks to ongoing recession, in 2014 the percentage of Americans involuntarily downshifted is nearly 50%.
**According to Schor’s classification system, I’m a simple liver. It’s something that seemed to come naturally because my parents were non-college educated simple livers who rejected conspicuous consumption in favor of non-material values. Most people in my current reference group (the Green Party) are also simple livers.
Tubularsock must be a reverse-shifter. For years Tubularsock has been throwing it away …… less is better. The man with empty pockets won’t be robbed.
Now Tubularsock is far from having empty pockets but Tubularsock years ago woke up to the consumption bull-shit and started to reverse-shift. And what happened? More room in all aspects.
More room ………
I had much the same emotional reaction (I think) four years ago when I gave my car away. I felt the immense weight of responsibility lift from my shoulders and began to notice what was really happening on the street when I walked or cycled. I’ve befriend a number of street people now. I especially enjoy talking to the teenagers who wash peoples’ windshields at intersections. They’re surprisingly politically sophisticated.
The sad thing is that we are drowning in all that stuff.
And the global elite tells us we all have to keep consuming or the economy will collapse.
Don’t listen to them. Someone a while back wrote a book called “Limits to Growth”. I think we have reached that already. We have to start looking to a more equitable society. Enough of all this stuff! There are too many with nothing.
Thank the Buddha that i hate TV and my credit cards are long gone.but please don’t take away our internet, vidio game or bike.
The Internet is a great toy and pleasant diversion. I would give it up in a flash, if we could get rid of the ruling elite and let people run society themselves.
Hi Stuart, I thought the recent activity around the case of Assata Shakur and herprotection by Cuba might make this article suitable for one of yourblogs. There’s a nice documentary embedded in the article too. https://zcomm.org/znetarticle/an-open-letter-from-assata-shakur-i-am-a-20th-century-escaped-slave/ Best, Jerry
Date: Sat, 27 Dec 2014 22:06:28 +0000 To: email@example.com
Great suggestion, Jerry. It’s an excellent article and video. I’ll have to see if I can get permission to repost it.
Reblogged this on Spartan of Truth.
When I was in college, we learned “that a big boom in mechanization and productivity would translate into a significant increase in leisure time.” We learned that this would be a crisis if an organized league of credentialed leisure counselors and activity leaders were not ready for the challenge of filling the idle hours of everyone’s lives. I heard no mention of income disparity. However, I wondered about unemployment as electronics replaced humans.
Some time more recently, I read that people who engage in “defensive spending” also engage in “conservative” politics as they attempt to conserve their share of resources. They call this spending “investment”. Unfortunately, they don’t recognize that value of the expense will not grow, as a real investment would.
I’d add to the book’s list another aspect of TV’s influence: product placements. As people learned to tune out and delete commercials, companies found more value in paying media producers to conspicuously show their brands. I’m thinking of when I watched Newsroom recently. Some episodes refer repeatedly to Blackberries; others show the characters using Dell computers; then characters are using Apple products. Being aware of such strategies makes us more immune to the influence of product placement.
Downshifters, Simple Livers, Reverse Shifters…I’d like to give honorable mention to Sustainability Promoters who find ways to live sustainably without adding gadgets to their clutter.
Excellent point you make about conservatives engaging in defensive spending – sometimes I wonder if this is just a rationalization for their addiction. To give Schor credit, she does mention product placement in her book. In 1998, when she published The Overspent American, there were no studies as yet on the effect of product placement on consumption patterns.
I agree totally about the importance of Sustainability Promoters.
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I have yet to read the book, so I’m sorry if my comments come across as ignorant. I’m surprised that research on product placement didn’t exist until after 1998 since someone persuaded companies to invest in it before then.
Hi Doc – Best wishes for 2015! Regards
Same to you, toritto. 2015 looks to be a very exciting year in terms of social change.
WeaverGrace, I definitely didn’t perceive your comment as ignorant. It was a good one. It’s possible there was product placement research prior to 1998 – it’s just that Schor doesn’t mention it. I think it’s only recently that ad agencies have been heavily into marketing research – prior to the 2008 downturn it was fairly easy to sell advertising without it.
“Overspending, according to Schor is based in competitive consumption, i.e. the achievement of social status based on what you spend, rather than what you earn”
+ I would add to this by saying, people spend what they don’t have! That is what gets them in trouble. They live above their means.Credit cards are a big problem:-(
My mother gave all of us a copy of the book”The Millionaire Next Door: The Surprising Secrets of America’s Wealthy”(2010) by Thomas J. Stanley. My parents were not poor + my husband and I are not poor, but I am sure some people think we don’t have much….because we don’t try to impress others with what we have. We drive old cars ( paid for in cash), all our children are debt free from college educations + we don’t buy something, unless we need it..We never had a mortgage due to waiting for a home a year before we turned 30-paid cash.
..my father+ mother retired very young + lived very well. They showed us how to make it happen…..I learned very young from my parents that you “wait” for things when you can pay for them + I have found-by waiting you sometimes find you don’t need them:-)
I hate shopping + can’t understand how a person can think that is fun-lol…
I have seen several people that live above their means that rack up bills + then file bankruptcy…they then start the whole thing all over and don’t learn…some learn, but what a mes they get themselves into…..:-) I only hope my kids ( in their 20’s) follow the way we all have:-) IT is the only way to stay free from debt:-)
You were very lucky, Robbie, to have such wise parents. I’m sure your own kids will follow in your footsteps.
Oh, I don’t know about that since they tend to be VERY independent and you never know- they will make mistakes like I did in my youth-lol
I was reading some more about this book last night.I practiced- voluntary simplicity back in the early 90’s.VS is resurfacing under the new “coined” name -downsizing!
Hope it keeps reinventing itself + catches on with more people:-)
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