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.