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The Overspent American 1998

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For most, what is acquired and owned is bound to personal identity ... the prototypes for the less expensive version at K-Mart, Macy's, Wal Mart etc. ... – PowerPoint PPT presentation

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Title: The Overspent American 1998


1
The Overspent American (1998)
  • Main Themes

2
Displaying what we own and acquire
  • millionaire next door extremely rare
  • For most, what is acquired and owned is bound to
    personal identity
  • Usually comparing ourselves to a select group

3
Thorstein Veblen
  • Theory of the leisure class
  • Spending becomes the means by which people
    establish their social position
  • (However, Veblen dealing with the wealthy and the
    newly wealthy
  • Historically, display less likely for modest
    income persons

4
Juliet Schor
  • A new consumerism of the present time marks a
    change from any past example
  • 1950speriod of rising prosperity
  • Keeping up with the Joneses
  • Reference group was the neighbors

5
Today it is no longer the neighbors
  • But more likely to be a group whose income is 3,4
    or 5 times as much
  • The Resultparticipation in a national culture of
    upscale spending
  • This is the New Consumerism

6
New Reference Group
  • Our friends in the media (TV families and other
    famous people)
  • Reference groups stretched out vertically

7
Looking Upward
  • By early 1990s
  • 35 of population would like to be part of the
    really made it group (upper 6)
  • 50 identified with doing well group (next 12)
  • 85 wanted to be in the upper 18
  • Only 15 satisfied with a comfortable life

8
Changing Standards
  • 1960s
  • Happy marriage
  • Children
  • Interesting job
  • Job that contributes to welfare of society
  • 1990s
  • Vacation home
  • Swimming pool
  • Color TV, Flat Screen etc
  • Travel abroad
  • Second car

9
Why long term changes in goals and standards?
  • 1. New reference groups in the media (the
    friends on TV programs (the influence of
    popular culture images)
  • 2. Changes in advertising targeting clusters
    in the selling of upscale selling to rich and
    poor alike
  • 3. Wives in labor forcecomparison to others in
    work setting

10
Why continued
  • 3a. Single earner families at a disadvantage
  • 4. Cultural changes movement towards individual
    expression and self actualization in 1970s
    (rather than belonging)
  • 5. Belief in the winner take all society of the
    1980s

11
Real Life Style Changes
  • Average persons spending increase 30 between
    1979 and 1995
  • Material level rising larger houses, more second
    homes, option-packed vehicles, doubling of travel
    expenditures, personal computers, private
    colleges, designer clothes, Michael Jordan shoes

12
Upscale
  • Lifestyle accessories of the upper 20 are the
    prototypes for the less expensive version at
    K-Mart, Macys, Wal Mart etc.
  • Upscaletrendy shops, ratcheting up of standards
    (50s kitchen has to be redone, if no AC in car
    you need a new one, if havent been to Europe you
    owe it to yourself), flat screen TV etc.

13
Target of upper 20 moves upward in 1990s
  • SUVs, urban spas, personal trainers, limo rides,
    fancy computer equipment, professional quality
    everything, trophy house (4000-25,000 sq feet),
    granite countertops in kitchen, Jacuzzi, media
    rooms (home theater), fitness center

14
More goods, less satisfaction
  • People had more, but felt poor
  • Feeling poor on 100,000 a year (national
    figures)
  • Sometimes spend defensively, to not be left
    behind

15
Rising Expectations, Declining Incomes
  • Upper 20 rising or at least staying even
  • Top 1 from 280,000 to 525,000 (1979-1989)
  • Upper 5 254,000 year average
  • Lower 80 falling in real income
  • From mid 80s to mid 90s the dreams-fulfilling
    level of income rose from 50,000 to 102,000

16
Which leads to The Quality of Life Squeeze
  • Working wives
  • More family members working
  • Savings rate down
  • Credit card debt
  • 30 live paycheck to paycheck
  • Support for public schools, social services eroded

17
There must be some way out of here, said the
joker to the thief
  • Going bankrupt
  • Becoming a voluntary downshifter (a more
    realistic life style)
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