Walmart shoppers on Black Friday. (CC 2.0.)
For the past few days, one of the most popular stories on the New York Times website has been Graham Hill’s op-ed “Living With Less. A Lot Less.” In a majestic display of guileless narcissism, Hill, an Internet multimillionaire, congratulates himself for downsizing his life and getting rid of all the stuff—the homes and cars and gadgets and sectional sofas and $300 sunglasses—he accumulated over the past decade. Now he lives in a 420-square-foot studio and has only six dress shirts and “10 shallow bowls” that he uses “for salads and main dishes.” Imagine that. Eating off the same plate. Twice. In one meal.
There are too many phrases to mock (“Olga, an Andorran beauty”; “My space is small. My life is big.”), and the Internet has already done a great job pointing out how obnoxious it is for a multimillionaire to hold himself up as a model of moderation when so many Americans are being forcibly downsized from already cramped lives.
But let me make one serious point—because scrubbed of its irritating tone, Hill’s cautionary tale is a familiar one that both the left and right like to tell to slightly different effects. It’s the moralizing force, for example, behind the appeal of Annie Leonard’s viral video “The Story of Stuff,” A&E’s hit show Hoarders, Lauren Greenfield’s documentary The Queen of Versailles and Glenn Beck’s theory of the 2008 economic crash: Americans are spending more and more of their money on stuff! Oh no! The left attributes this trend to advertising and corporate consumerism; the right blames individual choices and cultural decline. But either way, it is taken as gospel that Americans are spending increasingly untenable amounts of money on stuff and this is what’s making us (as households and as a nation) both bankrupt and unhappy.
This may feel true, but the economic data from the past half century tell a different story. As Elizabeth Warren and Amelia Warren Tyagi persuasively document in The Two Income Trap, Americans are not going broke buying clothes, books, music, furniture, cars, appliances and other consumer goods. Rampant consumer spending is not the source of their increasingly precarious lives. They call this mistaken narrative “the myth of overspending.” In fact, the share of income we spend in those categories has dramatically declined. For example, in 1949, the average American household spent 11.7 percent of its annual budget on clothes; today it spends just 3.6 percent. By the early 2000s, when Warren and Tyagi wrote their book, American households were spending 44 percent less on major appliances, 30 percent less on furniture and 20 percent less per car than they did just a generation ago in the late 1970s.
Or let’s take a smaller window, between 1999 and 2010, the years in which Hill acquired and unacquired all his stuff. According to the Bureau of Labor Statistics’ Consumer Expenditure Studies, in 1999, the average household spent $1,743 on clothes, $1,499 on furniture, $3,305 on new or used cars and $159 on reading materials (sad face). In 2010, spending in each of these categories declined, in raw dollars, to $1,700; $1,467; $2,588 and $100 (super-sad face) respectively. As a percentage of the average household budget, Americans spent less on food, clothing, cars, entertainment, furniture and reading materials in 2010 than they did in 1999. The portion we spent on housing remained practically the same in those years (34 percent).
So where did the money go? Two words: education and healthcare. The share of the average household budget devoted to education grew by 22 percent between 1999 and 2010, for healthcare by almost 17 percent. (Warren and Tyagi also document how housing costs have skyrocketed over the longer term, arguing that this spike is pegged to the search for decent education.)
Why does any of this matter? After all, Graham Hill wasn’t auditioning for Jack Lew’s job. He was telling his own saga of sudden wealth and subsequent enthrallment with and recovery from materialism as a vaguely ecological, New Age–y fable. But his is an atypical, 1-percent story, despite his insistence that “members of every socioeconomic bracket can and do deluge themselves with products.”
In reality, the incomes of most Americans haven’t soared like Hill’s; they’ve stagnated. And within those depressingly static budget lines, most Americans don’t spend more and more of their money on stuff; they can’t afford to. Quite the opposite, they have to spend it on school and doctor’s visits.
What has happened is that stuff has gotten cheaper—a lot cheaper—which enables people to buy as much (or more) as they used to while spending less. But the exploitative labor practices, giant retail chains and lax environmental standards that have driven the cost of goods (and wages!) down so rapidly merits but a few words in Hill’s entire op-ed. Apparently, people like to hear a lot about how they spend too much and not about how they actually spend too little on the goods that they do buy. Which is all to say that if they were truly concerned about the undeniably disproportionate amount of global resources the United States consumes, as well as the happiness of the American middle class, Hill and The New York Times would be better off lecturing Washington about pursuing fair labor practices, tougher regulations and socializing medicine and education than they would hectoring people for spending too much on stuff—which they do less of anyway.
Read Richard Kim on the hasty beatification of former mayor Ed Koch.