Keeping Up With the Trumps

...And so I have to say I spent it all...

...Our relative position does not change...

...The sheer magnitude of this effect can be appreciated when we remember that the average employee at the company where I conducted my research saved only $10,450 per year, including retirement savings...

...In the savings equation, each step a respondent moved down the scale (from much better off than the reference group to better off) reduced the amount saved by $2,953 a year...

...The rough doubling in living standards was experienced by most Americans, including the poor...

...One research study about television and consumer desires found that as television was introduced in America, it led to a significant increase in crime...

...After all, there’s not an obvious connection...

...I estimated statistical equations that explained the amount of saving and spending each person did in the year of the survey...

...The classless-society and end-of-ideology literature of 25 years ago turns out to have been wishful thinking...

...These are the people whose spending patterns we know and care most about...

...From the end of the Second World War until the mid-l970s, growth was relatively equally distributed...

...I don’t know what I frittered away...

...Below them, a segment of downwardly mobile working people found that their reduced job prospects and declining wages had placed them in the ranks of the working poor...

...We may not surface between the garage and the house...

...I reasoned that a person who is trying to associate or identify with a group above himself or herself will spend more, all other things being equal, than someone who has chosen a comparison group of people with less money...

...I then asked them, “How does your financial status compare to that of most of the members of the reference group you have chosen...

...Class background and income level affect not only the obvious - if and where you go to college, the quality of your children’s elementary school, the kind of job you get - but also your likelihood of getting heart disease, the way you talk, and how respectfully you’re treated by others...

...At all levels of the class structure, we are motivated, as Barbara Ehrenreich put it some years ago, by “fear of falling.’’ Accounts of downsizing captured the nation’s imagination in the 1990s: the laid-off plant manager who clung to his aging Mercedes, suspenders, and sprawling suburban home, depleting his retirement fund in the process...

...Want them enough to steal them...

...Americans live with high levels of denial about their spending patterns...

...And the nonemployed poor fell even further as their numbers grew and their average income fell...

...And that adds up...

...There was a time when we didn’t need television to get such information...

...What one watches also matters...

...Apparently it is...

...We don’t want to fall behind or lose the place we’ve carved out for ourselves...

...Television lets everyone see what these folks have and allows viewers to want it in concrete, product-specific ways...

...Today, in a world where being middle-class is not good enough for many people and indeed that social category seems like an endangered species, securing a place means going upscale...

...Social theories of consumption hold that the inflated sense of consumer norms promulgated by the media raises people’s aspirations and leads them to buy more...

...I really don’t know what I spent the money on:’ Doris Shepley recalls her shopping pattern: “Mine was more of a mindless thing...

...I certainly could have cut my frittering in half, whatever that means...

...Nowhere is denial so evident as with credit cards...

...Rich Moroni found himself “not paying any attention...

...Furthermore, most people do not expect to use their cards to borrow, but, of course, they do...

...TV shows and movies are more and more like running ads...

...As O’Guinn and Shrum note, television has replaced personal contact as our source of information about “what members of other social classes have and how they consume, even behind their closed doors.’’ Another piece of evidence for the TV-spending link is the apparent correlation between debt and excessive TV viewing...

...The importance of denial for dysfunctional consumers has been well documented...

...But these random changes cancel each other out...

...Of more interest is how the broad social groupings that make up the major comparison groups fare...

...As it turns out, this variable has a very large impact...

...And I would submit to you that most of it was the little stuff that added up over a period of time...

...Among the upper echelons, all those personal computers, steam showers, Caribbean vacations, and piano lessons have not been sufficient to offset the anxieties inherent in a rapidly upscaling society...

...We don’t want to get stuck in the “wrong” lifestyle cluster...

...And almost everyone watches TV) In one study, ownership rates for 22 of 27 consumer products were generally overstated...

...Of course, relative positions do change...

...Are you better off...

...the divorced engraving company employee clutching the remnants of her middle-class existence but reduced to burying her food in the snow in the yard because she could not afford a new refrigerator...

...The historical record highlights the fact that beneath - indeed driving - our system of competitive consumption are deep class inequalities...

...We spent $10,000 on credit cards last year, and then really never kept track of what it was we were spending on there, going to the mall, buying some things...

...People say they don’t do it - but my evidence shows they do...

...My research shows that the more TV a person watches, the more he or she spends...

...We’ve all heard the stories about people who drive around in cars full of unpaid credit card bills, who sneak into the guest room at 2:OO A.M...

...Much better off...

...Thus, relative position has worsened for most people, making it increasingly difficult to keep up...

...In the words of one Los Angeles resident, commenting on this media tendency, “They try to portray that an upper-class lifestyle is normal and typical and that we should all have it...

...The dirty little secret of American society is that not everyone did become middle-class...

...We spend more than we realize, hold more debt than we admit to, and ignore many of the moral conflicts surrounding our acquisitions...

...In fact, the income distribution was even compressed, as people at the bottom gained some ground relative to those at the top...

...Your own financial position also matters...

...If a university professor tries to keep up with her college friends who have all gone into investment banking, according to my th ory there’s I decent chance she’ll be sinkinginto consumer debt (or at least not saving much...

...If it causes us to spend, that effect must be powerful enough to overcome its propensity to save us money...

...Let’s not forget that television programming and movies are increasingly filled with product placements - the use of identifiable brands by characters...

...Television also affects norms by giving us real information about how other people live and what they have...

...We still have rich and poor and gradations in between...

...Even when we are aiming high, there’s a strong defensive component to our comparisons...

...The likely explanation for the link between television and spending is that what we see on TV inflates our sense of what’s normal...

...Now we’re more - I know I am - ‘I need this.’ And it’s not really a need.’’ From the book The Overspent American: Upscaling, Downshifting, and the New Consumer...

...Jones’ delight at being able to afford the Honda Accord is dampened when he sees Smith’s new Camry...

...Keeping Up With the Trumps How the middle class identifies with the rich BY JULIET B. SCHOR FOR MOST OF US, SOCIAL SPACE BEGINS with relatives, friends, and co-workers...

...Larceny is a crime of property, mostly committed by lower-income people...

...How many of us really keep track of where the cash from the ATM goes...

...One of the few remaining free activities, TV is a popular alternative to costly recreational spending such as movies, concerts, and restaurants...

...Most Americans don’t budget...

...Studies by the consumer researchers Thomas 0’ Guinn and L.J...

...How many times have you heard someone say, “Oh, I’m not materialistic, I’m just into books and CDs - and travel...

...We almost never hang out in our front yards...

...Dramatic shows - both daytime soap operas and prime time - have a stronger impact on viewer perceptions than other kinds of programs (say news, sports, or weather...

...Not paying attention to what we spend is also very common...

...How we spend has become a crucial part of our self-image, personal identity, and social network...

...The more people watch television, the more they think American households have tennis courts, private planes,’ convertibles, car telephones, maids, and swimming pools...

...Among those raised in a financially rarefied atmosphere, TV is almost a reality check...

...The excitement, convenience, or joy that households may have experienced through the billions in additional spending between 1979 and the present seems to have been overshadowed by feelings of deprivation...

...Is it just about the same...

...Like standing up in a crowd to get a better view, it stops working once others do it too...

...They found themselves driving around without a spare tire, giving up their health insurance, and waiting between haircuts as long as possible...

...They are the people against whom we judge our own material lifestyles, and with whom we try and keep up...

...The lifestyles depicted on television are far different from the average American’s: With a few exceptions, TV characters are upper-middle class, or even rich...

...More than half (56 percent) of all those who reported themselves “heavily” in debt also said they watched too much TV It is partly because of television that the top 20 percent of the income distribution, and even the top 5 percent within it, has become so important in setting and escalating consumption standards for more than just the people immediately below them...

...The more people watch Ty the more they think American households have tennis courts, private planes, convertibles, car telephones, maids, and swimming pools...

...Television inflates standards for lower-, average-, and above-average-income students, but it does the reverse for really wealthy ones...

...Fear of Falling Fifty years ago, most people just wanted to secure their place in the American middle class, doing whatever it took to stay there, At one time, that was acquiring a houseful of “decencies,” the status symbols of the middle class, situated between the necessities of the poor and the luxuries of the rich...

...The current mood has led to nostalgia about the older, simpler version of the American dream...

...Eighty percent end up paying finance charges within any given year, with just under half (47 percent) always holding unpaid balances...

...to make a QVC purchase, or who quietly slip off at lunchtime for a quick trip to the mall...

...What is that evidence...

...Just asking people about this doesn’t yield much information...

...What is not well understood is that the spending of many normal consumers is also predicated on denial...

...The idea is that where you stand relative to those with whom you compare yourself has a significant impact on your spending...

...In the end, the view is the same, but everyone’s legs are tired...

...Looking across different locales, before and after the introduction of television in the 1950s, Karen Hennigan and her colleagues found that one type of crime jumped up significantly...

...In the past, homes, possessions, and habits were much more open to view and fully part of what Erving Goffman has called the system of “impression management...

...Americans have a lot of psychological resistance to recognizing and admitting the extent to which they follow the lead of others...

...It allows us to be voyeurs, opening the door to the “private world” inside the homes and lives of others...

...Then I added my own comparative variable - how the respondent stacked up financially compared to his or her reference group...

...eprinted by permission of Basic Books...

...I included a wide range of factors likely to affect spending, such as the respondent’s age, number of dependents, household income in that year, long-term expected income (or what economists call permanent income), age, and so on...

...Moving from the top to the bottom would lead you to save $15,000 less each year - or more likely, to take on some of that amount in debt...

...Shrum confirm this upward situation...

...Leaving aside other kinds of ads for the moment (for cars, diamonds, perfume) there’s another counter to the argument that television causes consumerism: TV is a substitute for spending...

...Their anxiety grew, and it became commonplace that it was no longer possible to achieve a middleclass standard of living on one salary...

...Some people get promotions or pay raises that place them higher up in the hierarchy...

...We build a deck instead of a front porch...

...Since then, however, and particularly since the 1980s, the income groups have diverged...

...And they don’t watch...

...Indeed, as I unpacked a box in my front yard the other day so I could keep an eye on the kids, a drive-by shopper stopped by my “yard sale...

...I elicited this information in order to figure out whether Americans really do keep up with others...

...At all levels, a structure of inequality injects insecurity and fear into our psyches...

...According to these estimates, disaster ensues as a person slides down the reference group scale...

...Are you worse off than the people you compare yourself to...

...In the Merck Family Fund poll, the fraction responding that they “watch too much TV” rose steadily with indebtedness...

...Copyright 0 1998 by JULIET B. SCHORR...

...Heavy watchers also overestimate the portion of the population who are millionaires, have had cosmetic surgery, and belong to a private gym, as well as those suffering from dandruff, bladder control problems, gingivitis, athlete’s foot, and hemorrhoids (the effect of all those ads for everyday products...

...Or, as one Chicago woman put it, ‘We’d all be better off if we cared less about what someone’s wearing and what kind of a car they’re driving or where they’re living...

...Both must put in long hours to make the payments, suffer with congested highways and dirty air, and have less in the bank at the end of the day...

...The comparisons we make between ourselves and them matter deeply to us...

...We rarely linger on the street...

...Others fall behind...

...But when everyone’s doing it, upscaling can mean simply keeping up...

...unemployed aerospace workers waging a daily battle not to lose their homes and slip into the scary world of poverty...

...Many of the products advertised on television are everyday low-cost items such as aspirin, laundry detergent, and deodorant...

...Middle-class Americans began to experience themselves falling behind as their slow-growing wages and salaries lagged behind those of the groups above them...

...Contrary to economists’ usual portrayal of credit card debtors as fully rational consumers who use the cards to smooth out temporary shortfalls in income, the finding of the University of Maryland economist Larry Ausubel was that people greatly underestimate the amount of debt they hold on their cards - 1992’s actual $182 billion in debt was thought to be a mere $70 billion...

...However rational it may be for individuals to keep up with the upscaling of consumer standards, it can be deeply irrational for society as a whole...

...Those TV ads are hardly a spur to excessive consumerism...

...Seeing all those products on television made people who didn’t have them, and couldn’t afford to buy them, really want them...

...But as we have gotten richer, we have become more private...

...And both remain frustrated when they think about the Land Cruiser down the street...

...And we act upon that deep feeling...

...Almost everyone does...

...According to the research I have done, how people stack up financially against the group with which they most often compare themselves, or their reference group, has an enormous impact on their overall spending...

...I began my study by asking all the respondents at the company where I was conducting my research to identify their primary reference group...

...Screen With Envy While television has long been suspected as a promoter of consumer desire, there has been little hard evidence to support that view, at least for adult spending...

...There is a palpable sense of unease, a yearning for the less expansive, and less expensive, aspirations of our parents...

...Apparently the only thing we use our front yards for now is to sell the junk we can’t fit inside...

...Moving down two steps reduced saving by twice that...

...When my parents grew up, they weren’t so much ‘I want this, I’ve got to have that.’ They just wanted to be comfortable...

...These are the standard variables that economists typically use to explain variations in spending propensities across the population...

...Part of what keeps the see-want-borrow-and-buy sequence going is lack of attention...

...The more our consumer satisfaction is tied into social comparisons - whether upscaling, just keeping up, or not falling too far behind - the less we achieve when consumption grows, because the people we compare ourselves to are also experiencing rising consumption...

...The penalties of dropping down are perhaps the most powerful psychological hooks that keep us keeping up, even as the heights get dizzying...

...We’ve become so inured to this practice that it’s hard to remember that a can of soda in TV show was once labeled “soda” rather than “Coke” or “Pepsi...

...At the same time, increasing numbers began to lose completely the respectability that defined their class...

...Ironically, inequality began to arise soon after these ideas appeared...

...In the words of one young man, “My dream is to build my own house...

...Much more private...

...On the other hand, the theory predicts that the senior vice president who hangs onto his old buddies from middle management is likely to build a tidy bank balance...

...Many “fritter,” as this downshifter recalled: ‘Nl I know is at the end of the month I never had anything left...

...We had to really examine where all of our money was going...

...Not violence, not rape, not murder, but larceny...

...Heavy watchers are not the only ones, however, who tend to overestimate standards of living...