Today I was introduced to the work of Juliet Schor, whose book The Overspent American was published in 1997. Schor is an American economist and sociologist, who has studied work and consumerism for a long time now. She's still out there doing it, too.
I read Chapter One of The Overspent American on a NY Times archive link I found.
It feels quite relevant to today, despite being published so long ago. The dynamic being described seems to have gotten worse, if anything, since then!
The whole piece is worth a read, and I'm interested in picking up the whole book too. (It seems only to be available as a physical book, and not an ebook, so chances are I may never read it, but, it's on the list.)
According to Schor, people in the first few decades following World War II wanted to "keep us with the Joneses", aka mainly people in their neighborhood that earned a similar income to them. In the 80s and 90s, this shifted due to media and workforce changes (more middle class white women in the workforce), and from then on, people compared their own consumption habits to people who had much higher incomes than they did. They aspired to spend at the level of this new reference group.
A predictable consequence here is that people began to spend more than their incomes could really justify, and felt poor & less happy even at higher incomes/ More and more goods became "must haves" for what seemed like a "normal" life.
The rise & new dominance of television as a way for advertisers to reach consumers meant less stratification was happening in terms of ad targeting; it made more sense to put an ad for a luxury car on TV during Prime Time than to only put it in Forbes or some fancypants magazine, even if people who read Forbes more reliably had higher incomes than TV-watchers: the sheer number of viewers compensated for this, even if the lower income TV watchers would never be able to afford the luxury car. But now, those people were seeing ads for luxury goods way more than they used to, and that altered widespread perceptions of what kind of consumer spending most people could attain.
Schor also mentions the "relentless ratcheting up of standards". That includes standards for oneself over one's own life, like going from the starter home to the bigger house eventually, or your next car needing to have more features than your old one. But it can also be standards for what it seems like everyone has, or what feels required in order to have a good life.
Schor asserts that a lot of our consumption behavior is driven by a need for status, but says that people are often not conscious of this as an explicit motivation.
But is consumption really a competitive process? If you're like many, you don't necessarily experience it in this way. (On the other hand, if you've organized a birthday party for middle- or upper-middle-class children lately, you probably do.) [...] American consumers are often not conscious of being motivated by social status and are far more likely to attribute such motives to others than to themselves. We live with high levels of psychological denial about the connection between our buying habits and the social statements they make.
Comparing ourselves to a reference group that may have access to much higher incomes or wealth than we do, and ratcheting up our standards for what we "need", means that many Americans feel like they are barely making ends meet even on high incomes. I've felt some level of dissonance about this in the past; it feels like my household's income should be going much further than it seems to be going. Some of that is certainly due to increases in the true cost of living: housing costs more than it did in the past, even here in Lincoln, day care is expensive, artificially inflated grocery prices to boost corporate profits have made grocery bills skyrocket. But reading Schor shows me that people all over the income spectrum have been feeling this way since the 90s, and maybe there is more to the story here.
Oddly, it doesn't seem as if we're spending wastefully, or even lavishly. Rather, many of us feel we're just making it, barely able to stay even. But what's remarkable is that this feeling is not restricted to families of limited income. It's a generalized feeling, one that exists at all levels. Twenty-seven percent of all households making more than $100,000 a year say they cannot afford to buy everything they really need. Nearly 20 percent say they "spend nearly all their income on the basic necessities of life." In the $50,000-100,000 range, 39 percent and one-third feel this way, respectively. Overall, half the population of the richest country in the world say they cannot afford everything they really need. And it's not just the poorer half.