For the past 100 years or so, the US economy, and much of the world economy later, has been based on consumption. Consumption is only powered by people having money to spend outside of their own survival. In this article by David Cain, he wrote about the difference between a year of frugal traveling and having a regular job with disposable income. The differences are pretty interesting.
The writer reported that when he had a fairly fixed income he was careful with his spending contrasted with having a regular job where he could drop $60 without thinking very much about it because more money was coming in. With a salary, spending small amounts of money on relatively frivolous things can become a common habit.
And our economy is rather dependent on it.
Most people aren’t going out buying new cars or major appliances for no good reason. However, a coffee here or there, a random media purchase, and other small purchases can quickly add up. Cutting these casual purchases is one of the first ways to reduce spending and increase savings; any financial expert will advise that. The writer goes on to point that his favorite things like meditating, reading, exercising and what not were falling out of his routine because of the time crunch of commuting and being at work. At his points out, these things are relatively free but do take time, time that most working people just do not have. In a recent survey of workers, the benefit most people wanted was more time including paid time off, paid family time, and actual vacations. Americans usually only take about 10 days of vacation per year. That’s compared with an average European vacation time of 3 weeks.
However, can we imagine an economy where everyone just learns to spend much less money in favor of having their own time not working? It’s not a leap of imagination. It’s the reality for millions of Americans right now. The effects are far reaching too. Stores associated with the middle class like Sears, JCPenney, Kmart, and Toys R Us are struggling or closed. People are simply looking for deals and spending less money. Why is that? We’re working longer hours and wages have been stagnant for so long that inflation and cost of living increases have eaten away much of the gains that would have ordinarily filled the pockets of regular people. This has happened in such an insidious way that only now have people really started to notice. For those with better salaries, it’s not always as obvious.
The modern worker has less time and less money. Even for the well-paid, the time crunch can still be significant. As was true for the writer in the article mentioned. When time is short, it’s easier to spend money to get the same mental health effects as doing healthy things that don’t cost as much money. This translates into consumption that supports businesses and jobs. It’s the reason people don’t cook meals for themselves enough, don’t brew their own coffee, and don’t do hundreds of other time-costing but money saving tasks. This is amplified for the poor who might work odd hours or have a long or complicated commute.
Consumer spending won’t be drying up any time soon but the effects of people having less time and less money is all around us. For many workers, it’s far easier to simply spending money to get something rather than devote ever-limited time to do things for themselves.
And indeed an 8 (or more) hour work day that makes people time poor, keeps the economy going to some degree. It keeps fast food locations open, it keeps Starbucks/Dunkin donuts operating, and all the ancillary businesses that support those sorts of industries. The American economy counts on people being time poor. Perhaps that is why there is less enthusiasm for a 4 day work week?