Selections from: Juliet Schor, The Overspent American:  Why We Want What We Don't Need (New York: Basic Books, 1998).

2. According to Prof. Schor, how are the spending patterns of “most Americans” different from those of most millionaires? 

3. What does Prof. Schor mean when she says that, “Advertising and the media have played an important part in stretching out reference groups vertically”?

4. As Prof. Schor points out, “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.” While I’m generally not inclined to have students memorize statistics, there are some numbers here worth pondering.  Consider what follows: “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 per cent 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.”  Okay, so if I ask you, of Americans in the $50,000-100,000 range (the range most of our students aspire to be in sometime within five or so years after graduation), how many people say they cannot afford everything they really need, you should answer ... what?  And if I ask you, of Americans in the $50,000-100,000 range, how many people say they spend “nearly all their income on the basic necessities of life,” you should answer ... what?

5. Any thoughts on the statistics given above?  What would you say, for example, to a UST alum, seven years after graduation, making, say, $60,000 a year, if he or she said to you: “Damn it, I just can’t afford everything I really need.  In fact, I spend all of my money on the basic necessities of life.  I just can’t get ahead!”  What if that alum were you?  What is the likelihood that that alum will be you if national patterns hold true for graduates of UST?  (Look around the classroom, count how many students there are, and then figure out how many of you will be, not only “dissatisfied” with your lives, but feeling “on the edge”– “just barely making it”– even if you’re making in excess of $50,000 per year?   What would be required to keep you from entering into that 39 percent?  More money?  Would making more money really keep you from having that “barely making it” feeling?  How much more? 

Sometimes students will say to me: “But Prof. Smith, I have to make money!”  Yes, you do.  The question is, “How much?”  You want to live in a hard-edged, serious-minded business world, don’t you?  Okay, so figure it out: how much money do you need?  It doesn’t matter to me whether you say $50,000 per year or $250,000.  My proposal is simply this: Figure out how much you need, and then once you’ve reached that goal, stop worrying about making more money.  But as we all know, that probably won’t happen.  Why not?  What happens to most people once they actually reach that $50,000 or $250,000 or $250 million goal?  Explain.

6. Many of my students who read these figures laugh contemptuously at these people making $100,000 and above who say they “cannot afford everything they really need.”  These people, they think, are so tied to “how they look” and “how other people see them.”  One student, covered with tatoos and wearing a studded leather belt, came up to me after class and said, “I hate those people!”  He had spent some time living – literally – on the streets.  And he was none too happy with the ostentatious wealth he saw swirling around him in Houston.  (Now he drives a very expensive Lexus and wears a Rolex watch.)  Are these students missing something – something a little closer to home?  Consider, for example, the following statement in Prof. Schor’s book: “Beginning in the 1970s, expert observers were declaring the death of the ‘belonging’ process that had driven much competitive consumption and arguing that the establishment of an individual identity – rather than staying current with the Joneses – was becoming the name of the game. The new trend was to consume in a personal style, with products that signaled your individuality, your personal sense of taste and distinction.”  Sounds much better, doesn’t it?  People are not trying to “keep up with the Joneses” any more; they are consuming “in a personal style,” with products that signal their “individuality,” their “personal sense of taste and distinction.”  That’s what we all do, right? – all of us who aren’t those spoiled rich people.  Okay, so what’s the problem?

7. Please explain what marketers mean when they talk about “clusters” or “cluster groups.”  What is the “irony,” according to Prof. Schor, of the shift to “individuality” in marketing?

8. By the way, if doubt that you’re in any sort of cluster group – most people do – you might trying Googling PRIZM.  If you go to the PRIZM web site and punch in your area code, you will find there a description of the main groups that marketers think live in your area.  Does the description seem accurate to you?  (Please remember that, for many of you, you are living in your parents’ house – at least for now – so you may not particularly identify with those groups.  Instead, you might consider punching in the zip code of the places or areas you generally like to hang out in.  Do they have you (and your “crowd”) pegged now?  There is nothing more common in America than people trying to express their “individuality” through the consumer items they purchase – nothing more common, that is, than people denying that in making consumer choices, they are actually trying to “belong” to some cluster group.

9. If you accepted the idea that expressing your “individuality by purchasing consumer items was ultimately a losing proposition (either some “merchant of cool” is trying to sell you an identity, or if you’re a trend-setter, soon some “cool hunter” will identify your style, and start marketing it to everyone else, thus making you, once again, “just like everybody else”) – if you accepted that idea, what rational response would you give to the problem?

* Either (A) blow up all advertizers (which is not perhaps the most rational response), or (B) give up trying to express your individuality through consumer items, and try expressing your individuality through things like courage, heroism, generosity, hospitality, honesty, integrity, friendship, justice, fairness, good will, etc. – all those things that we tend to avoid because buying a shirt from Abercrombie & Fitch or Hot Topic is just so much easier.  And just so much more “cool” – or at least so much more “cool” as defined by MTV, Maxim, Cosmopolitan, Us, People, and all the rest of the advertisers and marketers in America. 

10. “Unfortunately,” says Prof. Schor, “the government doesn't collect systematic data on ‘the American dream and its upscaling.’ But there is evidence of a sharp escalation over this period.”  I won’t be asking you to remember the exact numbers in this case, but it’s worth taking not of them nonetheless. “In 1986 the Roper polling organization asked Americans how much income they would need to fulfill all their dreams. The answer was $50,000. By 1994 the ‘dreams fulfilling’ level of income had doubled, from $50,000 to $102,000....  Of course, $102,000 is not everyone's dream. In a consumption system premised on differences, dreams will also differ. And predictably, the higher one's income, the more one must have to feel fulfilled. Those making more than $50,000 said they would need $200,000 for total fulfillment, while lower‑income people calculated that they would need only about $88,000 a year.”  Okay, so here’s the question: How much is your “dreams fulfilling” level of income?  And if you actually succeed in making that amount – whether it’s $50,000 or $250,000 – do you think your dreams will actually be fulfilled?  Why or why not?  By the way, while we’re on the subject, what are your “dreams”?  What would it take to fulfill your dreams?  Have you even given it any thought?

11. Here’s another passage from Schor’s text: “Other surveys also indicate an expansion of desire and expectation. Asked what constitutes ‘the good life,’ people focused far more on material goods and luxuries than they did in 1975. Items more likely to be part of the good life now than then include a vacation home, a swimming pool, a color TV, a second color TV, travel abroad, nice clothes, a car, a second car, a home of one's own, a job that pays much more than the average, and a lot of money. Less likely, or no more likely, to yield the good life, according to respondents, were happy marriage, one or more children, an interesting job, and a job that contributes to the welfare of society.”  Okay, so here’s a question: What (for you) constitutes a “good life”?  Have you ever given it any thought?  If not, why not?  Don’t you want a good life?  Do you assume that you can achieve a “good life” (however you define it) without having any idea what a “good life” is?  Isn’t that a rather strange assumption?  Isn’t that a bit like assuming you can drive to Mt. McKinley without having any idea where Mt. McKinley is?  (It’s in Alaska, by the way, and in Alaska, they call it “Denali,” not “McKinley.”  If you drove there from here, once you reached the Canadian border north of Seattle, you would be less than half way to your destination – maybe 40% of the trip. There are still some 500 miles of the road that have not yet been paved. Good luck trying to do it if you don’t know where you’re going.)  

12. “Americans' concept of need has also clearly changed,” claims Prof. Schor. “Data from 1973, 1991, and 1996 reveal that a variety of consumer items are seen as necessities by an increasing number of people. About one‑quarter of Americans consider home computers and answering machines to be necessities, one‑third feel the same way about microwaves, more than 40 percent can't do without auto air conditioning, and just over half say home air conditioning is essential. VCRs and basic cable, which weren't included in the 1975 survey, are necessities to 13 and 17 percent of the nation's consumers. The list of things we absolutely have to have is growing.”  The obvious next question is: What are “necessities” for you?  (Remember how many Americans say that they spend nearly all their income on basic necessities?  Well, now we’re giving some thought to what constitutes a “necessity.”) Is owning a microwave a “necessity”?  How about cable?  High-speed internet?  Stereo?  DVD player?  Latest video game system and video games?  Really cool car?  Going to the clubs and looking really hot?  Okay, let’s be honest, almost no one will say (in front of a crowd of people) that those things are necessities.  They’re just things that we really, really, really want.  (Although, when we’re young, we do say to our parents, things like:  “But mom, I neeeeeeed it.”  Perhaps you’ll remember the tone you used.) But here’s the bottom line: Are they things you could do without – and still be happy?  Or if you didn’t have them, would you be dissatisfied with life?  Are you dissatisfied with life now because you don’t have those things?  And do you assume that getting those things will make you happier and more satisfied?

13. In another passage, Prof. Schor claims: “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.  Most Americans would deny that, by their spending, they are seeking status, in the usual meaning of the word – looking to position themselves in a higher economic stratum. They might point out that they don't want everything in sight, that purchases are often highly selective.”  Does that statement describe you?  Let me put this another way, by asking you to consider the following five questions:

14. What does Prof. Schor mean when she says that, “One of the interesting things about much of the recent spate of spending is its defensive character”?  Why “defensive”?  Isn’t shopping supposed to be “fun”?  Isn’t shopping an expression of your “individuality”?

15. As Prof. Schor points out (and documented in detail in her previous book The Overworked American), Americans are working more and more hours every year.  Despite working all these hours, how many households live paycheck to paycheck?

16. How much of its income is the average American household currently saving (as opposed to spending)?  In 1995, what percentage of all American households indicated that they had done any saving at all in the previous year.

17. According to Prof. Schor, “As a result of low household savings, a substantial fraction of Americans live without an adequate financial cushion.”  If one were to define an “adequate” financial cushion as the ability to sustain one’s family at current levels for at least a month – how long do you think it takes to find a new job if you lose the current one? – what percentage of American families could survive that long?

18. You are now receiving a top-flight college education (or so we flatter ourselves).  In 1995, what percentage of families headed by college graduates did no savings at all?  If the key to financial success in America is, as every financial planning expert will tell you, “spending less than you make, saving, and investing,” then what would be the most valuable lesson we could possibly teach you regarding your future financial success?  (Look, it’s not the job of the Odyssey Program to make you financially successful.  But facts are facts.  We can tell you that the key to financial success is “spending less than you make, saving, and investing” – every financial planner does – but it’s up to you to put that lesson into practice.  The question is simply, why don’t more “college-educated” people follow that advice?)

19. What does Prof. Schor mean when she claims that, “The intensification of competitive spending has affected more than family finances. There is also a boomerang effect on the public purse and collective consumption”?