How Come Everyone Is so Poor?
Last week yet another public opinion survey reported that only 24% of Americans believe the economy to be in good shape, a number which is down from 30% the previous month. This survey was conducted by NORC, a polling company which is much more respected than the polling outfits hired by the political parties who usually just tell their clients whatever they want to hear.
Maybe I’m just so far removed from the reality of daily life that my understanding about current affairs is totally and completely out of whack, but I don’t remember a time when everyone had a job, that unskilled jobs were paying a lot more than minimum wage, and that the parking lot in front of every shopping mall is completely packed.
There is also endless talk about the high rate of inflation continues to take its toll on everyday life, with only 73% of respondents to a Federal Reserve survey saying that they are doing okay, which is the lowest number claiming to be living comfortably since 2016.
If one out of every four Americans find themselves living less comfortably than they would like to live, no wonder why a large majority of the country’s population believes that the economy isn’t behaving the way it should.
But any time we try to understand why people feel their financial expectations aren’t being met, we also need to understand the degree to which their expectations can be framed in realistic terms. This task is made more explicable with reference to data from the government’s Bureau of Economic Analysis (BEA) which tracks how much we spend each month broken down into specific product and service categories.
In April 2023, Americans spent $18.2 billion, of which $2.2 billion went for durable goods like cars, $529 million on household furniture and furnishings, $652 million on recreational durables like televisions and video/audio equipment and $295 million on jewelry, watches, and eyeglasses. We also spent $3.847 billion on food and beverages, including $188 million for wine, liquor, and beer. Clothing was another $489 million, gasoline and other energy cost us $449 million, and all other nondurable goods were $1.5 billion, including $100 million for non-prescription drugs, 98 million for pets, $185 million for personal care products, $102 million for tobacco and $95 million for newspapers and periodicals.
Now let’s look at services. Try $2.9 billion for health care, $3.1 billion for housing and utilities, $585 million for transportation costs, $663 million for club memberships, event admissions, gambling and $66 million for veterinary fees. Eating and drinking away from home cost us $1.351 billion, of which $155 million was what we paid to sleep in a motel.
Finally, together Americans spent $1.392 billion on insurance, $283 million on those cell phones and TV hookups, $326 million on sending the toddlers off to daycare and the teenagers off to college, $194 million for tax preparations and $76 million in hairdressing salons, among other personal expenditures for services.
Note again that all the numbers listed above is what Americans bought for one month. Multiply each of those numbers by 12 and you begin not get an idea of the size of this country’s economy. Do you think there’s any other country in the entire world whose inhabitants spend $1 billion on haircuts and perms every year? Is there any other place in the world where the annual cost of pet food exceeds one billion bucks?
We will spend $3.4 billion this year on the communication gear we use to send videos around on TikTok or get the latest and greatest email alerts from Five Below on a one-only sale. None of this equipment even existed twenty years ago. And why did I replace four TV channels that didn’t cost me anything for 900 channels which cost me $135 monthly and which I never watch?
Don’t get me wrong. I’m not saying that we have eliminated poverty or that there aren’t people and households in this country who continue to experience extreme difficulty making ends meet.
But what the BEA data clearly indicates is that much of the so-called dissatisfaction with economic circumstances registered in those polls reflects the frustration that people feel because they can’t just go out on a weekend and buy some more crap.
Much of which, incidentally, winds up in the front yard with a sign which reads – ‘free.’