Barely a day goes by without some report about how people in industrialised countries are coping with the Great Recession. Where it was once possible to think of only a few people and places being badly affected, that is no longer true, as the negative effects spread widely nationally and also internationally. Wall Street’s woes have affected Main Street badly. The impact of so-called peripheral countries’ debt and other financial problems have quickly spread to those countries that were supposedly in good health.
At the level of what individuals are doing to cope, much of the focus is on saving money and making the most of whatever money you have. I recently read ‘Living Well in a Down Economy for DUMMIES’. It contains a lot of useful information for those who are still in jobs, unemployed, young, old, students, and more.
Many reports flag that the young have been especially hard hit by the downturn in economic activity over the past five years. The generation of young people (and their current and future families) who are passing through this period are likely to be economically scarred for life. So far, consistent and persistent protest movements have been slow in showing their face, though the Occupy movements that have grown in recent months may mark a change. I have noticed that more reports are focusing on the negative social and psychological effects on those who have been hit by hard times.
Much focus has been put on the middle classes and whether they are under severe threat, not to dismiss the persistently difficult situation of those who were not middle class or have been living through tough financial times whether the economies were thriving or not. But in the minds of many, and especially in the minds of politicians, the threat to the middle class may pose a bigger threat to social stability and the search for the support of this group may determine many political strategies.
The term ‘middle class’ is ambiguous, but could be interpreted by many as covering persons who usually have a comfortable standard of living, significant financial security, considerable work autonomy and rely on their expertise to sustain themselves. Living in the area in and around Washington DC, it is easy to see many people who would fit into this view of the middle class. It is a group that is essentially made up of ‘white collar’ employees, and tends to have a greater proportion of people who are highly educated, meaning college graduates. When you look around, despite the statistics that indicate harder economic times, it is not necessarily highly visible. A report in the Washington Times late last year suggested that Washington DC is insulated by the high level of federal government spending that affects it.
People in the wider metropolitan area are trying to hold on to their life styles. For example, many restaurants seem to be doing good business. But, it is hard to know if this means that the restaurants are still keeping their heads well above water. The received wisdom is that 80-90 percent of restaurants fail in their first year. It is a business that survives with a lot of low wages jobs, and profitability may be low and hard to sustain. In the current, prolonged recession, diners may be showing more selectivity, and quality eating and drinking establishments may be thriving, but others that are just average may be teetering. Or, it may be those places that seem to offer better value for money which are really making it. Nevertheless, people are creatures of habits and may maintain that when it comes to eating out. It would be interesting to know how broader dining habits are changing. For instance, is lunch time business holding up better than dinner business; are people making fewer repeat visits; splitting dishes; spurning alcoholic drinks; tipping less; economizing in various ways?
Vehicular traffic in the area suggests that whatever job losses have occurred, these seem to have had little impact of the volume of cars and trucks on the road. Metro (bus and rail) ridership fluctuates but remains high, at around 1 million each weekday. The system is expanding and it appears that more people will try to use metro as the system expands, especially as a welcome relief to the area’s horrible traffic delays. Residential development around areas well served by Metro has been noticeable, even in areas that were previously shunned as being socially, economically and physically less attractive.
Anecdotal evidence of how people are coping with job losses and tighter financial situations is interesting. Perhaps, it is a case of reticular activation syndrome, meaning that we tend to see what we think about more, but it seems that people are searching out money savers. Discounts are not just for those who are at the bottom of the economic ladder: we know that the rich like their tax break, too :-). I see plenty of coupon cutters in grocery and department stores. I hear more people talking about schemes such as Groupon or LivingSocial, making good use of national and local deals: getting something for half the usual price makes sense, especially if it something you were inclined to buy anyway. True, the pattern of deals may not be the same in this area as in other cities, but catering well to local needs is part of a good business model. More generally, I notice that people are seeking out discounts by shopping more selectively (including browsing with their eyes more than spending), in physical shopping areas or using their good access to the Internet to find deals online. I have heard well-heeled executives in this area talk more openly about “never paying retail” and “only buying when good sales are on”. The mobile device revolution has helped greatly in this regard and the cost of such a device can easily be recouped in savings that are available from using it. Applications such as Gasbuddy fall into that category: it’s worth a lot to know where nearby you can save 10 cents or more on a gallon of gasolene. The price-conscious shopper is also more readily turning toward thrift and consignment shops. The budget-conscious are also seeking out more ways to generate income from things they no longer need, whether through barter, Internet market sites such as eBay, Craigslist, or Amazon. The budget-conscious are also being leery of accumulating or carrying debt, as greater uncertainty argues for more caution about future ability to pay.
We’ve seen reports about family strains and stresses, and the trend toward the ‘boomerang generation’, with adult children moving back to live with their parents, a trend likely to rise with the very thin job prospects for recent graduates. Just yesterday, there was another segment on NPR’s Diane Rehm Show on the topic. Whatever financial benefits there may be, what will it do for the ability to develop social and financial independence? Is it making people rethink what it means to be a family and whether separation or distance when children reach adulthood will be less the norm?
People’s faith in general and their faith in the economic systems seem to have been little dented. Some may merely be holding onto their religious faiths as a last bastion, becoming even stronger in their conviction that (their) God will provide.
As Christmas approaches, I am wondering what tidings of comfort and joy people will hope to take into the new year. It’s hard to think of many.