The signs seem to be everywhere: We are becoming a more frugal nation that needs to be fed deals and discounts as we plow through increasingly difficult financial times.
According to a new report by the Associated Press, frugality is the now the new norm in America and it stems from necessity. We are working less and earning less while the costs of food, schooling and housing remain pressing obligations we struggle to meet. So everyone seems to be cutting back across the board – white collar, blue collar, affluent, illegal.
The report finds consumer spending will never return to pre-recession levels, unlike what we witnessed after all other recessions since World War II when thriftiness took a back seat to the demand for new cars and shiny goods.
But this recession has taken such a huge bite out of spending and our old ways, Baby Boomers are unlikely to return to the affluenza that got us here in the first place. While the new frugality is good for the family budget and the planet, it is hurting the national economy including everyone associated with the housing market (sellers, contractors, laborers, suppliers) as well as gardeners, handymen and domestics.
And anyone who hangs at the local mall has seen how quiet things are, as shoppers buy what they need and buy it on sale rather than loading up on seasonal items they can do without.
The auto industry has seen a huge decline, from sales of cars and trucks averaging 16 million a year in boom times to a recession level of 10 million a year. The result could be further consolidation among auto makers and a loss of new vehicle taxes that aid state and local governments.
The report cites a Gallup survey taken last month which found seven in 10 Americans are cutting weekly expenses consistently through the summer. This is linked to the worst downturn since the Depression with unemployment currently at 9.7 percent and rising to double digits before the end of the year. Those who have jobs are earning less and have lost sizable percentages of their investment nest eggs.
We have always seen frugal behavior in some Americans, those wise enough to save more than they spend, to reuse what they can, to eat leftovers and take public transportation, turn off the lights and the heat and air whenever possible. Without even knowing it, those people are the real deal when it comes to being green. And now as the rest of us jump onto that bandwagon, they can proudly say, “I told you so.”
Image: timparkinson