When People Had Paychecks

Outside of the obvious dichotomy of some people having jobs and other people NOT having them, lies another issue that is changing the mindset of Americans across the country. We are no longer able to count on paychecks coming in, and even dividends from investments may be reduced or completely removed from the annual income. Add to that a generation whose has seen their dreams of retirement go up in smoke. What does that do to the American psyche?

Retailers are noticing a bump in sales for the past 4 months over the course of the current recession, but this is mainly for “necessary” items—kids needing clothes they have outgrown, or people needing to look recent at work, or people buying clothes in hopes of finding new jobs. This is not the “discretionary spending” we’ve seen in the past. It may be the our consumer economy will be re-calibrated permanently, with more money going to personal debt reduction—or saving for retirement—or for cash outlays for things we previously put on credit. It will not be for that riotous spending we have done in the past—if we were lucky enough to engage in riotous spending.

So far, this has not resulted in widespread lower pricing, and certainly gas prices are not helping matters, with more money going to energy so that less can be spent on everything else. As a result, restaurants, entertainment, and tourism may be depressed for many years to come.

So where is the American economy going? Right now, it seems at a standstill, with movement apparently going in a retrograde motion to undo past mistakes. That is going to be a difficult prospect for many Americans. No more will there be automatic reliance on that next paycheck coming in as sure as the night follows the day. It is likely jobs will continue to be shaky as long as that retrograde action continues. And it may be true that America seems a kind of Lost Decade that Japan experienced a short time ago.

Until the corrections within the American economy are completed, we will all endure a kind of consumer “suspended animation.” Pent-up demand might take on a different character. Maybe it will make consumption more thoughtful in the future.
Maybe we’ll even become less materialistic—as we so often speak of, but so seldom actually do.