I had an epiphany the other day after I was laid off from my job. I knew this was going to happen eventually because they hired me under the pretense that I would only be there for "seasonal help."After the holidays, there was a noticeable difference between the amount of customers that were coming into the store. Now, my job usually consisted of standing in one room and making sure every article of clothing remained in its perfect spot at all times. That's usually something you tend to overlook when you walk into Hollister. However, this always gave me a lot of time to think. Hollister was going to fire me because their store couldn't afford to keep all of their employees on staff. They couldn't afford it because people weren't spending enough money in their store. Less people were coming in, so Hollister decided to mark up its prices to account for this. Their revenue might've remained at a reasonable rate, however, they were starting to lose customer loyalty. Regardless of how 'cool' their brand might've become in our society, no one in their right mind is going to spend fifty dollars on a fucking t-shirt.
But I wondered why the number of customers in the store was decreasing. I remembered one of my favorite South Park episodes, Margaritaville, where they try to encourage people to spend more money (rather than save it) to stimulate the economy. Now this made perfect sense to me. Spend money at our store so Hollister can afford to pay me so I can spend money in other stores. That's basically how this whole thing works. Their idea behind the episode was that people were getting scared by terms like "the recession"in the media and over-reacting by getting frugal with how they spent their money. And even that made perfect sense, as well. If you save your money, you'll have more money to spend in the future. "A penny saved is a penny earned." However, I started to think that it wasn't because people were getting scared by the big words in the media. They weren't that stupid. It was because people were beginning to have more priorities in their expenses and those priorities weren't getting any cheaper.
Your purchasing power (or basically the excess money you can use to help stimulate the economy) is measured by your income minus the cost of living. Now when the cost of living first begins to increase, logically you will have less money to spend on the things you don't necessarily need. This began to occur from an exponential inflation for a number of things: tuition, rent, necessities like food and clothing, gas, oil, health care, entertainment, phone bills, etc. When this happened to everyone, businesses started to lose money and could not afford to pay all of their employees. Your income either gets cut significantly or you lose your job.
People are always saying that the solution is to increase the number of jobs for people so more people have money to spend. But that's not exactly true. The cost of living needs to become cheaper first before we can spend the money we have left. Without that, businesses will have no money to provide you with the money you need to live; no matter how hard you work for them. And you wonder why kids today grow up with dreams of becoming movie gods and rock stars. Getting ridiculously rich, fast, just seems safer than working up from the bottom of a cubicle, only to get laid off by the CEO's who need more money to pay for their kids to go to college. In the 1970's, it used to cost my parents around $2,000 or less to go to college every year. Today, it costs some people around $55,000 (or more) to go to school per semester. The people who's cost of living greatly outweighed their income, but still desired to pay for their children's education (so that they could get a high income job when they get older), took out ridiculous loans from banks they couldn't possibly hope to pay back in a reasonable amount of time. The annual interest rates probably wouldn't help either.
Anyway, my point is that our necessities are starting to outweigh the amount of money that we're able to bring in. For our economy to see the light of black again, the things that we need to have, need to become cheaper, first. If only the room full of rich, white men in Washington could understand the problems of their people.
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