Tag Archives: work

Stop buying crap you don’t need now and retire 4 years earlier!

In this post I continue my statistical critique of the ordinary life of the everyday worker-consumer. This is done through comparing a hypothetical 35 year old who earns the median salary and has average expenditure to a hypothetical construction I call the frugal-consumer who spends as little as possible without completely cutting themselves off from society. The expenditure levels of the former effectively tie them into working for a further 33 years until the current projected standard retirement age of 67-8, while the later, assuming they maintain their frugal levels of consumption, will be able to retire when they are 52-3, or 14 years earlier, or in half as much time as the average-consumer on the average wage.

Here I consider spending on Consumer Frivolities (see previous posts for other categories of expenditure).

The average-consumer spends £216.71 a month on what I call consumer frivolities, which includes unnecessary expenditure on restaurants and hotels (£73.15), furniture and furnishings (£51.48), ‘miscellaneous goods’ (£69.33), which in the ONS family spending survey mainly consists of beauty products and jewellery, and finally recreation and culture (£111.06), which for most people means the cost of purchasing audio-visual equipment and subscriptions to various services, and also includes the cost of entrance to things such as cinemas, concerts and festivals.

Over the course of one year this amounts to £3,933 and maintaining this for another 33 years will cost £129, 798,  which represents 6.0 years working earning the median salary.

So what does the average person get for this £129, 798, or 6 years of toil? Most people would say it’s hard to generalise, because the consumer gets what ever they want for the money they’ve got, assuming the market can provide it. Some people will choose a house full of antiques, others a house full of gadgets, and stilll others closets full of clothes and  boxes full of jewellery. Increasingly likely, though is that money will be spent not on stuff, but on experiences, such as playing the dating game, or weekends away and longer holidays, supplemented by such products as fake tan and sun cream to prevent an actual sun tan.

To many people, such consumerist experiences are the very purpose of life: the products we buy define us, mark us out, and the events we purchase play a crucial part in our weekly, monthly and yearly life-course – they are things we look forward to, and back on, the events which help to maintain and define our relationships with our friends and family and give us something to talk about at work, other than work.

I’ve managed to resist the urge to be utterly cynical about the role which consumption plays in most people’s lives, because just recently I’ve come to perceive most ordinary consumption as tragic, and in this context cynicism seems innapropriate. Those people  who define themselves through their stuff become tied to it (and possibly require a bigger house in which to stuff their stuff), and for those who define themselves through their experiences, it seems to me that the way in which many people consume such events involves them not really being present because they’re too concerned with acting for the sake of sharing the experience via social media, and for me if you’re not actually present, then you’re not really even alive.

Ultimately such unnecessary consumption costs the average-consumer on the median salary 6 years of their working life. In contrast to this the frugal-consumer rejects the trivial, shallow and short-lived fake-joys of consumerism and instead engages in meaningful, productive and either free or very cheap activities when not working.

The frugal-consumer is not, however, an anti-consumer, and maintains an expenditure level on ‘consumer frivoloties’ which allow them to avoid being completely cut off from ordinary society. This is mainly because I could not, hand on heart, say that I am ever likely to cut out consuming frivoloties all together myself, cut down radically yes, cutting out altogether, highly unlikely.

The frugal-consumer spends just £60 a month on such frivolities, allowing for £20 a month on restaurants and hotels (so basically no hotel stays and one trip to a restaurant a month), £20 a month on furniture and furnishings, given that this category includes spending on basic household items such as hoovers, a further £20 for ‘miscellaneous goods’ because everyone needs a little something extra, and a whopping £30 a month for recreation and culture. This amounts to an annual expenditure of £1080 a year, a total of £35 640 over 33 years, representing a saving of £94 158 or 4.33 working years of working at the median salary compared to the average-consumer.

NB If this looks unrealistic, or even unbearable, something like the bottom fifth of the U.K.  in terms of income live such a life out of necessity rather than as part of an early-retirement strategy, so it is possible.

References

http://www.ons.gov.uk/ons/rel/family-spending/family-spending/2013-edition/index.htmlhttp://www.ons.gov.uk/ons/dcp171776_335332.pdf

Andrew McAfee – The Future of Jobs (summary)

In this TED video, Andrew McAfee makes some predictions about the future of jobs.

 
His overarching prediction is that very soon, technological advancements will result in fewer people doing jobs in the following sectors.
• Driving
• Customer server reps and trouble shooters
• People working in warehouses.
He does point out that people have been predicting mass technological unemployment for about 200 years, but this time it’s different because today’s machines are acquiring new skills such as being able to listen and speak.
Our future world, what he calls the new machine age, is one in which there is more technology and fewer jobs. He argues that this is a good thing because…
1. This allows us to continue the trend towards increasing productivity and lower prices.
2. Once androids are doing the work, we are freed from drudge labour,

McAfee is optimistic about the future. He argues that when more people are freed by technology, this allows us to imagine a totally different society – One in which entrepreneurs, financiers, and artists etc. come to together to imagine alternative futures. He even goes as far as to say that he agrees with the following words of Freeman Dyson….. ‘technology is a gift of God. After the gift of life, it is perhaps the greatest of God’s gifts. It is the mother of civilisation, of the arts and of the sciences.
He then poses the question: What could possibly go wrong?
Firstly, he says that the economic contradiction between increasing returns to capital and decreasing returns to labour that accompanies technological revolution still hasn’t been resolved – this is the same problem as Henry Ford realised a century ago – that decreasing wages means less demand, which is ultimately bad news for capital.
Secondly, he points to the social problems might emerge as we live in an increasingly polarised society in which more people are ejected out of the affluent middle classes. To do this, he invents two typical workers, Bill and Ted. Bill has no college education and is either employed in blue collar or low level white collar work, while Ted is college educated and works in a higher end professional job.

Through a series of graphs (that remind me of The Spirit Level), we are now shown that while Ted has maintained his social position in most respects after the first, Bill now faces a bleak future of increased marginalisation from the increasing wealth being generated…
1. He earns considerably less,
2. He is far more likely to be unemployed,
3. He is less likely to see his children go on to be upwardly socially mobile,
4. He is much more likely to go to jail.
5. He is less likely to vote.
This trend, of blue collar jobs disappearing is not likely to abate any time soon, because it is precisely such blue collar jobs that are under threat from new developments in technology.
One proposed solution to this is a guaranteed national income, which, he points out is far from being limited to Socialism, was in fact championed by the likes of Hayek, Freedman and Nixon.
He rounds of by saying that his biggest fear is that we could face a future in which we have glittering technologies embedded in shabby societies, supported by an economy which generates inequality rather than opportunity.
However, McAfee doesn’t think that this will happen because of growing awareness of the true nature (the ‘plain facts’) of the problems that we face and that this will result in a future of new technologies being used to allow greater numbers of people access abundance.