Saved by the Closet
We've got so much stuff that it's easing the slump.
The Wall Street Journal, "Commerce & Culture" , October 23, 2010
Americans have a lot of stuff—so much, in fact, that getting it under control has become a major cultural fantasy. Witness the Container Store, whose aisles of closet systems and colorful boxes peddle dreams as seductive as any fashion shoot. Or consider shows like "Clean House," on the Style Network, where hosts cajole, browbeat and bribe homeowners into getting rid of half their things and organizing the rest.
Over the past few decades, as businesses have learned to streamline their inventories, American households have done just the opposite, accumulating ever more linens and kitchen gadgets, toys and TV sets, sporting goods and crafts supplies. "Because of all the shopping we've done, many of us now own lots of great stuff we never use anymore. And for some reason, we don't sell or give it away," says GiveYourStuffAway.com, promoting an annual day for leaving unwanted items on the curb for neighbors to cart away.
In today's sour economy, however, what once seemed like waste is starting to look like wealth: assets to draw on when times get tough (and not just because of all those ads promising top dollar for your gold jewelry). Material abundance, it turns out, produces economic resilience. Even if today's recession approached Great Depression levels of unemployment, the hardship wouldn't be as severe, because today's consumers aren't living as close to the edge.
Take clothes. In 2008, Americans owned an average of 92 items of clothing, not counting underwear, bras and pajamas, according to Cotton Inc.'s Lifestyle Monitor survey, which includes consumers, age 13 to 70. The typical wardrobe contained, among other garments, 16 T-shirts, 12 casual shirts, seven dress shirts, seven pairs of jeans, five pairs of casual slacks, four pairs of dress pants, and two suits—a clothing cornucopia.
Then the economy crashed. Consumers drew down their inventories instead of replacing clothes that wore out or no longer fit. In the 2009 survey, the average wardrobe had shrunk—to a still-abundant 88 items. We may not be shopping like we used to, but we aren't exactly going threadbare. Bad news for customer-hungry retailers, and perhaps for economic recovery, is good news for our standard of living.
By contrast, consider a middle-class worker's wardrobe during the Great Depression. Instead of roughly 90 items, it contained fewer than 15. For the typical white-collar clerk in the San Francisco Bay Area, those garments included three suits, eight shirts (of all types), and one extra pair of pants. A unionized streetcar operator would own a uniform, a suit, six shirts, an extra pair of pants, and a set of overalls. Their wives and children had similarly spare wardrobes. Based on how rarely items were replaced, a 1933 study concluded that this "clothing must have been worn until it was fairly shabby." Cutting a wardrobe like that by four items—from six shirts to two, for instance—would cause real pain. And these were middle-class wage earners with fairly secure jobs.
Thanks to our bulging closets, over the past couple of decades, clothing has become a much more discretionary good. New purchases are as easy to go without as restaurant meals or entertainment (which consumers can similarly get from their accumulated stock of DVDs, games and music).
Larger consumer inventories don't just increase variety. They reduce the wear and tear on each individual item, extending its useful life. So doing without new purchases doesn't mean "going without." When you own 11 pairs of shoes—the national average including both sexes, according to a 2009 Kelton Research survey—you're unlikely to wear the soles down so far you need cardboard inserts.
Some things, of course, don't lend themselves to stockpiling. Consumers may switch to cheaper brands, but they don't stop buying food and toilet paper—or cellphone service. In the first year of the recession, consumers were more than twice as likely to cut back on apparel or consumer electronics, a Booz & Co. survey found, as they were to reduce cellphone service. The Great Recession may accelerate the economy's move from tangible to intangible goods, as consumers shift their spending from new shirts and shoes to health care and broadband connections.
This doesn't mean that we don't want new things or won't buy them when we can. But we may be more selective. There's nothing like having to shop in your closet to make you more discriminating about what you put into it in the first place—and more grateful for all that stuff.