Everything’s relative, now isn’t it? A column from the Trib’s Phil Rosenthal makes that point, while exploring why it is that during our ongoing economic woes, today’s consumers feel as inclined as ever to treat themselves to minor indulgences, such as Starbucks. Older generations, by contrast, who have experienced much deeper financial crises, would scoff at the idea of paying $3 or $4 for a latte.
Much of the column draws off the wisdom of Yarrow, author of Gen BuY: How Tweens, Teens, and Twenty-Somethings Are Revolutionizing Retail, quoted here:
“Frugal is a relative word,” said Kit Yarrow, a consumer psychologist, author and professor at Golden Gate University. “The most miserly people in the United States right now would look incredibly self-indulgent by the standards of the U.S. 100 years ago. So it’s relative. Compared to 2007, they probably are frugal.”
“We’re in a cultural transition and that’s why I think it looks a little (inconsistent),” Yarrow said. “Everybody’s in the process of re-evaluating and learning about how to adjust their frugality monitor.”
The relative nature of frugality reminds me of an awesome question posed by NPR not long ago: Would you rather make $70K per year in 1900 (when you’d be super rich and live in a mansion), or make $70K per year today (when you’d be middle-class, but wouldn’t have cable TV, A/C, and other modern amenities, and wouldn’t have to worry about things like polio circa 1900).
Of those polled, two-thirds said that it’d be better to be middle class today than ultra-rich a century ago.