I don't know about you guys, but one of my favorite days of the year has always been Black Friday. I mean it's a day all about getting more for less, and at the end of the night going home happy with more material goods than when you left your house right? It's the biggest day of shopping in the US, and according to CNBC, more than 165 million people were expected to shop in 2019. That's more than half of the entire US population! In a CNN article following Black Friday 2019, it was reported that Americans spent $7.4 billion in ONE day. This set a new record.
Now let's get to the fundamentals behind it all: What is Black Friday built upon? Consumerism. This is the concept that society is always seeking to acquire more material possessions, and that this is a good drive for both the economy and people's wellbeing. After learning that concept, doesn't it make sense that the biggest day of consumer spending, Black Friday, is built on consumerism?
We can start by unpacking the first concept: consumerism is great for the economy. This appears to be a no-brainer, because obviously consumers spending more money acquiring goods brings more money into supporting the economy right? It's a bit more complicated than that. Yes, in the short term consumers like you spending money in surplus, especially on a day like Black Friday where majority of the US is doing it too, benefits the economy greatly. This can be explained by simple supply and demand -- hundreds of millions of consumers demand more goods, so the supply produced increases greatly, meaning the businesses putting out these goods make a lot of money.
However in the long term, excessive consumerism could be bad for the economy. Remember that the economy isn't just accounting for the money businesses have, but also the money that consumers have to spend on them. Many Americans can develop a bad habit of overspending and accumulate unsustainable debt, which essentially means that their input of income is not enough to balance out or maintain their output of spending. Black Friday singlehandedly contributes to this phenomenon, seeing as it's the biggest shopping day for Americans and they get as much as they can because the deals are the best.
According to credit.org, “the average consumer owes $9,000 in [credit card] debt.” Debt can be really debilitating to people and the economy if it accumulates like this, and it would definitely contribute to the fragility of the economy if there were an economic downturn or recession taking place. When people have debt, they can’t continue spending on products right? This is true, but the figure above is kind of misleading because it’s talking about the average consumer, not the median consumer. The median consumer is only $2,200 in debt, and this statistic comes from the fact that there are more people with no debt at all (more than 50%) than those with debt. This means that although the economy would take a hit by losing the smaller percentage of economic growth caused by consumption of those in debt, there are also a lot of people whose spending habits won’t change because they are sustainable and paid off on time.
So, how does all of this affect YOU? Well that’s easy: you’re a consumer! It’s beneficial to be educated on how excessive consumerism could hurt you (potential debt) and the economy (less consumption, downturn/recession). Knowing the advantages and disadvantages of a good sale, and why consumerism is at large in the sale, will help you make more sustainable decisions in the future.
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