Consumerism: Affecting Families Living in Poverty in the United States

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Table of Contents

Introduction
Consumerism
Advantages of Consumerism
Disadvantages of Consumerism
Conclusion
Reference List

Introduction

Consumerism refers to customers’ social and economic tendencies that encourage them to purchase goods and services in huge amounts. Consumerism is an unhealthy economical habit that often results from economic influence among peers. Studies show that most Americans go for shopping not because they are in need of what they want to buy, but mostly due to influence by other shoppers, most of whom are friends and peers. Middle-income earners are the worst hit by consumerism.

They spend a lot of money on goods and products that they do not necessarily need or rather they do not require at a given time. Rich people, on the other hand, mind about the necessity of what they spend their wealth on, and thus they are not easily influenced by the trend of consumerism in the society. Consumerism affects poor people negatively in various ways.

Poor people depend on middle-income earners and the rich for their economic survival. On the other hand, middle-income earners fall victims of consumerism and often diminishing their ability to support the poor. Hence, there is an increased enlargement of the economic gaps between the poor and the middle-income earners in the United States. This paper highlights other factors that negatively affect poor families due to consumerism.

Consumerism

Consumers ought to be informed decision makers before they get to the market place. However, the majority of them do not make decisions prior to getting to the market place, and thus they fall into consumerism behavior. Sellers are fully aware that a majority of the people make decisions upon what to buy once they get to the market place.

With this insight, sellers initiate and propagate product promotions and advertisements of their goods and services in the presence of a consumer who has a high chance of purchasing a product that was previously unknown to him or her. This ideology led to the emergence of opportunistic market players, often producers of low quality products, with assurance of selling their products to the buyers.

Hence, leading to the arising of consumerism protection acts and policies designed to protect consumers from dishonest sellers and producers, which indicates the high degree of consumer’s ignorance, and hence failure to make decisions of the goods and services that they need before getting to the market place. The majority of consumers rely on the product information given by the manufacture and they care little about the test results of the same product (Tyagi &Kumar, 2004).

Advantages of Consumerism

Economic Development

Consumerism leads to economic growth and development of the world’s economies. It leads to increase in demand for goods and commodities in the market, hence attracting new producers and suppliers. Consequently, there is the creation of many job opportunities and improved living standards of many citizens in an economy (Goyal & Goyal, 2011).

In addition, consumerism leads to globalization due to increase in demand of goods and services in the international markets. Globalization leads to economic development due to increase in the market size of local products, export duties, and outsourcing of local products. A good example of a country that has benefited much from globalization is China. The majority of the Chinese producers specifically design their products for export purposes due to the presence of higher international demand as compared to the local market.

Growth and Development of Companies

Consumerism is an important factor that leads to the growth and development of companies in the world economies. The ultimate goal and objective of a business organization is the maximization of profits. Maximum profits are realized from a large market that comprises of buyers ready and willing to buy products and services of the company.

Consumerism increases demands for products and services, and thus the presence of a potential large market. Consequently, small companies increase their production capacity in order to meet the demands of customers. In addition, more job opportunities are created to meet the large production capacity in the increased companies.

Production of Quality Products

Consumerism leads to the production of high quality products. Due to increase in demand, more companies producing goods and services for the same market come up leading to increased competition in the market. Some companies opt to improve the quality of their products in order to achieve a competitive advantage over other competitors (Hill & Gaines, 2007). However, the product price does not change much in order to attract customers, which is a benefit to the customers acquiring a high product at an affordable price.

Increase in Production Innovativeness

As companies opt to produce high quality products at an affordable price in order to acquire competitive advantage, they employ innovation in ensuring that the produced products are far above the reach of competitors.

The production innovation process requires a company to hire a research and development team that researches on the needs of the potential customers and evaluates the cost of production. In addition, the product undergoes a series of evaluation once released into the market, which implies that consumerism leads to the creation of new jobs in the process of innovative production in the companies.

Disadvantages of Consumerism

Consumerism has many disadvantages that include:

Competition

Consumerism causes an increase in competition amongst producers. Competition has various negative impacts to business organizations. First, companies are forced to lower the product prices in an effort to attract more customers in the market. According McGregor (2007), more often, the cost of production exceeds the returns, hence leading to the making of huge losses and eventually exits from the market.

Secondly, exiting of a company is a loss for an economy because some people lose their job opportunities leading to increase in the poverty levels in a country. On the other hand, the government loses a source of revenue for the exited company no longer pays tax to the government (Gould, 2003).

Use of dishonest product promotion and advertising methods

Due to stiff competition courtesy of consumerism, producers opt to develop attractive forms of advertising their products in order to acquire a competitive advantage over their competitors. In most cases, customers are deceived that the product in question is of high quality, which turns out to be a ploy once a customer purchases that product. The most common deceiving method of advertising is use of photo-enhanced images.

Photo-enhanced images are very attractive as compared to natural images. Therefore, producers take advantage of such photos’ attractiveness to attract potential customers who believe that the product has the ability to bring forth the desired results according to the advert representation (Sandlin et al. 2011).

Beauty and cosmetic industries are the worst hit by the fake advertisements saga. Most companies use photo-enhanced images of beautiful women in the advertisements, and are effective in serving the intended purpose for vulnerable customers, especially young women, throng into beauty shops to purchase those products (Lange & Meier, 2009).

Consequently, such products do not meet the needs of the clients, hence frustrating them to make a loss and losing trust in the industry. There has been controversy in the United States markets concerning the use of photo-enhanced advertisements whereby the Dove Corporation, a beauty and cosmetic firm, is sensitizing customers about the extreme use of photo-enhanced images in advertisements by producers, and advising them not to rely on the information portrayed through such advertisements (Sandlin et al.2011).

The company uses natural images for advertising its products and it has been doing well in the market since it adopted the trend. This trend is a result of increased demand for products due to consumerism.

Environmental Degradation

Consumerism is the major source of environmental degradation in the world. Consumerism leads to the acquaintance of goods that are not necessary for the buyers’ needs and end up being disposed, hence degrading the environment when handled inappropriately. Research shows that much of the garbage in the United States is electronic, textile, and other luxurious products, which the owners dispose after acquiring their replacements (Miles, 2008).

In addition, due to consumerism, the world has witnessed a rapid increase in the number of emerging companies. Most of these companies are active environmental polluters through the ways in which they dispose their effluents into the environment. Some companies produce much noise that affect the serenity of the surrounding environments leading to noise pollution.

Poverty and Economic Dualism

Consumerism causes poverty on various ways, thus affecting the family lives of poor people. First, due to industrial competition, some people lose their jobs after some companies exit the industry. On the other hand, product prices continue to shoot up as consumerism increases. Increase in consumerism leads to inflation, which government controls by increasing the prices of basic commodities.

Consequently, the poor people suffer more than the middle and upper income earners in the society. Such a situation leads to economic dualism like is the case for the Indian society (Khan, 2010). Increase in consumerism implies an increase in the purchasing power, and often the economists and government agencies generalize this ideology forgetting the fact that poor people have low purchasing power.

Due to increasing purchasing power, small enterprises such as retail shops close down to give way for bigger enterprises such as supermarkets and chain stores. These enterprises have uniform product prices, whereby an upper class person buys at equal price with the poor. This scenario has been the trend in the economic growth of the United States and has resulted to the poor becoming poorer day-by-day (Kangun & Richardson, 2011).

Effects of Consumerism to Middle and Upper Classes Individuals

Middle class individuals are rated the worst hit by consumerism. They spend a lot of money on goods that are not of much necessity to their lives.

According to financial analysts, the increase in the population of middle-income earners leads to increase in consumerism in any given economy across the world. Middle-income earners spend much of their money, leaving little to save due to the assurance of job security and other benefits.

In the modern society, middle-income earners are mostly young individuals of ages between 20 and 45 years, which illustrates why they are associated with spending rather than saving. At this age, an individual wants to acquire whatever pleases him or her if there is money to acquire such an item unlike at old age when a person lacks interest in acquiring pleasing commodities. Hence, consumerism deteriorates the ability of middle-income earners to save and invest their money for future benefits.

The worst-case scenario often occurs when a middle-income earner spends more money than s/he has, which implies that a person acquires a loan to purchase a commodity and to service a debt that is more than his or her ability to repay. According to financial analysts, middle-income earners (the majority are spendthrifts) rate the highest in the bankruptcy cases due to acquaintance of loans that are far above their ability to repay. Hence, consumerism has resulted to some middle-income earners becoming bankrupt.

On the other hand, consumerism also affects the upper class individuals. Upper class individuals are rich people who have invested their wealth and are often employers. Consumerism affects their wealth due to various factors, which include inflation, high cost of production, and increase in commodity prices among others. Inflation lowers their value of investments thus forcing them to make low profits or losses in the worst-case scenarios.

As producers, upper class individuals incur high costs of production due to increase in competition caused by consumerism. In such a case, they make losses and often exit from production if their companies fail to withstand stiff competitions. On the other hand, increase in the commodity prices affect them too, which makes them to spend more than they intend (Easterling et al., 1995).

Conclusion

Consumerism should be discouraged in an economy. It increases the gap between the poor and the rich. Poor families continue to suffer more as consumerism increases, middle-income earners continue to spend more and save less as consumerism increases, and finally the upper class individuals continue to spend more than they intend, hence diminishing their investments as consumerism increases.

Reference List

Easterling, D., Miller, S., & Weinberger, N. (1995). Environmental consumerism: A process of children’s socialization and families’ resocialization. Psychology and Marketing, 12(6), 531-550.

Gould, N. (2003). Fair trade and the consumer interest: a personal account. International Journal of Consumer Studies, 27(4), 341-345.

Goyal, A., & Goyal, M. (2010). Business environment. New Delhi, India: V.K. Publishers.

Hill, P., & Gaines, J. (2007). The consumer culture of poverty: behavioral research findings and their implications in an ethnographic context. Journal of American Culture, 30(1), 81-95.

Kangun, N., & Richardson, L. (1978).Consumerism: New challenges for marketing. Chicago, IL: American Marketing Association.

Khan, S. (2010). Socio-economic change in India. New Delhi, India: APH Publishing.

Lange, H., & Meier, L. (2009).The new middle classes: Globalizing lifestyles and consumerism. London, UK: Springer Publishers.

McGregor, T. (2007). Consumerism, the common good, and the human condition. Journal of Family and Consumer Sciences, 99(3), 15-22.

Miles, S. (2008). Consumerism: As a way of life. New York, NY: Sage publishers.

Sandlin, J., Stearns, J., Maudlin, J., & Burdick, J. (2011). “Now I ain’t sayin’ she a gold digger” Wal-Mart shoppers, welfare queens, and other gendered stereotypes of poor women in the big curriculum of consumption. Cultural Studies: Critical Methodologies, 11(5), 464-482.

Tyagi, C., & Kumar, A. (2004). Advertising management. New Delhi, India: Atlantic Publishers.

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