Why Choosing to Make Less Money Is Easier Than Ever
The “great stagnation” presents us with a great opportunity. It’s easier than ever to opt-out of the income-maximizing rat-race and enjoy more leisure.
If innovation has become increasingly marginal, then it’s less costly to choose to be a “threshold earner,” which Tyler Cowen defines as “someone who seeks to earn a certain amount of money and no more.” If wages go up, Cowen says, a threshold earner will choose to work less or, I would add, choose work that’s so personally fulfilling that it’s indistinguishable from leisure.
Accepting a threshold income — maybe as a journalist at a political magazine or an independent graphic artist — is easier when you know you’re not foregoing any amazing new improvements in well-being. And the vast improvements we do see today, such as access to global communications and vast amounts of information on the Internet, tend to be available for almost nothing.
As Andy Warhol said,
What’s great about this country is that America started the tradition where the richest consumers buy essentially the same things as the poorest. You can be watching TV and see Coca-Cola, and you know that the President drinks Coke, Liz Taylor drinks Coke, and just think, you can drink Coke, too. A Coke is a Coke and no amount of money can get you a better Coke than the one the bum on the corner is drinking. All the Cokes are the same and all the Cokes are good. Liz Taylor knows it, the President knows it, the bum knows it, and you know it.
The Internet and modern media make this truer than ever. The same music, sports, movies, and HBO miniseries are available to threshold earners that are available to their high-income counterparts. The only difference might be the size of the screen they watch it on. Many persons are discovering, therefore, that above a certain income threshold, there is very little they “need” to be happy.
This is not to say that there are no tradeoffs. If you choose to accept a lower income than you might otherwise be able to command in order to consume more leisure, then what you are likely going to have to give up is consuming positional goods. You might have to trade in the Audi for a Honda, and have lunch at a food truck instead of WD–50. But even this sacrifice is getting easier.
For one thing, food trucks are “in,” and so are lots of other low-cost consumption made fashionable by threshold-earning hipsters — from no-brand plastic sunglasses and thrift store clothes, to Pabst Blue Ribbon and communal living. In some ways a conspicuously anti-consumerist lifestyle has become a positional good in itself. But even for the more refined (or grown up), a growing number of retailers seem to be catering to budget-minded but fashion-conscious customers.
Trader Joe’s is the chief example of this trend. It caters not to the average American, but to a more elite set interested in organic, gourmet, and ethnic foods. Nevertheless, it offers low prices through an ingenious mix of limited selection and price discrimination (many Trader-Joe’s-branded items are the same high-end brands you’d get at Whole Foods, just repackaged.) The company seems to be directly targeting educated threshold earners. One retail consultant that studied the chain has said that Trader Joe’s typical customer is a “Volvo-driving professor who could be CEO of a Fortune 100 company if he could get over his capitalist angst.” Indeed, the chain sites stores in university-dense areas brimming with bargain-hunting elites.
Another retailer that seems to cater to threshold earners with high-end tastes is Zara, which sells fashionable and high-quality clothes at affordable prices. Its supply chain innovations keep prices low, but what’s really interesting is their marketing. The company has no ad budget. Instead, it invests in real estate, buying storefronts next to luxury brands. As one fashion editor put it, “The retail strategy for luxury brands is to try to keep as far away from the likes of Zara. Zara’s strategy is to get as close to them as possible.” The threshold earning elite gets the high-end shopping experience and trendy clothes at low prices.
Other similar retailers include H&M and Uniqlo. Target’s frequent partnerships with famous designers achieve the same effect. And, of course, Ikea has been delivering modern Swedish furniture design at affordable prices for a long time.
So if you’re lucky enough to have the option to choose to be a threshold earner, it’s never been a better time. Not only can you drink the same Coke the president does, you can wear the same dress as Princess Kate.
