Sept/Oct 1998

ARTICLE TOOLS

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Sixty-five percent of Books & Culture readers have graduate degrees, 98 percent attended college, and 39 percent plan to continue their education in the next five years. But if Juliet Schor, director of the women's studies program at Harvard, is right, all that education doesn't make us smarter spenders.

In her recent book, The Overspent American (Basic Books, 1998), Schor reports on her study of workers at a telecommunications firm with 85,000 employees. Education, she discovered, has a clear correlation with savings, spending, and shopping. Mapping out her subjects at "Telecom" by educational level, she discovered that "controlling for other factors, … the more education a person has, the less he or she saves. Each additional level of education (going from a high school diploma to some college, for instance, or from a college degree to a postgraduate credential) reduces annual savings by $1448." That is a significant amount given the fact that the average employee at Telecom saves $10,450 per year, including retirement savings.

Less saving means more spending, and women with graduate degrees spend more time shopping than individuals in any other category. "Apparently," Schor writes, "people with more education are more status-oriented, more tuned in to identity and positional consumption, and more concerned about keeping up with the upscale groups to which they aspire and belong."

Schor does not talk about keeping up with the Joneses but keeping up with upscale groups to which her subjects aspire. Middle-class Americans no longer keep up with their neighbors, their natural reference group. In their "competitive acquisition," they focus instead on reference groups that are two or three levels above them. This is due ...