Money: Reudcing the level of Need Required Income (NRI)

Money: Reducing the level of Need Required Income (NRI)


            I have spoken about the cost of meeting core economic needs, but fundamentally the issue is not the monetary costs, but time costs. Simple living is living that is rich in time, this in turn requires that the time spent on purely instrumental activities (e.g. work that is not inherently fulfilling) undertaken to meet core needs must not be excessive. Ideally, a graceful life is completely free from such necessity, but such a goal is both largely out of reach and itself goes beyond what is required.

            From the point of view of the consumer, the amount of time that must be devoted to earning enough to meet core needs depends both on one's wage rate and the total cost of meeting those needs. Dividing the total cost of meeting core needs by the wage rate identifies the required labor time (e.g. $50,000 divided by $10/hour equals 5000 hours required for meeting needs, divided by $50/hour equals 1000 hours of required time).

             Since for the economy as a whole, changes in real wage rates are generally reflective of productivity, the underlying variables are the cost of meeting core needs and changes in labor productivity. If the real cost of satisfying needs remains fixed, need required labor time will decline as productivity increases, provided that productivity growth is taken in the form of higher wages. But as noted earlier, whenever there is productivity growth, a society has a choice. Should the benefits of productivity growth be taken in the form of higher incomes or in the form of expanded leisure? Yet without really deciding, without even recognizing that this is a fundamental decision for us to make, our overall system tends towards income expansion rather than leisure expansion. A politics of simplicity seeks to make this a matter of deliberate political decision. And substantively, it comes down strongly on the side of increasing leisure.

             If we are successful in using productivity increases to reduce labor time, then income remains fixed. If needs are already satisfied then this is not a great problem, but I argued in the previous chapter that for many core needs are unsatisfied and that for many it is a struggle to makes ends meet. How then does a politics of simplicity respond to the financial pressure of the ordinary household?

             Though it remains critical for people at the bottom of the income spectrum, as a general objective, the politics of simplicity looks towards increased social efficiency rather than higher wages, as the means to better satisfy core needs.   Why does it cost so much to meet core needs? And what can be done about it?

             As we saw in the previous chapter, there is no simple story with respect to such costs. In some areas they have been stable, in other areas they have increased enormously, far faster than income growth.

              Looking backwards two areas stand out as problems that have thwarted movement towards simple living: housing costs and transportation costs. Together these two occupy roughly 50% of the typical household budget. Given that for most Americans the needs for food and clothing are relatively well satisfied at historically low percentages of personal income, 12% and 5% respectively, had we managed to hold housing and transportation costs steady, we would have made substantial progress in opening up the possibility of simple living for moderate income families.

             What happened with transportation is particularly unfortunate, because it could have been avoided had there been clarity with respect to the appropriate goals of transportation policy, for instance, had it been a goal of national policy to not evolve into an intensely automobile dependent society. Instead, over the last half century, as first one car and then two cars became a necessity for most families, the percentage of household expenditures for transportation has more than doubled. Today, as we have seen, the average husband and wife  consumer unit (with or without children) spends almost $8,000 annually on transportation, roughly one fifth of total spending. Put in different terms, we might say, that of the five days we work, one day is for transportation expenses. That is a tremendous price to pay in terms of wedding individuals to a work-and-spend cycle, a tremendous price to pay for the absence of good public transport and the collapse of the urban environment.

             A politics of simplicity would make the lowering of the amount of money required to meet transportation costs a central objective. This might involve policies in many sectors, be they public transportation, housing development or urban revitalization. Central to this is avoiding or overcoming automobile dependency, and it is worth a serious effort to ascertain the extent to which this might be reversed.  But assuming that two-car dependency cannot be reversed, it would be worth an effort to see if it could be made significantly less costly.

             We should seek the emergence of a new kind of automobile. It would be one deliberately designed for the simple life. It would be safe, low cost, fuel efficient, and capable of being repaired by anyone handy with tools. It would be intended to last indefinitely, with each long-lasting component capable of being replaced, and with parts permanently available. This is not outside the realm of the technologically possible, and there are multiple policy tools government could use to encourage its development. Indeed, many transportation experts believe that the next generation of cars will be vastly more fuel efficient, capable of attaining eighty or one hundred miles to the gallon. With double or tripled fuel efficiency, doubled life spans, and less costly repairs, a significant reduction in transportation costs is possible.

             Also in the transportation area we might require the kind of labelling that we now have on foods, but instead of information on cholesterol and fat content, we would require information on "automobile liberation day" -- that day of the year on which we stop working merely to pay for the car. To do this one would factor in for each model its cost, fuel efficiency, expected repair costs and longevity. Then using the median wage level, one would calculate how many hours and days of work are just to pay for the car. For instance, if auto-related costs for a particular model account for 15% of median income, auto-liberation day would not be until March 1st -- whereas with the simple living automobile, auto-liberation day might arrive on January 25th. Thus, we might at least become better informed consumers when we make our transportation purchases.

             Even more fundamental than the transportation sector are the problems we face with respect to housing. Here the goal is to facilitate the simple life, making it possible for people to have decent housing with modest incomes. The housing objective should not be understood in purely physical terms, but in terms of safe, perhaps even beautiful neighborhoods with good schools. Of course, the topics of housings, crime and schools are standard issues on any political outlook. A politics of simple living brings to these familiar areas of policy interest a fuller perception of the problem and a new criterion for solutions.

             At this stage a politics of simplicity is not about answers, so much as it is about how to define problems, about opening up new perspectives on old problems, and seeing new meanings in long standing debates. One of the hard lessons of the last several decades, is that solutions to public problems do not come easily. 

             Rather than being dogmatic about solutions, we should be experimental. John Dewey once referred to the individual states as "48 laboratories." That's not a bad way of thinking. We do not yet know how to solve the housing-crime-schools matrix of unmet social need in this country. We do know that when each of us tries to solve it by earning enough to escape from it, two things occur. First, we are wedding ourselves to income levels and life styles that squeeze out the possibilities of a simpler life. And second, we are finding solutions that work for the few, but cannot work for all. We can't all escape from ourselves.

             Thus, a politics-of-simplicity approach to the housing-crime-schools problem, rather than facilitating upper middle class escape, (e.g. through tax breaks for higher housing purchases, or private schools) would emphasize the mobilization of energy and resources to transform the neighborhoods we presently live in. An easy first step is beautification: flowers, trees, picking up trash, painting and polishing. Part of what a politics of simplicity brings to such problems is a perspective that redefines what's at stake -- these are not discrete "issues" or "social problems" -- rather these are the central obstacles that block the path to simpler, more coherent and more vigorous lives.