Related Publications - Tuning into our times

Assumption 5: Money matters most

People nearly always say they don’t have enough money, and some people clearly don’t. Despite rising affluence, there’s a greater gap between the very rich and the very poor. The middle-class feel like they’re struggling to afford the sorts of things that they think they should be able to take for granted. And when it comes to housing, they are. So money is important.

But, maybe people are increasingly valuing things other than money – like time with family and friends, time to chill out or to be creative. And it’s not just Generation Me. Because, while people are better off, a lot of research suggests that we’re not happier. Are we seeing the inflation of the non-monetary aspects of people’s lives? ²⁷

Henley Insight, the UK consumer and citizen research company, has created a framework around five resources that people trade and exchange for well being, which is useful to look at in relation to the labour market. They call this framework ITEMS: Information, Time, Energy, Money and Space. While their research is UK based, it’s likely to reflect what’s going on here. Perhaps even more so given our long hours of work syndrome. ²⁸

The information that’s coming through from overseas and NZ research reinforces my earlier theme that we’re becoming a less, or, if you prefer, a differently caring society. Caring about me, but not necessarily about you and them as people are stretched juggling the limited amounts of time, energy and space they have, as distinct from money.

This has two sorts of implications for the labour market. One is people’s willingness and ability to do paid work. The other is changing consumer demands for new products and services as they juggle their ITEMS – which in turn create new labour market demand.

Information

There are contrasting views around information and choice. Henley’s research suggests that more people are finding it difficult to cope with the number of decisions they have to make. In their Planning for Consumer Change research, Henley Insight has noted a shift in people’s ability to deal with choice. A move from 60% who in 2002 agreed that “You can never have too much choice in life” to 52% who agreed in 2004. This sits alongside the 25% who said, “I find it difficult to cope with the number of decisions I have to make nowadays.” Interestingly, this was 32% for 15-24 year olds and 28% for the 65+.

People increasingly wish life were simpler, and they had people to sift through the information and make decisions for them. As Barry Schwartz put it in his book, The Paradox of Choice, too much choice can lead to a reduction in well being. http://www.swarthmore.edu/
SocSci/bschwar1/

A contrasting view comes from the Pew Internet & American Life Study conducted in April 2006 http://www.pewinternet.org with 60m internet users saying that the internet helped them make big decisions or negotiate major episodes in their lives. From coping with major illnesses, to pursuing training for a career, to making major investment or financial decisions. Because the internet connects people not just to information but also to on-line communities: experts or people who’ve encountered similar problems.

The issue may not so much be one of too much information as about the availability of filters or decision support: software or people who can narrow the choice. If this is a growth area of the economy, what sort of labour force does it require? As Demos puts it in their just released report, Recruitment 2020, “Intermediaries have become hugely important to us, they tell us where to shop, who to do business with, and who to hire. Our happiness and our wealth can depend on them.” http://www.demos.co.uk/
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As James Surowiecki and Glenn Reynolds note in their respective books on the power of everyday people or ‘crowds’, the Internet has enabled the development of a referral infrastructure. This is either a blend of commercial and amateur, as in eBay or Amazon referrals and references, Google search rankings, or totally non-commercially driven as in Wikipedia. What Avenue A:Razorfish, an interactive marketing and technology services agency describes as authority shifting. A good blog on the wisdom of the crowds is http://swarmcreativity.blogspot.com/ which has a moderated discussion with Peter Gloor and Scott Cooper, co-authors of Coolhunting - Chasing Down The Next Big Thing

However the ability of strangers or crowds to mislead must be noted as rating and recommendation rorts do occur: what Wired magazine contributing editor Annalee Newitz refers to as crowdhacking.

The significance of choice was highlighted by Peter Drucker:²⁹

In a few hundred years, when the history of our time will be written from a long-term perspective, it is likely that the most important event historians will see is not technology, not the Internet, not e-commerce. It is an unprecedented change in the human condition. For the first time - literally - substantial and rapidly growing numbers of people have choices. For the first time, they will have to manage themselves. And society is totally unprepared for it.

While I have intense respect for Peter Drucker’s wisdom, given how people are embracing digital technology and social networking, I wonder if that is so true. Especially for the digital indigenous, the born-to-IT generation. Perhaps what he means is that forms of authority are totally unprepared to have less power and control over people’s lives?

Could it be that the internet is in fact stimulating the development of self-managing individuals and groups? Let’s take the example of eBay. Over 700,000 people earn an income, full-time or part-time; another 1.5 million use it to supplement their income. This compares with the 1.1 million who are employed by Wal-Mart, America’s largest employer. Many of them have left employment, that is, being managed by someone else, precisely in order to manage themselves.

In addition, eBay is a self-regulating community of buyers and sellers. PayPal, a payment system that enables individuals to accept payments from other individuals was chosen by the community of traders/users ahead of the eBay product or traditional money exchange products like credit cards. Users rank each other as sellers by making visible the history of transactions. Those who control and regulate society and the economy might not be ready for people to self-manage, but perhaps the people are.

TIME AND ENERGY

Back to our ‘currencies’. Henley’s tracked people’s views over the last 5 years by asking them to respond to statements such as, “I’m so tired in the evening I often don’t have the energy to do much.” And “The pace of life is too fast for me nowadays.” “I never seem to have enough time to get things done. “I’m willing to spend money to save time.” Obviously the answers vary according to age and gender, but it would seem that generally, people have either too much or too little of both time and energy.

This trend is supported in a MORI study on Currents in British Society and Politics, where 56% of people aged 45-54 agreed that “I resent overtime eating into my free-time, even if it’s paid”, as did 43% of 35-44 year olds, and 37% of Gen Xs (15-34).

Given that we’re relying on the Baby Boomers staying in the workforce till they’re 65, it should be of concern that only 18% of them agreed that “Fulfilment in life is achieving a prominent position in your chosen career” compared to 37% of pre boomers and 35% of Gen X.

What this suggests is that increasingly time and energy are valued by people more than money. In the Henley Euro PCC 2001 study people’s agreement with, “I never seem to have enough time to get things done” increased from 49% in 1998 to 56%. Up from 32% in 1999, by 2002 40% of all UK adults agreed that they were, “willing to spend money to save time.”

This won’t surprise those of you with families as the NZ Family Commission’s research revealed that being able to achieve a balance between family time and standard of living was identified by families as one of the most significant challenges they faced.

SPACE

Lastly, space. In Henley studies respondents were quoted as saying, “I’ve lived in the same place for 24 years and people have changed. Everyone just minds their own business these days and rushes about.” People spoke openly of avoiding neighbours deliberately for fear of being “trapped” in unwanted conversations, just wanting to get inside and shut the door. Parents were too exhausted to visit parents.

People are being much more deliberate about who they let into their personal space, and who they think of as their communities: MySpace notwithstanding.

All the above have profound implications in a tight labour market where we’re trying to improve net migration. And the labour market demands of a caring-more economy.

In regard to space and the environment, a tension people have expressed around giving up their car to travel by public transport to ‘leave less of a footprint’, is that the time in their car is precious “space” in an otherwise crowded and time pressured day that they’re reluctant to give up. And as technology is enabling people to turn their cars into ‘living rooms’ places, personalised spaces, they may be even more unwilling.

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Footnotes