‘It is the times of shock that force us out of our comfort zone,’ says Tanja Hester
May 19, 2022
By Alessandra Malito
Inflation might push Americans to make different spending decisions,
Inflation might push Americans to make different spending decisions,
for the better of their wallets and the planet.
GETTY IMAGES/ISTOCKPHOTO
Inflation has many Americans worrying — a jump in prices of groceries and gas means paying more for fewer items, and possibly constraining any savings for the future. But it could also be a chance to rethink everyday spending, and possibly even help the environment.
There’s a link between consumer spending and climate change. Much of what Americans purchase must be manufactured, placing more emphasis on resources, energy and fuel. This record inflation, currently standing at more than 8%, could be a time to revisit everyday spending and change behaviors, for the benefit of consumers’ budgets and the world, said Tanja Hester, author of “Wallet Activism: How to Use Every Dollar You Spend, Earn and Save as a Force for Change.”
In her book, Hester, who is also a MarketWatch contributor, shows the link between spending and big-picture global issues, including climate change, inequality and capitalism. Hester is also an early retiree, leaving the workforce at age 38 after switching from a lifestyle of splurging to saving. Her first book, “Work Optional: Retire Early the Non-Penny-Pinching Way,” explores financial independence and early retirement.
“For the people who are under 60 currently and hopefully have a lot of years left on the planet, we have to think of the world we want to be retired in,” Hester said.
Hester spoke with MarketWatch about the relationship between consumerism and inflation and how people could change their behaviors to save their money and help the planet at the same time. This interview was edited for clarity and length.
See: Gas is going up but this is how inflation really hurts older Americans
MarketWatch: Americans are worried about inflation and what it may mean for their everyday expenses. What is causing this problem, and what are a few ways you see it impacting their cash flow?
Tanja Hester: People are thinking of the supply side shortages and how that’s affecting prices or availability of things. We saw early on in the pandemic people hoarding toilet paper or other people trying to buy them and found the shelves were empty, so you would call that supply side shocks and that has driven a small part of this. But the vast majority of inflation is driven by two factors — one, just to put it bluntly, corporate greed. We see corporations raising prices solely because they can, not because their prices have gone up. We know agribusiness giants that control the meat supply by and large are jacking up prices even though they’re not paying suppliers more or workers more. Only 8% of hikes in prices are reflective of workers getting paid more. So there’s the corporate profit side, and the other side is overconsumption by consumers. Unlike other times when we had hardships, most people still have enough money to spend right now. Up until a few weeks ago we had a strong stock market so those profits funded people’s ability to spend, and workers got raises or switched jobs and got more pay. That ended this year, but until this year, government programs were putting more money in people’s pockets to help them spend. So people were able to spend and that means they can drive higher and higher demand for goods, then prices go up. It’s a vicious cycle at this point.
In terms of what people can do — if they haven’t, look at what they can trim back and where they can do some rearranging in household spending. From an inflation and climate change perspective, it is expensive to eat a lot of meat. It is also really carbon intensive to produce and comes with a big emission toll that affects the climate. So if you want to shift more meals to meatless — I’m not saying going vegetarian or vegan — you can reduce consumption of animal products, reduce household spending and do something positive for the climate. It can also be trying to delay other purchases. It is a terrible time to buy electronics, and a terrible time to buy a car. They are just wildly expensive. So if you can put off a purchase like that, it’s good for your budget, the planet and the exploited labor that goes into that thing. We know after the pandemic people feel very stuck, they want to travel, but airfare is expensive. If you can do something closer to home, that can reduce the climate toll of your actions and reduce how much you’re spending on travel.
MW: In your book, you talk about a connection between consumer spending and climate change — can you elaborate on that a bit for us?
Inflation has many Americans worrying — a jump in prices of groceries and gas means paying more for fewer items, and possibly constraining any savings for the future. But it could also be a chance to rethink everyday spending, and possibly even help the environment.
There’s a link between consumer spending and climate change. Much of what Americans purchase must be manufactured, placing more emphasis on resources, energy and fuel. This record inflation, currently standing at more than 8%, could be a time to revisit everyday spending and change behaviors, for the benefit of consumers’ budgets and the world, said Tanja Hester, author of “Wallet Activism: How to Use Every Dollar You Spend, Earn and Save as a Force for Change.”
In her book, Hester, who is also a MarketWatch contributor, shows the link between spending and big-picture global issues, including climate change, inequality and capitalism. Hester is also an early retiree, leaving the workforce at age 38 after switching from a lifestyle of splurging to saving. Her first book, “Work Optional: Retire Early the Non-Penny-Pinching Way,” explores financial independence and early retirement.
“For the people who are under 60 currently and hopefully have a lot of years left on the planet, we have to think of the world we want to be retired in,” Hester said.
Hester spoke with MarketWatch about the relationship between consumerism and inflation and how people could change their behaviors to save their money and help the planet at the same time. This interview was edited for clarity and length.
See: Gas is going up but this is how inflation really hurts older Americans
MarketWatch: Americans are worried about inflation and what it may mean for their everyday expenses. What is causing this problem, and what are a few ways you see it impacting their cash flow?
Tanja Hester: People are thinking of the supply side shortages and how that’s affecting prices or availability of things. We saw early on in the pandemic people hoarding toilet paper or other people trying to buy them and found the shelves were empty, so you would call that supply side shocks and that has driven a small part of this. But the vast majority of inflation is driven by two factors — one, just to put it bluntly, corporate greed. We see corporations raising prices solely because they can, not because their prices have gone up. We know agribusiness giants that control the meat supply by and large are jacking up prices even though they’re not paying suppliers more or workers more. Only 8% of hikes in prices are reflective of workers getting paid more. So there’s the corporate profit side, and the other side is overconsumption by consumers. Unlike other times when we had hardships, most people still have enough money to spend right now. Up until a few weeks ago we had a strong stock market so those profits funded people’s ability to spend, and workers got raises or switched jobs and got more pay. That ended this year, but until this year, government programs were putting more money in people’s pockets to help them spend. So people were able to spend and that means they can drive higher and higher demand for goods, then prices go up. It’s a vicious cycle at this point.
In terms of what people can do — if they haven’t, look at what they can trim back and where they can do some rearranging in household spending. From an inflation and climate change perspective, it is expensive to eat a lot of meat. It is also really carbon intensive to produce and comes with a big emission toll that affects the climate. So if you want to shift more meals to meatless — I’m not saying going vegetarian or vegan — you can reduce consumption of animal products, reduce household spending and do something positive for the climate. It can also be trying to delay other purchases. It is a terrible time to buy electronics, and a terrible time to buy a car. They are just wildly expensive. So if you can put off a purchase like that, it’s good for your budget, the planet and the exploited labor that goes into that thing. We know after the pandemic people feel very stuck, they want to travel, but airfare is expensive. If you can do something closer to home, that can reduce the climate toll of your actions and reduce how much you’re spending on travel.
MW: In your book, you talk about a connection between consumer spending and climate change — can you elaborate on that a bit for us?
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