I often catch public transport around cities to meet with various clients. Recently as I sat gazing out the window, I realised that there was a growing disconnect about what I was observing and the economic information that I had been gathering.
The cities were vibrant. There appeared no expense on developing skyscrapers, apartment complexes, and supporting infrastructures. People appeared busy, dressed in reasonable clothes, drinking plenty of coffee, talking in cafes and lunching in restaurants.
These observations were similar, but obviously different in my own local community.
What played on my mind was how can there be such an appearance of affluence when economic data was indicating that many Australians financial positions were deteriorating?
The data indicated that Australian households has one of the highest level of debt in the world. Admittedly much of the debt is considered good debt because it has the potential for income generation.
Irrespective of what type of debt, it still requires repayment. Admittedly interest rates are at an all-time low, however there is no guarantee they will remain at these rates?
Combine this information with the fact that the average Australian earns $80,000 and they are spending $169,000 per year is potentially worrying.
In addition one in four Australians have less than $1000 in the bank and are living from week to week and low wage growth persists.
Even more concerning is increasing levels of job insecurity with reduction in full time jobs. In Australia in the last two years 75{01332a80e2e652688e18927fa9a6162580960d47bc08263a3993439d666dcd52} of new jobs created have been part time.
The question for me was should people be more worried than they appeared? Or was I being overly pessimistic? After all Australians are a nation of optimists who are celebrating 26 years of continuous economic growth.
As I reflected this disconnect, the image of crowded coffee shops kept reoccurring. I thought, that in some strange way, the consumption of coffee may provide me some insights. I was inspired to commence my own investigation.
I asked my local coffee shop owners what had they been noticing about their customers purchasing patterns. They responding in general by saying: People were having coffee but less cake.
I asked the strangers I sat next to on the plane. One lady, said that she had a concern that Australians in general were not doing as well. She worried for her children. However, when she observed the coffee shops and restaurants filled with people, it demonstrated to her the economy must be doing well and it relieved her anxiety. In other words, her concern was alleviated by observing others appearance of affluence.
I noticed a person taking a photo of their coffee for Instagram and yes I invaded her personal space to enquire why did she like doing this? Her answer was it was cool and everyone else was doing it.
One rather irritable man responded to my question by saying, why should he care why people hang out in coffee shops. He liked the coffee, he could afford it and that was all that mattered to him. Obviously, money was not a problem.
I made inquiries with people in my community. One woman said as a single mum she lived day to day as many people did. A daily coffee was a treat she could afford. While one elderly pensioner said, a coffee was a $5 investment that helped him connect with people each day.
On reflection, the answer perhaps to the disconnect is in part; many middle and poorer Australians are finding it increasingly financially difficult, however it is a slow burn. Coffee remains a small treat that remains affordable for many.
Paradoxically, however, by gathering at the coffee shops, it gives the illusion of collective prosperity and helps dispel thoughts of economic headwinds.
It also indicates to me that coffee as an “expectation” verses coffee as a “treat” may be a subtle indicator of an increasing economic divide between those who have and those who have not.
Whatever the reality, I am going to take a lesson from the chipmunks; and instead of storing acorns, I am going to store some coffee beans for that rainy day.
