Trash Talk: What Garbage Can Tell Us About the State of the Economy
In our line of work, the cash is in the trash: the more people throw away, the stronger our business. In today’s consumerist society, it’s no surprise to us that junk production is up. Fortunately, it’s a sign that the economy is too.
Trash is as much of an economic indicator as employment rates or housing prices, with an 82.4 percent correlation with U.S. economic growth. That’s because it tells us so much more than how much trash is produced; it’s a comprehensive view of the state of our economy as a whole.
Culture Shift: From “Waste Not” to “Want Lots”
Let me explain: when people have excess trash to throw away, it means they’re spending more money. If they’re spending more money, it means they have disposable income.
The more people buy, the more stuff they need to clear out to make way for the new.
“Trash” doesn’t just mean garbage bags full of take-out boxes and product packaging. It’s construction and renovation debris, old fridges and TVs, and the laptops and old iPhones that are tossed aside for new 8s and Xs.
We’ve become a wasteful society — everything is disposable and nothing is made to last. Changes in the economy have totally shifted consumer perspectives on needs versus wants. In times of economic despair, we cut down to the basics we need to get by. But in times of stability, people become preoccupied with keeping up appearances — and unless they have the newest model of everything, they’ll never be satisfied.
During the Depression, people were lucky to afford a loaf of bread; today, we think nothing of dropping hundreds on a new cellphone every year.
It’s not necessarily a bad thing to celebrate prosperity by building a new home or replacing outdated appliances. In fact, our company would never have become what it is without this massive cultural shift. And we’ve learned the hard way what a shortage in junk means for the economy.
The Junk Boom and Bust
The recession hit us hard after a decade of hyper growth. Before 2008, we had 312 locations and by the end of 2009, we’d dropped to 180 as franchises closed or were swallowed up by larger ones in the system.
The problem for us is that junk removal isn’t an essential service: when money is tight, people do it themselves. During the recession, it wasn’t just that people couldn’t afford us; they were spending less across the board. Instead of buying new things, they made do with what they had. As a result, trash production plummeted right along with the economy.
Fortunately, the economy has turned around and so have we, but there’s no way to guarantee we won’t hit a slump again.
The Cyclical Culture of “Stuff”
So, do I like that we live in a culture of stuff? As a self-proclaimed minimalist, no. But people are going to keep on spending and in turn, throwing things away. All of that junk has to go somewhere and at least we can do our part to dispose of things properly.
The good news is that even though people are producing more junk than ever, they’re also increasingly aware of their impact on the environment: for example, Americans recycle 34% of what they throw away (up from 6.5% about 50 years ago).
At the end of the day, the economy is cyclical. The ability of a business to survive in hard times depends on how you respond to the crisis. In 2008, we didn’t react quickly enough. But the lessons we learned about junk as an economic indicator have better prepared us for the next rise and fall of the economy.
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