America’s working class and those on fixed incomes are suffering the most from increases in energy prices, according to a new study released today by the American Coalition for Clean Coal Electricity. The study finds that more than half of U.S. households now devote more than 20 percent of their family budget toward energy costs, nearly double what they spent just ten years ago.
“When government regulations increase the cost of energy, it is America’s working class who shoulder the burden,” said Steve Miller, immediate past president of the American Coalition for Clean Coal Electricity. “A typical American family is now spending almost twice as much for energy today than it did a few years ago. For millions of Americans living on low and fixed incomes, surging energy prices mean less money for other necessities such as food, housing, and health care.”
The annual assessment “Energy Cost Impacts on American Families” uses data from the U.S. Department of Energy and the U.S. Census Bureau to analyze energy cost increases since 2001 for U.S. households. Energy costs include transportation, home heating and cooling and electricity.
While this report is promoting a clean-coal agenda, it’s important to note that any shift in energy and information, affects the other leading indicators.
Look at "energy and information (E&I)" components in each of these expenditures…
While it’s impossible to calculate the E&I share, you can see that in every case, E&I are a major lever in either raising or lowering the costs of any of these expenditures. We know at least a 20% share.
If ANY of these expenditures, or share of budget goes down in the typical household, what goes up?
Saving? Spending? Investment?
What is likely to happen if you decrease the costs of Energy and Information?
At this point in time in the cycle of business?
AND…
What happens if you dramatically increase the idea that people are going to live longer?
Will this typical demographic cycle hold up, or will a new cohort of spenders naturally emerge?
There are several reasons why this new cohort of spending will occur:
1) the pressure to retire is lower.
2) kids are not getting jobs right after college and therefore spending by parents/grandparents will equal the lost spending by the 22-30 cohort, equaling it at least, increasing it most probably.
3) more cool things to buy, places to go and a latent desire to spend because of the last recession.
Do you know that the average age of autos and light trucks on the road in January 2012 was 10.8 years old?
There are large areas of pent-up demand, that will actually benefit the consumer as energy and information, as well as production and consumption due to new demand curve.
While one of my predictions is the ROARING TEENS, I think we can expect turbulence and asymmetry accompanied a near period of extreme growth (5-7%), in front of a far cliff, that will present humanities greatest problems!
Now, what is my advice?
Live as if…
You fill in the blank, but for me, my advice is simple, actionable and highly PRODUCTIVE @F-L-O-W.
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