Small Scale is “New Trend”(?)

http://www.reuters.com/article/2013/06/02/us-usa-apartments-micro-idUSBRE95105M20130602

The above-linked Reuters article is something I came across a couple of weeks ago.  It reports on a new trend in housing – “micro-apartments.”

Tiny apartments … are cropping up in major cities around the country to meet the demand of people who are short on cash but determined to live in areas with otherwise pricey rents.

They are “short on cash” because incomes are declining relative to housing prices.  They are determined to live in “areas with otherwise pricey rents” because that’s where the jobs are – in the cities.

Micros … usually offer less than 200 square feet including private bathrooms, and they typically come furnished, sometimes with built-in beds and other amenities to save space.  … Most feature a group kitchen that may be shared among eight units … Few come with parking

This isn’t a “new trend” at all.  It’s the process of population densification that’s inescapable when you continue to cram more and more people into the same space, as the U.S. (and indeed the entire world) is doing as our population grows ever larger. 

Think about what this is doing to per capita consumption of products.  Let’s use as a baseline the single-bedroom apartment I occupied when I took my first job after being discharged from the navy.  It was about 400 square feet.  It had a small kitchen, bathroom and living room, and closet space.  I had a designated parking space in a carport. 

The units reported on in this article are half that size.  So the per capita consumption of the materials used to construct the floor is cut in half.  Per capita consumption of materials used in the construction of the walls (lumber, drywall, insulation, paint, wiring and electrical fixtures) is reduced by 30% (assuming a square floor space).  If “group kitchens” are shared among eight units, the per capita consumption of ovens, kitchen sinks, refrigerators and small appliances is reduced by 87%.  Since “few come with parking spaces,” then, no doubt, the occupants rely on mass transit, or perhaps bicycles, and the per capita consumption of cars falls to near zero.

Take a walk through a Lowe’s or Home Depot and, as you do so, imagine the per capita consumption of each product that you see for people who live in these micro apartments.  Lawn mowers and other lawn and garden tools and products?  Zero.  Major appliances?  Zero.  Doors and windows?  Plumbing and electrical?  As close to zero as you can get.

This trend to smaller living quarters isn’t just isolated to a small slice of the population.  Aside from the wealthy few percent who have trended toward “Mc-mansions,” Americans’ dwelling spaces are getting smaller as land available for development dwindles.  Homes are smaller and are situated on smaller lots.  And those homes now house more people, as young people choose to stay with Mom and Dad later into their lives as their purchasing power shrinks relative to the cost of housing.

And that’s just homes and apartments.  Consumption of vehicles is declining as people are forced into more crowded city conditions where parking spaces are at a premium and streets are choked with gridlock.

But each one of these micro apartment dwellers goes to work each day and is even more productive than workers of the past.  And herein lies the problem.  It’s economically, physically and literally impossible for people to be more productive while consuming less and be able to maintain full employment.  Warehouses will eventually fill to maximum capacity as production exceeds sales, eventually leading to layoffs and growing unemployment. 

And what happens to per capita consumption then?  People who have lost their jobs consume even less, beginning a vicious cycle of falling consumption and worsening unemployment. 

The inverse relationship between per capita consumption and population density isn’t just a theory.  It’s real.  It’s happening, even in the U.S., once the land of wide-open spaces, but now where out-of-control immigration has turned us into an urban jungle and is fueling one of the fastest population growth rates in the world.  That this results in worsening unemployment isn’t just a theory; it’s more akin to a law of physics.  It’s inescapable.

Less consumption and living a simpler, more efficient life may seem to be a recipe for saving the planet, but it’s not.  The sheer volume of new consumers overwhelms any such savings.  Instead, it’s a ploy to make you feel better about the population growth that stokes sales volumes for corporations.  It’s a path away from a high standard of living and back to the poverty that mankind has worked so desperately to escape.

These aren’t difficult concepts, yet they continue to elude the field of economics.  The truth can’t be found if it lies in a place where you refuse to look, and the subject of population growth is one that economists fear above all others.

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