Happy Holidays Raj Chetty
Last month Bloomberg News published an article about a new type of Economics Professor at Harvard named Raj Chetty. Raj and his colleagues at their think tank (Opportunity Insights) have been conducting an ongoing study “How Did Covid-19 and Stabilization Policies Affect Spending and Employment?” (You can read a non-technical summary of their work to date here.) At Gifting Sense, we are interpreting the study’s findings as a call to arms if you will, for the top third of income earners in Canada and the United States, to whenever possible, responsibly spend locally – particularly this fall, coming winter and spring. This can help local businesses survive until public health measures can restore broader consumer confidence and spending.
It turns out that higher-income households haven’t cut spending because they have lost income or purchasing power, they’ve done it as a result of health concerns. But because higher income earners make up such a big percentage of overall spending, and so many of the ways people normally spend have been temporarily removed, the lower wage earners typically employed in the retail, service and hospitality industries have yet to return to work. We understand that responsible local consumerism won’t be able to save all of the businesses most affected by the current crisis – but if it saves 20% of them, shouldn’t we try? We aren’t big data experts, but from what we can glean from Opportunity Insights’ fully accessible database – there is the possibility of saving of over two million jobs.
We believe Opportunity Insights’ study results can be interpreted as a call to arms – for the top third of income earners in Canada and the United States to where possible, responsibly spend locally, particularly this fall, coming holiday season, winter and spring. We can’t save every business impacted by the current crisis, but we can save some of them.
To that end, starting today, we’re going to allow children everywhere to add a point to any DIMS Score they calculate for a potential purchase, if it will help sustain a local business. Yes, you are reading correctly, if your daughter or son is asking for a new winter coat, and the DIMS Score they calculated was 6.3, but they are buying it from a local store, they can automatically up their score to a 7.3, shifting the desired jacket from a want (DIMS Score 1-6) to a need (DIMS Score 7-10). We are taking this unprecedented step because we are completely aligned with Opportunity Insights’ mission, which is essentially to improve more people’s ability to live better lives .
Having children carefully consider how much they will use and appreciate an item or experience, before they purchase or receive it, is perhaps more important than ever. We believe letting kids add what we are calling Chetty-inspired Social Good Bonus Points (SGBPs) to their DIMS Scores can help them exit the pandemic not only money-smarter, but more socially aware and compassionate. We can’t market directly to children, and schools aren’t exactly in a position to welcome even free educational workshops these days, so your kids likely won’t even know they can employ “SGBPs”. We have an easy fix for that: When they email or print off the pdf summary of all the math and thinking they have done before making a request, be their hero, but perhaps more importantly, someone else’s, and show them how they can automatically add “plus one”.
It’s a tad early, but “Happy Holidays Mr. Chetty”, it’s starting to feel like a lot more people will have a good winter if we work together and help each other out as the coming months unfold.
Photo credit: Philip Keith for Bloomberg Businessweek