Teen Spending and Its Crippling Effect on the Economy Essay

            Teen Spending and Its Crippling Effect on the Economy

The teenage age or adolescent period is a time in human life that determines a lot in the development of any child. It is a time that values are being built and major choices and preferences are being made that would eventually affect the person for the rest of his/her life. In America, those that fall under the teenage age are given as much attention, if not more, than those that fall under other age bracket in the population. Not only are they given attention, they are actively involved in the day-to-day running of things in the country. Those that fall under the late teenage age are allowed to participate politically and are regarded as adults in America. Perhaps one sector in which their presence has been felt more is the economic sector.

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In America today, there is no way we can talk about the economy of the nation without recognizing the role the teenagers play in the overall condition of the nation’s economy. From a tender age of thirteen, many children in America are already proud owners of credit cards which are actually handed over to them by their parents in the case of any emergency. Apart from this, 3 out of every 5 children from age nine upwards already know how to use a credit card and have attempted using their parent’s credit card to shop on the internet.

Teenagers have a voracious taste for expensive clothes, electronics, cars and other consumables. Parents want to get them what they want so that they can build a relationship with their children. Such parents who want to please their teenage children indulge their kids and this is where the problem starts. According to a study made by Teenage Research Unlimited (TRU), American teenagers spent about $169 billion in 2004 alone. This figure is about $30 billion more than the biennium budget of the city of Texas in 2006-07 alone. In addition to this, it was discovered that their parents spent an estimate of $278 billion on them in the same year. As Rob Callender remarked, “Total U.S. teen spending exceeds the gross domestic product of countries such as Finland, Norway, Portugal, Denmark and Greece.” (Holdsworth, 2005).

The relevance of teenage spending power in America can be seen in the way several big companies lavish money on advertisements and surveys targeted at these teenagers about their products, goods or services. According to Folio Magazine, the revenue generated from sales of the five-title youth category teenage magazine jumped by no less than 17% in September 1994. This jump in revenue is attributed to the spending power of American teens and the advertisement of the companies that want to get these teenagers to buy their products. Apart from this, several billions of dollars is being invested on online surveys which are aimed at teenagers in order to get their taste so that they can suit their preferences. A typical example of the American teenager is Tracy Quigg who at the tender age of thirteen owns a stereo, TV and a VCR in her room. The eight grade student collects $10 daily and has this to say; “If I want something or I need something, I just say, ‘Can you take me shopping?’ “( Rodriguez, 2002). Most teenagers in America use a cell phone, Music Ipod or a Microsoft X-Box which costs around $300 “( Rodriguez, 2002).

The effect of teenage spending is not only felt by these teenagers but by their parent and the nation’s economy. These teenagers themselves are affected by their frivolous spending because they get used to this kind of spending and when they are responsible for themselves, they are constantly in debt. Apart from this, their parents are not left out of this. This is because oftentimes than not, the parents are the ones responsible for the payment of the expenses incurred by their teenage children. This makes them forever using their own personal income to offset the debt incurred by their children. The American economy is also affected because these debts sum up to affect the economy in the long run. The recent recession in the economy has made this big companies complain about drop in sales.

Summarily, we must understand that a bad teenage spender would almost automatically grow up to become a terrible spender when he/she grows up. This is the root of economic regression can be attributed to the bad teenage spenders who have grown up.


Matthew Klein (1998) Teen green teenage spending http://findarticles.com/p/articles/mi_m4021/is_n2_v20/ai_20302970