There is a joke in the market, "the poor use Facebook, the rich buy it". The former refers to ordinary social media users, while the latter refers to investors who buy stocks of social media companies. These different attitudes of two different groups towards social media seem to be related to whether they live in relative wealth or poverty. Does such a correlation actually exist? If it does, what does it really mean?
The Hong Kong Economic Journal recently quoted the Modern Wealth Survey, a large-scale wealth survey conducted by Charles Schwab, the largest online financial group in the United States. The survey covers a huge base, from the baby boomers (55-73 years old) to the youngest individuals of the Gen Z (14-24 years old). Suffice to say, the survey showed many interesting discoveries.
For example, how much net worth do Americans nowadays think is necessary in order to be regarded as wealthy?
The average response was US$ 2.27 million. According to the federal government's 2018 census, the median net asset value of local households is only US$ 973,000. This means that the threshold of being rich ($2.27 million) which American people crave for is actually 23 times higher than the median net worth of local households. The gap is so large that, if this standard was taken as a benchmark, most people will probably not be able to cross over the line to become rich.
Interestingly, there are two major factors that are considered to cause this situation according to data from the survey, and both of them are related to social media. On one hand, as many as 60% of respondents admitted that they often wondered why their friends could afford to have such expensive life experiences as posted on Facebook and Instagram, such as splurging on branded products, going for vacations, drinking afternoon tea in hotels, etc. As time passes, many people tend to overestimate the wealth of their friends, and thus raise the threshold of being rich in their minds. What is more is that if we look at Millennials (24-34) and Gen Zs (14-24), the percentage of respondents who feel this way reached up to 72% and 74% respectively, which reflects that these groups are likely to be more affected by social media.
On the other hand, 34% of respondents admitted that they were often influenced by social media to make unnecessary consumptive actions. When we see others bragging about buying limited edition sneakers or going to rock concerts on social media, this would often affect us and prompt us to make similar decisions, even if we are not particularly interested in or have no budget to consume the same things. Millennials and Gen Zs are more aware of this kind of consumption, with the percentage reaching up to 49% and 44% respectively. In other words, American people, especially the younger generation, are getting poorer because they constantly raise the threshold of being rich higher while spending increasingly more money for unnecessary consumptions made under the influence of social media. Naturally, the gap between the net worth of the wealthy and the goal of becoming wealthy is widening. Some analysts therefore believe that the main culprit of this situation is Facebook and Instagram, which is incidentally owned by the same Facebook group.
The survey also asked respondents to list the things that had the most impact on their financial situation. The largest proportion (35%) reported that it was through social media that they got the worst influence, followed by friends (20%). Conversely, 41% thought friends brought the best influence. For example, if someone around you is frugal with spending and prudent in managing their finances, it is easier for you to learn the good habits from him or her.
Overall, social media has a significant impact on people's consumption patterns, life attitudes and values. In recent years psychologists have generalized it as FOMO (fear of missing out). Why does the occurrence of FOMO take place? It is due to none other than social media. Since it is so convenient to "peek into other people's lives" in social media, social media will push all kinds of information to us even if we were not interested in them, thereby making peer pressure in modern people greater than ever. If people (especially young people) lack fully independent and clear values, they tend to imitate the friends they see on social media. They also become envious of others’ rich-life experiences due to FOMO. Therefore, they do not hesitate to max out their credit cards in buying expensive sneakers, having luxurious high-tea and going for travel or concerts like their friends.
In fact, this kind of comparison is not a new phenomenon in the consumer society. The social networking sites in the network era have merely strengthened the elements of comparative psychology and abnormal consumer behavior, while simultaneously showing the strong power of alienation which social media has. The reality is that what people showcase on their social media are not always what really happens. Most people tend to show only the best sides of their life on the social platform. Therefore, when everyone compares and consumes like those people, an endless pursuit cum competition occurs. Capital and enterprises have also made full use of people's FOMO mentality. They repackage unnecessary consumptions as things that are enjoyed by everyone on the internet, or make luxurious lifestyles appear as if they should be daily normalcy of life. These sales methods are effective in attracting ordinary people who are unwilling to be left behind. These consumers would rather borrow money to fund their consumptions than lagging behind others.
Things will face resistance or backlash when they reach the extremes. This is happening now to the dominance of FOMO too. In recent years, the younger generation in the United States have started a surge of countertrend called JOMO (joy of missing out). For example, they deliberately delete social network accounts or limit themselves to utilize social media for up to 15 minutes a day, so as not to be influenced or drawn in by social media. At the same time, they also aim to control themselves to not indulge in social media with self-discipline. In any case, the real masters of the internet era are not ed to the large number of ordinary people, but the capitalists who chase after the capital that powers social networks and media, as well as the investors who back social network platforms.
Final analysis conclusion:
The rise of social media in the internet era may not have always brought positive impacts on people and society, and indeed it brings more negative impacts sometimes. The sense of alienation caused by social network media is now creating a large number of poor and lost people in our new era.
