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How’s the Economy? The Scrap Heap Indicator
by, 09-07-2009 at 04:36 PM (2758 Views)
I don’t need the media or the government to tell me that the economy is heading south. I have a foolproof barometer of economic health in my own town. It’s called the scrap heap, aka, the metal recycler.
For about ten years, I’ve been collecting my aluminum cans and taking them to the scrap heap for recycling once a month. It’s a win-win situation. I do something good for the environment, and the metal recycler pays me per pound of aluminum I bring in. It’s not a fortune by any means; it’s more like lunch money. However, if you have old appliances, air conditioners, cars or other large metal objects to get rid of, you can make a pretty penny. (So much so that the metal recycling industry has had to crack down and demand ID before you can recycle because so many people are stealing metal and trying to sell it.)
Having been doing this for many years, I can tell when the economy is going down simply by looking at the crowds at the metal recycler. When times are good, I can get in and out on a Saturday morning in under fifteen minutes. When times are bad, or heading that way, it can take over an hour to get out of the place.
So how are times right now? This past Saturday it took me an hour and forty-five minutes to drop off my cans and collect my cash. The lines were huge. That single fact tells me more than the media, the government, or the banks, with all their charts and indicators, ever can about our economic times right now.
It’s a simple equation. When times are good, people don’t need the money as badly so they find other ways to offload their metal. Maybe they donate it or give that old appliance to a friend. Or they call someone to pick it up and recycle it rather than doing it themselves. They can’t be bothered with taking their junk down to the recycler. But when times turn bad and people need money quickly, that metal suddenly becomes very valuable. Anything that can be sold to the recycler is suddenly worth selling. And so as economic times worsen, the lines at the recycler grow longer.
Not only do the lines grow longer, they also grow more diverse. When times are good, the lines are filled mostly with contractors offloading their metal trash. You’ll also see some other blue collar workers and Hispanics. However, when times start turning bad, the lines suddenly fill with guys in suits bringing in old lawnmowers, housewives and kids bringing in cans, and just about every other race or socioeconomic group you can name bringing in everything from old bikes to cars. They’re all there for one thing: quick money. It’s a plus that it helps the environment, but if that were the sole motivation you’d see these same people in the lines no matter the economic condition of the country. When times turn bad, people need money and it doesn’t matter if you’re white collar or blue collar, black or white. Bad times affect everyone and nowhere is that clearer than at the scrap heap.
If you listen closely to the chatter in the lines, it also changes with the economic times. When times are good, people are talking about going to lunch after they drop their stuff off, or they’re planning the rest of their day. It’s mostly mundane, day to day type talk. But when times turn bad, you find people talking about where they found their cans or who they know that has some metal to sell. They might talk about why they decided to come down here. They lost a job and need money. They’re in debt and need the money to make minimum payments. Whatever the story, the scrap heap becomes the great equalizer, a place where bad times can be shared.
If the suits in Washington really want to know how our economy is doing, I’d encourage them to visit their local scrap heap on a Saturday and take in all the people bringing in metal to sell. Visit often enough, through good times and bad, and you can begin to gauge the economic health of the USA. You don’t need a bunch of charts or graphs or earnings reports to see how the economy is doing. Financial experts and prognosticators have nothing on the people at the scrap heap. They are the true indicators of economic health.
Author: J. Derrick