The trash index is perceived to be a very simple concept. The more an economy consumes and produces the more trash we will generate. Here is the most recent chart of the Trash index relative to United States GDP.
What a lot of economists find alarming is the divergence toward the right side of the chart where the trash index has gone down and United States GDP has gone up. This scares some economists who choose to use trash as a leading indicator. However is it a backward looking number just like GDP. Quite frankly I view this chart differently than most economists, I see it as a positive going forward. I think it represents what has happened with the shift in the economy, consumers are consuming less, and corporations are more profitable than ever.
How are corporations more profitable than ever you ask? It's simple. They are producing less trash! Corporations have learned how to run leaner in every business dynamic: Implementations of stricter ordering policies for raw materials to produce goods, not hiring more employees than absolutely necessary, conversion to paperless workplace environments, in a nutshell the concept of "doing more with less" has been achieved with high degree of success across all levels of the American corporate infrastructure.
The concept of "doing more with less" has also taken the American consumer by storm too. Everything from carpooling rates going up, to the number of people who are taking a bicycle to work increasing, the increased demand for fuel efficient vehicles, to maximizing the number of meals that can be made from a cooked chicken. In virtually every facet of the American consumer lifestyle drastic changes for increased efficiency and less waste have been made across the board. I haven't found any statistics to prove it, but i'd be willing to bet the usage of "hand me downs" has increased tremendously.
Being an optimist I view the "doing more with less" concept as a positive sign for the economy. As long as we have positive GDP growth and America continues to add jobs we will have stronger corporations with higher profits and financially stronger Americans. It's all in how you view buying power. American consumers in the future could eventually evolve into people that have money leftover after they get their paychecks and pay their bills versus the Americans of 2008 whose paychecks were completely spent before their employers put it in their hands.
It all comes down to the concept of quantity versus quality! Chasing quantity with ridiculously low profit margins is part of what sent the American economy into a tailspin. Now we have companies that are more profitable than ever and doing it with lower revenues. And that's how it should be in my opinion. Now hopefully the American consumer can get to the point of having money ready to spend for tomorrow, instead of their entire paycheck going to the expenses of the yesterday with no money left for the expenses of tomorrow.
