Do people still use clotheslines to dry clothes?

yes

I think about putting one up every now and then but eventually decide against it because I don't want another obstacle to mow around.

My grandma still does.

She only uses the dryer for jeans

My wife hangs up the stuff she can't dry inside on a rack. I guess that is pretty much the same thing.

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Why do this when a clothes dryer is available?

One reason is the lovely fresh scent that lingers on the sheets and the clothes. All the fabric softeners in the world can’t create the sweet smell that sheets carry after they have been blowing in the breeze all day.

Clothes line drying allows the sun to bleach the whites with its ultraviolet rays, while also killing some bacteria. Using no commercial bleaches is great, especially because the majority of us residing in the country are on septic systems and shouldn’t use bleach.

Hanging clothes on a line instead of using a dryer is more economical, as well. Do you ever wonder where all that dryer lint originates? From your clothes, of course! Dryers wear out clothes faster than the more “old-fashioned” method of line drying.

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I hang pretty much all "dress" clothes for work, but inside the laundry room, not outside. Some clothes just can't be hung though. Problem is clothes come out all stiff when you hang dry them. Some of my clothes gets wrinkles set into them that just doesn't come out with ironing if they are hung to dry.

With how dry it is in Colorado, I've been tempted to hang one up. Along with this, another benefit of the dryness is being able to put wet dishes directly into the cabinets without drying.

I'm not even sure mildew exists here.

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this is a myth

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I'll have to inform my clothes about this so they'll stop being stiff then.

You are right that it's not a big deal for most clothes. Run an iron over it, or toss in in the dryer to de-wrinkle for a minute and it's fine. Some just don't cooperate if they are hung.