Belt-tightening among wealthy shoppers could choke blue-collar households

[Newsjock]

Source: Associated Press

It’s hard to feel sorry for well-heeled shoppers whose idea of tough economic times is passing on $1,000 Burberry raincoats or that $300 limo ride while the working poor skimp on vegetables and take the bus.

But economists say that recent signs of cutting back by the affluent could hurt the economy and deliver even more pain to lower-income workers, who are dependent on their business and fat tips.

... Niemira expects the retail sector, whose growth was fueled in part by strong gains at luxury chains, will struggle to eke out a 1 percentage sales increase in stores opened at least a year during the next few months. That’s below the 2.1 percent average for 2007 and 3.7 percent for 2006.

... Such reined-in spending seems to be the end of a winning streak for luxury retailers that once appeared immune to the economic slowdown. Tiffany & Co. and Williams-Sonoma Inc. both reduced their earnings outlooks and Burberry PLC said it may miss its 2008 profit forecast. Coach Inc. reported a 1.1 percent decline in same-store sales at its North American stores for the second quarter ended Dec. 29, 2007 and Compagnie Financière Richemont SA, the Swiss parent of Cartier and Baume & Mercier, reported a slowdown in holiday sales growth.


Read more: http://www.bostonherald.com/business/general/view.bg?articleid=1069581

[UpInArms]

1. ...

okay - here's how I feel for those "wealthy" non-spenders :nopity:

and for the dollars that would fall upon the heads of the foreigners that make those Lamborginis - well, a bit more compassion.

:hug:

but on the whole - I say - oops! that flipper finger was an old DU smilie!

...but you get the drift

[sarcasmo]

2. Sorry, but I don't think Burberry raincoats are made in the United States.

[laconicsax]

4. They're made in China.

Then again, considering how much China owns this country, it's almost like they're made here, right? Their stuff used to be made in Wales.

http://www.timesonline.co.uk/article/0,,2087-2472065,00.html

[pinniped]

9. Some of their stuff is union made in the US.

.

[Freddie Stubbs]

35. Yes, but the people who work in the stores selling them live in the US

[sarcasmo]

37. Freddy, can the people in the store making ten bucks an hour afford a thousand dollar raincoat?

[laconicsax]

3. There's that trickle-down myth in action

Give the wealthy more money and it will trickle down to everyone else!

[JBear]

6. Trickle down...

And we all know what trickles down

:bounce:

[Redstone]

10. You beat me to it; it's the Rise of the Living Dead of the Trickle-Down Bullshit yet again.

Redstone

[Thor_MN]

15. How can we finally kill the fricking "Supply Side" hydra?

12 years under Reagan/Bush I, eight years under DoubleDip, why can't the people that call themselves Republicans (and are not neocons) see that Supply Side/Trickle Down is a complete failure? Soon to be 20 years of losing ground to the elite, they keep voting for the idiots who are bending them over their checkbooks and going for distance?

Will the last person with any money please turn out the lights in the store when you leave?

[blondeatlast]

33. "DoubleDip." From now on, that's my sobriquet for it.

:rofl:

[customerserviceguy]

5. If you work in a place

that sells ultra expensive crap made for mere pennies over in China, you deserve to have a day of reckoning when even the idle rich start figuring out that it's a ripoff. If you've been selling $250 Coach bags to idiots who could have gotten by with a well-made fifty dollar one, then you've been living high off that hog for quite some time, and you'll see a reality check.

This looks like propaganda to try to reshape the stimulus package to give the well-off a hefty hunk of it to theoretically dribble down on the rest of us.

[ohio2007]

7. Those that work at "Needless Markups" are sure to be downsized

in the future.
imo, I think thats where the story is going between the lines

[yardwork]

27. Layoffs predicted - right on time.

And it's all our fault for not supporting the preznet!

[L0oniX]

8. Next xmas season will be much worse. Bet on it.

[GoddessOfGuinness]

11. So I guess we'd better help the rich or the poor are gonna get hurt, right?

:eyes:

[ursi]

12. that sounds like great Bush logic!

[ursi]

13. that sounds like great Bush logic!

[iaviate1]

14. The wealthy leave fat tips?!?

I work with many wealthy people and they always seem to DEMAND the most for the least price.

[Chovexani]

19. Rich people are the worst tippers

No matter what the job was, waitressing or handcarving and dressing custom candles at a Pagan bookstore, yuppies and rich people were the absolute worst tippers.

Conversely, the working class folks tipped fabulously. Probably because many of them survived on tips as well.

[blondeatlast]

34. That was my experience--and in an upscale dept. store I worked at, the middle incomes were

far, far nicer than the ultra-wealthy "new money," though our "old money" customers were usually very gracious (including the store's owners daughter until it was sold to Masses--er Macy's).

[yardwork]

24. This has been my experience as well.

[MilesColtrane]

16. That stuff trickling down on the middle class isn't wealth.

It's warm and stinks.

[mcscajun]

17. Service workers to the wealthy - first to get Hurt as the wealthy cut back. Won't be the last.

Nathan Warren, a limo driver, knows this first hand: He has seen his monthly wages drop by 40 percent to about $1,800 since late last year. His work week at Newport Beach, Calif.-based Classy Ride Limousine Service was reduced to three days from five amid slow business.

-snip-

Just look at the cutbacks by Dali Wiederhoft, a 52-year-old marketing executive from Reno, Nev., made skittish by a volatile stock market, a 20 percent decline in her home value and recession fears.

Over the past three months Wiederhoft pared her spending....Her cutbacks also included canceling the services of a cleaning woman and a lawn care company. She also plans to trade in her BMW for a Ford when her lease expires in about a month.

-snip-

"We’ve been really slow," said Lattier, noting that 12 out of his 20 drivers are now working three days per week. With the average driver earnings $150 a day in tips and wages, that means a weekly shortfall of $300.
http://www.bostonherald.com/business/general/view.bg?articleid=1069581

To that limo driver, a $300 shortfall in a week is a serious shortage. That cleaning woman Wiederhoft canceled maybe has other clients, maybe not (maybe they've cut back, too.) In any case, her wages drop. The lawn care company lays off a worker, maybe.

And somewhere out there is another wealthy person who maybe was going to buy a new Mercedes, but now, is going to wait "Maybe next year." So, postponing buying a new car means no commission now for the auto salesman, who doesn't buy that new suit he needs now, so there's a men's clothing salesman who doesn't get that commission, who maybe doesn't go out to lunch at all that week, and a waitress whose tips go down.

It's always been true, but never more than now in a service-based economy; we're all connected, people; It's ONE Economy.

The wealthy, of course, will be just fine, no matter what "cutbacks" they have to make; they'll still be wealthy, and I don't feel sorry for them, at all. Their belts may need tightening, but it'll be the people who work providing them with services who'll feel the pinch. Them I do feel sorry for.

[scarletwoman]

21. Because heaven forfend that we have an economy that provides employment

at a living wage for doing something OTHER than servicing the desires of the Upper Class.

[yardwork]

25. My thoughts exactly.

[mcscajun]

30. Exactly right. This was, unfortunately, predictable...

...by anyone with a functioning brain who'd been paying attention. Lose the manufacturing, lose the IT, offshore anything that can be done remotely, and what's left? Service...the single most vulnerable element of society since time immemorial.

[Virginia Dare]

31. The ideal lifestyle for the corporate wealthy class..

would be to go back to something along the lines of Victorian England. That's the way we're headed.

[SammyWinstonJack]

32. Only one thing too do.....MORE TAX CUTS FOR THE RICH! And make them PERMANENT!

WRITE 'EM STONE!

Right georgie? :eyes:

[angrycarpenter]

18. It's a sorry state of affairs

When the crumbs that fall from their tables are a basis for an economy. If skipping some wasteful whim is suffering to them then I say let them suffer.

[KT2000]

20. That is why they deserve

all those tax cuts.
They're so generous in their spending on themselves and therefore prop up all the rest of the losers in this country.
Even if their self-presents are made overseas, it makes the little people feel good just to see all that luxury.
Give 'em another tax cut - they deserve it!!

[Fleshdancer]

22. Could there possibly be one solution to a recession that does NOT include...

...guilting Americans into spending more money on crap they don't need?

I'm all for encouraging the wealthy to help the poor, but telling them to buy Tiffany diamonds and Coach purses sounds pretty damn stupid to me. In fact, the only people I see benefiting from this strategy are the shareholders of Tiffany and Coach.

edited for clarity

[SoCalDem]

23. My son's wife doesn;t like jewelry, but she's a Tiffany snob, so

my silly son bought her a 3-diamond platinum BOOKMARK for Christmas.....:#$@$&*^%#@!.. :eyes:

They do their part for the consumer-nation :eyes:

[libodem]

26. While we are being choked out of solvency

in the middle class we have a huge increase in billionaires. The thing is after those 300 billionaires (random number, i don't know how many there really are) buy the best of everything, how much damn more stuff, do they need. They can only shop so much and replace all the latest styles a few times a year. But hundreds of millions, of middle income folks, who are paying more for gas and groceries, or who no longer have a job at all, are not out buying stuff. It's top heavy. Billionaires only need so much. They can't compete with the shear numbers of the regular people who keep the economy booming when they have money to spend. This administration has got it SO wrong.

[RB TexLa]

28. Spending less money is a good thing, wealthy or poor

I don't call it shopping, I call it "giving my money to people"

[Jed Dilligan]

29. Can't resist this one...

http://youtube.com/watch?v=z1V-rpXxWcA

[Cobalt Violet]

36. "fat tips" my ass!

It's the blue collar worker who are the best tippers. I'm in a profession that is tipped so I think my observation is more valid than some dumbass economist.