Post-Recession consumerism in the U.S.: the influence of cheap and chic consumer products on perceptions of income inequality
Abstract
Disparities in both income and net wealth have been on the increase in the U.S. since the 1970s. Over this period, the wages of lower and middle income Americans have grown at a slower rate than the GDP growth of the country as a whole, and at a much slower rate than incomes of the top 1% of earners; the latter disparity having widened dramatically in years following the recession of 2008. In this paper we discuss the subjective and relative factors that determine perceptions of financial well-being. Despite a widening income inequality, American consumers, in all income groups, own larger, newer, better and more possessions than ever before. In an environment in which income concentration is likely to continue to favor those at the top for the foreseeable future, we discuss the psychological effect of consumer access to well designed, affordable mass-market and luxury mass-market products. We examine four dimensions of luxury perception and discuss these in the context of two different luxury brands. We propose that the increased purchasing power that the American consumer currently enjoys is a factor that may offset or cushion adverse social and political effects of income stagnation and economic stress.
References
Aghion P. & Williamson J. (1999). Inequality, growth, and globalization: Theory, history and policy. Raffaele Mattioli Lectures. Cambridge: Cambridge University Press. Retrieved from http://www.fordham.edu/economics/mcleod/AghionWilliamson.pdf#page=1&zoom=auto,0,142
Arghavan, N. & Zaichkowsky, J. (2000). Do counterfeits devalue the ownership of luxury brands? Journal of Product and Brand Management, 9 (7), 485-497.
Atkinson, A., Piketty,T. & Saez, E. (2009). Top incomes in the long run of history. National Bureau of Economic Research Working Paper, (15408). Retrieved from http://elsa.berkeley.edu/~saez/atkinson-piketty-saezJEL10.pdf
Beddoes, Z. M. (2012, October 13). For richer, for poorer. The Economist. Retrieved from http://www.economist.com/node/21564414
Berry, C. (1994). The idea of luxury. A conceptual and historical investigation. Cambridge: Cambridge University Press.
Boushey, H. & Hersh, A. S. (2012). The American middle class, income inequality, and the strength of our economy: New evidence in economics. Center for American Progress. Retrieved from http://www.americanprogress.org/wp-content/uploads/issues/2012/05/pdf/middleclass_growth.pdf
Cachon, G. & Swinney, R. (2011l). The value of fast fashion: Quick response, enhanced design and strategic consumer behavior. Management Science, (57) 4, 778-795.
Campbell, A. (1981). The sense of well-being in America: Recent patterns and trends. New York: McGraw-Hill.
Council of Economic Advisers. (1997). Economic report of the president. Washington, D.C.: U.S. Government Printing Office.
Davila, S. (2012, November 30). The internet’s first (real) fashion label. New York Magazine. Retrieved from http://nymag.com/thecut/2012/11/internets-first-real-fashion-label.html
Diener, E. (1984). Subjective well-being. Psychological Bulletin, 95. Retrieved from http://internal.psychology.illinois.edu/~ediener/Documents/Diener_1984.pdf
Elkington J. (1997). Cannibals with forks: The triple bottom line of 21st century business. Oxford: Capstone Publishing Limited.
Ellis, B. (2013, August 7). Find out if a company shares your values. CNN Money. Retrieved from http://money.cnn.com/2013/08/06/pf/company-values/
Forster, M. (2013). Increasing income inequity in OECD countries: Trends, drivers and lessons for policy. AIAS Annual Conference. Retrieved from http://www.uva-aias.net/uploaded_files/regular/ForsterAIAS26Sep2013-1.pdf
Fry, A., Faerm, S., & Arakji, R. (2013). Achieving the new graduate dream: Building sustainable business success at a small scale. Cuaderno, 48, 153-175.
Glaeser, E. (2005). Inequality. Harvard University Kennedy School of Government, Faculty Research Working Paper Series. Retrieved from http://papers.ssrn.com/sol3/papers.cfm?abstract_id=832653
Hagopian, K. & Ohanian, L. (2012, August 1). The mismeasure of inequality. Hoover Institution Policy Review, (174). Retrieved from http://www.hoover.org/publications/policy-review/article/123566
Howorth, C. (2013, December 3). Getting the goods: Online shop details where stuff ’s made. New York Post. Retrieved from http://nypost.com/2013/12/03/getting-the-goodonline-shop-details-where-stuffs-made/
Kapferer, J.N. (2010, September 15). Luxury after the crisis: Pro logo or no logo? The European Business Review. Retrieved from http://www.europeanbusinessreview.com/?p=2408
Kapner, S. & Passariello, C. (2014, March 3). High prices test wealthy’s will to pay. The Wall Street Journal. Retrieved from http://online.wsj.com/news/articles/SB40001424052702304585004579415110604829016?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB40001424052702304585004579415110604829016.html
Kuznets, S. (1955). Economic growth and income inequality. The American Economic Review, (65)1. Retrieved from http://www.aeaweb.org/aer/top20/45.1.1-28.pdf
Lauritzen, E. (2011). Causes and origins of the collapse of the former Soviet Union (Unpublished thesis). Ohio State University: Ohio.
Lerman, R. (1999, May). U.S. Wage-inequity trends and recent immigration. AEA Papers and Proceedings (89)2. Retrieved from http://pubs.aeaweb.org/doi/pdfplus/10.1257/aer.89.2.23
Markovich, S. (2014, February 3). The income inequality debate. Council on Foreign Relations. Retrieved from http://www.cfr.org/united-states/income-inequality-debate/p29052
Masidlover, N. & Passariello, C. (2013, February 13). What is recession?: Americans regain a craving for luxury. The Wall Street Journal. Retrieved from http://online.wsj.com/news/articles/SB10001424127887324880504578300291357105904
Mazur, J. (2000). Labor’s new internationalism. Foreign Affairs, 79(1), 79–93.
Milloy, C. (2011, September 13). Study dismisses poverty, but try telling that to the poor. The Washington Post. Retrieved from http://www.washingtonpost.com/local/study-dismissespoverty-but-try-telling-that-to-the-poor/2011/09/13/gIQANZSbQK_story.html
New York City General Assembly (NYCGA). (2011). Declaration of the occupation of New York City. #Occupy Wall Street. Retrieved from http://www.nycga.net/resources/documents/declaration/
Obama, President Barrack. (2013, January 28). Opportunity for all: State of the union address. The Washington Post. Retrieved from http://www.cnn.com/interactive/2014/01/politics/sotu-speech-transcript/
Oliver, R. L. (2010). Satisfaction: A behavioral perspective on the consumer. New York: M.E. Sharpe
Organisation for Economic Co-operation and Development (OECD). (2011a). Divided we stand: Why inequality keeps rising. Retrieved from http://www.oecd.org/els/soc/49170768.pdf
OECD. (2011b). An overview of growing income inequalities in OECD countries: Main findings. Retrieved from http://www.oecd.org/els/soc/49499779.pdf
OECD. (2011c). Gini Scores. [Data File]. Retrieved from http://www.theguardian.com/news/datablog/2011/dec/05/oecd-ineqaulity-report-uk-us
OECD (2011d, December 5). OECD inequality report: How do different countries compare?
The Guardian. Retrieved from http://www.theguardian.com/news/datablog/2011/dec/05/oecd-ineqaulity-report-uk-us
OECD. (2013). OECD factbook 2013: Economic, environmental and social statistics. OECD iLibary. Retrieved from http://www.oecd-ilibrary.org/sites/factbook-2013-en/03/02/01/index.html?itemId=/content/chapter/factbook-2013-25-en
Paton, E. (2013, November 5). Michael Kors beats rivals in luxury retail. Financial Times. Retrieved from http://www.ft.com/cms/s/0/9e781e00-462c-11e3-b495-00144feabdc0.html#axzz2vPC41x7P
Porter, E. (2012, March 20). Inequality undermines democracy. The New York Times. Retrieved from http://www.nytimes.com/2012/03/21/business/economy/tolerance-forincome-gap-may-be-ebbing-economic-scene.html?_r=0
Paulos, J. A. (1988) Innumeracy. New York: Hill and Wang.
Rector, R. & Sheffield, R. (2011) Understanding poverty in the United States: Surprising facts about America’s poor. The Heritage Foundation. Retrieved from http://www.heritage.org/research/reports/2011/09/understanding-poverty-in-the-united-states-surprisingfacts-
about-americas-poor
Saez, E. (2013, February 1). Income inequality: Evidence and policy implications. [Youtube video] Retrieved from http://www.youtube.com/watch?v=t_FbB8Romhk
Soller, K. (2013, September 29). Everlane: Breaking down the markup. New York Magazine. Retrieved from http://nymag.com/news/business/boom-brands/everlane-2013-10/
Symonds, A. (2012, November). Everlane wants you to buy less. Interview. Retrieved from http://www.interviewmagazine.com/fashion/michael-preysman-everlane/
Thompson, D. (2012, April 5). How America spends money: 100 years in the life of the family budget. The Atlantic. Retrieved from http://www.theatlantic.com/business/archive/2012/04/how-america-spends-money-100-years-in-the-life-of-the-familybudget/255475/
Timberlake, C. (2012, March 16. Michael Kors brand takes on Coach in U.S. luxury market. Bloomberg News. Retrieved from http://www.bloomberg.com/news/2012-03-16/michaelkors-brand-takes-on-coach-in-u-s-luxury-market.html
Trump, K.-S. (2012). Perceptions of Income Inequality and Preferences for Income Distributions: Do People Who Perceive Higher Inequality Reject or Accept It? Midwest Political Science Convention, Chicago.United States Bureau of Labor Statistics. (2006) 100 Years of U.S. Consumer Spending: Data for the nation, New York City, and Boston, (991), [Data file]. Retrieved from http://www.bls.gov/opub/uscs/report991.pdf
United States Congressional Budget Office. (2011, October). Trends in the distribution of household income from 1979-2007 [Data file]. Retrieved from http://www.cbo.gov/sites/default/files/cbofiles/attachments/10-25-HouseholdIncome.pdf
Wiedmann, K.P., Hennigs, N., & Siebels, A. (2007). Measuring consumer’s luxury value perception: A cross-cultural framework. Academy of Marketing Science Review, 2007. Retrieved from http://www.amsreview.org/articles/wiedmann07-2007.pdf
Los autores/as que publiquen en esta revista ceden los derechos de autor y de publicación a "Cuadernos del Centro de Estudios de Diseño y Comunicación", Aceptando el registro de su trabajo bajo una licencia de atribución de Creative Commons, que permite a terceros utilizar lo publicado siempre que de el crédito pertinente a los autores y a esta revista.
