The employee now has less money to spend on cigarettes, beer and ecstacy...errr, I mean food, clothing and rent.
LOL! :-)
Actually, I read an article in The Economist last year about how prices of various recreational drugs have plummeted over the years, and the defeat that showed re the "War on Drugs". One example was the price of extacy in London - down from GBP 10 a pop some 10 years ago or so to GBP 3-4 last year. Nobody is screaming "DEFLATION!!!" in that area of the economy, though :-)
With an estimated 500,000 extacy tablets being consumed in London area every weekend, it is not difficult to despair on the future of the "war on drugs", if one can be said to exist in a place where dance radios announce regularly just how important it is to drink copious amounts of water and "cool down" (i.e. "stop dancing for a minute", I guess...) in intervals when one is on extacy :-)
But you could also do the trickle down thing from tech....fewer ferrari's are being bought, so the ferrari salesman has less money....since the ferrari salesman has less money, fewer leisure suits are sold, so the leisure suit salesman has less money, which means the crack salesman has less money so......
You would be surprised at what a small percentage of the overall economy luxury item sales are, and how little they have changed over the last couple of years. Sales of luxury items that I follow (and not just with my credit card :-) have been very robust. I don't know the deal with boats and ferraris, but the smaller ticket items like clothing, bags, jewellery, etc have been growing. |
