The gap between the upper and lower classes has grown significantly in the United States from 2007 to 2016. For a variety of reasons, the rich are becoming richer and the poor, poorer. The prevalence of the middle class has diminished to the extent that its existence is almost as debatable as that of Central New Jersey. I believe that this shift in U.S. class structure has contributed to the recent increase of interest in luxury brands.
Let’s look at a company that I’m sure many NYU students are familiar with: Canada Goose. Canada Goose is a high-end clothing retailer based in — you guessed it — Canada. The company’s most well-known product is its signature coat with a coyote-fur lined hood and a patch on the left sleeve. Popular among NYU students, the coat can cost up to $1100. Not many people can afford a jacket at that price point. For many, that kind of money is a month’s rent. However, NYU students are not the average person, with many coming from families in the top one percent.
Now, I’m not going to debate whether the coat is worth it based on its quality, what alternative jackets there are at a cheaper price point or anything like that. The important thing to note is that, despite the crazy price, Canada Goose is raking in the dough. Profits have risen from $5 million to over $200 million over the last ten years, and they are only expected to increase. Although some may look to internal factors as the source of this success, a different trend reveals itself when you take a step back and look at the bigger picture. It’s not just Canada Goose that is taking leaps forward. Moncler, which has a similar business model, has also been doing extremely well. This trend suggests that perhaps it is not just skilled branding or good marketing, but an increase in disposable income for the rich. In fact, it turns out that the growth in luxury spending is not even comparable to the net worth of the top 10 percent of Americans. It might not be a surprising notion that increased wealth is leading to more luxury spending, but it does force you to recognize what it means for those who are not decked out it Canada Goose.
The problem is, people aren’t only getting richer. As I said before, the wealth gap is increasing on both ends. That means the poor are also getting poorer. The rise of the rich and the success of these luxury brands signal the downfall and decline of citizens on the other end.
Next time you walk around on campus counting how many people you pass wearing a Canada Goose parka, also try to count how many homeless people you pass.That ratio says a lot about how the United States is on its way to becoming the land of extremes and the home of the paid.
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Email Victor Porcelli at [email protected].