ELIZABETH CURRID-HALKETT, associate professor of urban planning, USC’s Price School.
This op-ed originally appeared in the New York Times on Nov. 10.
In 1899, the sociologist Thorstein Veblen scathingly critiqued what he called the “conspicuous consumption” of America’s upper class. The rich were so obsessed with their social status, he wrote, that they would go to gratuitous lengths to signal it. His famous example was silver flatware: handcrafted silver spoons, though no more “serviceable” than and hardly distinguishable from aluminum ones, conferred high social rank and signaled membership in what he called the “leisure class.”
A silver spoon is no longer a mark of elite status. Take the nation’s top 10 percent of households. The top 1 percent — those making more than $394,000 annually — are today’s version of Veblen’s leisure class in terms of wealth, but they are not the biggest buyers of silver flatware. Instead, households in the rest of this high-earning cohort — those making between $114,000 and just under $394,000 — take the silver prize.
Many of the consumption habits of this “aspirational class,” as I call it, the people who want to join the top 1 percent, or who may appear to be in it already, better conform to Veblen’s idea of conspicuous consumption. They outspend everybody else by big margins on fresh flowers and plants, bottled water, crystal glassware, gigantic refrigerators and the latest oversize sport utility vehicle.
By contrast, while overall household expenditures of the top 1 percent are just over 1.5 times more than the rest of the top 10 percent, they spend significantly more on “experience-based luxuries.” In 2011, for example, the top 1 percent spent three times as much as the aspirational class on gardening and lawn services, babysitting and nannies, and exclusive credit cards than the rest of the top 10 percent.
To get at these changing consumption trends, my doctoral student Hyojung Lee and I have been analyzing the Consumer Expenditure Survey, a data set issued by the Bureau of Labor Statistics. Using data from 2010 and 2011, we have been looking for macro patterns in American consumption habits across cities, income groups and race. What results is a surprising view of how wealth is spent in America today.
Signaling social status through consumption is far more challenging today than during Veblen’s time. Economic growth since the Industrial Revolution has created a large middle class and made the trappings of the moneyed affordable to many more people. Henry Ford gave us the Model T. Levittown made the suburban house the embodiment of the American dream.
More recently, the rise of fast fashion — H & M, Forever 21, Armani Exchange — has made runway looks available for $30 rather than $3,000. Knockoffs are so credible it may seem almost foolish to buy the real thing; “fake” fashion culture has made clothes an unreliable indicator of social class.
In response, the top 1 percent seek to impress more through subtlety than ostentation. Clothing with megaphone labels is shunned. Bottega Veneta handbags and wallets, which sport no label, are prized for their leather weave. Bespoke suits from London’s Savile Row signal wealth only to those who know that the sleeves have working buttonholes rather than buttons sewn on.
Not all of their purchases are expensive, either. While the price of Ballet Slippers, the default nail polish of many wealthy women, is far from prohibitive, one must first “buy” access to the information that tells you to wear it, and how.
Of course, when it comes to luxuries that can’t be faked, the top 1 percent are fervent spenders. Compared with the rest of the top 10 percent, they spend twice as much on college tuitions, three times as much on private elementary and high school tuitions and three times as much on tutoring to get their children into elite institutions. They spend almost four times more on political and charitable contributions.
Veblen would recognize a profound difference between his leisure class and today’s top 1 percent. In his time, conspicuous consumption was largely frivolous. Buying silver spoons did not change a person’s life prospects; it only signaled high social rank. A university degree, another marker of social standing, was possible only for those with plenty of leisure time.
The conspicuous spending of today’s top 1 percent, by contrast, is purposeful. It affects one’s life chances. Most wealthy people work long hours, and the goal of much of their spending is to save time or make more money.
They spend heavily on education to ensure their children will have a sizable advantage in the future job market. A degree from an elite university, rather than connoting leisure time, is seen as an important career step.
And they spend to secure more of what Veblen’s elite already had — leisure. Nannies, gardeners, housekeepers and first-class nonstop airline tickets are the means.
The consumption habits of the top 1 percent will shape future politics because their children will be the ones with political and economic power. This new elite spending is an investment in their class’s future, signaling the perpetuation of today’s divide between the nation’s top earners and everyone else. And there’s nothing a Louis Vuitton bag, a tiny Chihuahua or a silver spoon can do to change that.