The pandemic cut off the ultrawealthy from their favorite places to spend money — and their lagging spending, even as lockdowns lift, is hindering the economy's recovery
- The United States is slowly beginning to reopen, but
wealthypeople still aren't spending as much money as they used to — and it's causing the economyto tank.
- Nathan Hendren, a Harvard economist and co-founder of the Opportunity Insights research team, told NPR that this spending lag is likely to continue until there's a coronavirus vaccine.
- Many businesses based in Manhattan that cater primarily to the rich have temporarily relocated service to the
Hamptons, where many wealthy people fled as the pandemic struck New York, in order to stay afloat.
America may be gradually reopening, but the ultra-rich still aren't dropping cash the way they always have.
NPR's Scott Horsley reports that wealthy people in the US aren't spending as much money, and it's having serious repercussions for the outlook of economic recovery.Wealthy people typically spend their discretionary income on high-end
According to NPR, the highest-earning 25% of Americans have been responsible for two-thirds of the total drop in national spending since January. Spending by lower-income households did increase after stimulus checks were released, but the spending of Americans in the top income brackets is still "far off" from pre-COVID levels, Horsley reports."From the perspective of people who are not living paycheck to paycheck, the main concern here is really fighting the virus," Hendren told NPR. "Unless we remove the threat of getting sick or getting your family members sick, it's hard to imagine that spending will recover to the pre-COVID levels."
The ultrawealthy's drop in spending may have a major ripple effect, but some businesses are pivoting to stay afloat
In Manhattan, places associated with money and means have already decided to follow their wealthy customers, many of whom fled to the Hamptons.
Eater's Ryan Sutton reported that the Italian restaurant Carbone now offers a Hamptons pickup service that starts at $500 per week, though one must commit a minimum of four weeks (or at least $2,000).Meanwhile, Business Insider's Katie Warren reported that Avenues, an elite private school in Manhattan, planned to open a Hamptons outpost called Avenues Studio Hamptons, where tuition will be $48,000.
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