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Kirchstein1

CallieKirchstein
Mr.Phillips
HonorsCML
22May2016
WealthinequalityinAmericaandtheresultantconsumerhabits
Wealthinequality,ortheunequaldistributionofwealth,isaheavilydebatedtopicinthe
UnitedStates,anationthat,accordingtoInequality.org,exhibitswiderdisparitiesofwealth
betweenrichandpoorthananyothermajordevelopednation.Tosome,likeSupremeCourt
JusticeLouisBrandeis,wecaneitherhavedemocracyinthiscountryorwecanhavegreat
wealthconcentratedinthehandsofafew,butwecanthaveboth.Toothers,wealthequalityis
aformofsocialism.TheAmericanmajority,however,isnotawareofthedisparityatall.Yet
onedoesnothavetobeaneconomisttonoticetheimbalanceitcanbeseenineverydaylife,
evenintheconsumerhabitsinrelationtoentertainment.ThepresenceoftheVIPexperienceat
amusementparks,theimplementationofinternetbasedstreamingwebsites,andthegeneral
deficitinoutoftownentertainmentspendingallpointstoonesource:inequality.
TheveryexistenceoftheVIPExperienceinAmericanbusinessesindicatesthe
inequalitybetweentherichandthepoor:middleclassAmericans,willingtopayhundredsof
dollarstofeelliketheupperclass,wantimportanceandsecurity,valuesseverelyingrainedinto
Americanculture.Adrivingforce,consumerismteachesAmericansthatthekeytohappinessis
throughmaterialitemsparticularlythemiddleclass,whoareconstantlybombardedwith
advertisementsthatdepictconsumerismashighlydesirable.AccordingtoZachHellerof
Business2Community,Peoplelikethingsthatareexclusive...theywantthingsthatsignaltothe


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worldthattheyareoneofaselectfew.Amusementparks,baseballstadiums,museums,
concerts,cruiselines:allplacesthatonecanfindtheVIPExperience.Consumersfeel
pamperedlikeastarwiththeUniversalStudiosVIPPackage,whoseadvertisementsexploit
thewordsexclusive,private,andVIPtofeedonthevaluestaughttotheAmericanmiddle
class.Theofferincludesapersonaltourguide,privatedining,personaltransportation,backlot
access,frontofthelineescorts,andvaletparking.Fueledbyadesireinthemiddleclasstoseem
asiftheyvemadeit,VIPProgramsalloweveryonetofeellikeanupperclasspersonforjust
oneday.TheincreaseinVIPprogramsisproblematicbecauseitsignalsagrowinggapbetween
theclasses:middleclasspeoplefindtheAmericanDreamofrisingupthroughsocialclasses
unattainable,andbusinessescapitalizeonthis,tellingthemthatspendingmoneywillsolvetheir
problems.Essentially,advertisersteachconsumersthatiftheyfeelliketheupperclass,thenthey
becometheupperclass.Ironically,themoneythatmiddleclassindividualsspendonVIP
Experiencesfunnelstothewealthy,onlywideningthewealthinequalitygap.In2015,the
averagepayforCEOswas$15.5milliondollarsperyear,thetypicalCEOearningmorethan
819timeswhataworkerearningminimumwagewouldtakehomeinayear(Thompson).
Whilethemiddleclasspayshundredsofdollarsoutofpockettoliveliketheupperclass,the
upperclasstakestheirmoneyandinstillsthefalseideathatthewaytothetopisthrough
materialismandspending.
ThroughtheriseininternetbasedstreamingwebsitessuchasNetflix,Hulu,andAmazon
Prime,newmiddleclassentertainmentsourceshaveemerged.Themovieindustryhastakena
sharpturn,withmovietheaterattendancedownby5.1%in2014(Kuittinen),andNetflix
subscriptionsupbymorethan20%from2014to2015(Bowman).Simplyput,consumersfindit


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cheaperandmoreaccessibletowatchathome.Middleclassconsumers,acultureheavily
valuingchoice,havethousandsofoptionsformoviesatalowerpricepermonththanasingle
ticketinthetheater:atthebeginningof2016,movieticketpricesaveragedaround$9.76(Bond),
withthecostofaNetflixsubscriptionremainingsteadyat$7.99permonth.Onereasonforthe
riseinticketpricesisthatmovieproducersspendmoreandmoremoneyonhighbudget
productionsfeaturing3D,specialeffects,andCGI.Thecostoftheseproductionspairedwiththe
shrinkingnumberofmoviegoershascausedtheneedtoraisethepriceofticketsinorderto
achievethesameamountofprofit.However,tostayintheirupperclassstatus,producersrequest
themoneyofmiddleclassAmericanswhocannotaffordthepricechange.Thisonlywidensthe
wealthinequalitygap,asmiddleclassAmericansnolongerhavetheincometocopewiththe
risingticketprice,andnowrelyoncheaperstreamingwebsites.
Furtheringthetrendofathomeentertainmentoutlets,middleclasspeoplehavebegunto
spendlessonoutsiderecreationandmoreonentertainmentintheirhomeandsurroundingtowns.
AccordingtoaWhiteHutchinsoneNewsletter,middleincomehouseholdsaretakingfewer
tripsandspendinglesswhentheydo,whilebasicallymaintainingtheirentertainmentspendingin
theirlocalcommunities.Outoftownsportingeventsweredown32%from2000to2010,and
outoftownentertainmentwasdown57%(WhiteHutchinson).Becauseoftheexpandingwealth
inequality,middleincomepeopledonothavethefundsforoutoftownleisurespending,and,
becauseofthecheaperpriceandaccessibility,nowrelyonmorelocalentertainment.According
totheU.S.BureauofStatistics,middleclasspeoplespendonly17%oftheirentertainment
budgetonfeesandadmissions,whereastheother83%goestowardsthingslikeaudioandvisual
equipmentandotherrecreationalsupplies.Furthermore,middleclasshouseholdshaveincreased


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theirexpenditureongamblingfrom22%in2000to35%ofentertainmentspendingin2012,
anotherreasonwhystaycationshavebecomemorecommon,becauseoftheproliferationinthe
numberoflotteriesandcasinosthroughoutthenation(WhiteHutchinson).Middleclass
Americanssimplydonotneedtotravelinordertogamble.
Anotableargument,however,againstthenotionofwealthinequalityassertsthat
gamblingistieddirectlytotheFrontiermyth,themythoftheselfmademan,andthelarger
mythoftheAmericanDream(Duncan).Theargumentstatesthat,becausegamblingrelatesto
theAmericanDreamofrisingupinsocialclass,gamblingisonlydonewhenpeoplebelievein
theAmericanDream.Accordingtotheargument,ifwealthinequalitywasreal,whywould
peoplestillbelievethattheycouldriseinsocialclass?Theanswerissimple:theydontknow
theyareunequal.RespondentstoastudybyMichaelI.NortonofHarvardBusinessSchooland
DanArielyofDukeUniversityvastlyunderestimatedtheactuallevelofwealthinequalityinthe
UnitedStates,believingthatthewealthiestquintileheldabout59%ofthewealthwhentheactual
numberiscloserto84%(Norton&Ariely).Wealthdisparity,therefore,isnotruledoutby
gambling.Infact,eveniftheywereawareoftheinequality,Americansexhibitageneral
disconnectbetweentheirattitudestowardeconomicinequalityandtheirselfinterestandpublic
policypreferences(NortonandAriely).
Itcanthereforebestatedthatconsumersdonotpurchasebasedonhowtheyperceive
wealthinequality,butbyhowitaffectsthem.Entertainmentspendingreflectsthisbecause
middleclasspeopleexpendtheirmoneybasedonwhattheyhave,andtheythereforepayless
moneyonmoreexpensive,outoftownventures,andmoreoninhomeentertainmentsuchas
Netflix.Anexceptionofthis,however,isintheconsumptionofVIPexperiences,as


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middleclassindividualswanttofeelabletoachieveanupperclassstatus.Allofthisreflects
bothconsumercultureandincome,demonstratingthatentertainmenthabitssuchasVIP
packages,moviestreaming,andinhomeentertainmentallleadbacktothesimilartopicof
wealthinequality.


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WorksCited
Bond,Paul."RegalBeatsEarningsEstimatesasAverageMovieTicketPriceHits$9.76."
The
HollywoodReporter
.TheHollywoodReporter,9Feb.2016.Web.22May2016.
Bowman,Jeremy."HowNetflixIsClosingTheCurtainsOnMovieTheaters."
TheMotleyFool
.
TheMotleyFool,10Jan.2015.Web.22May2016.
"ConsumerSpendingonEntertainmentbyHouseholdIncomein2013:TheEconomicsDaily:
U.S.BureauofLaborStatistics."
U.S.BureauofLaborStatistics
.U.S.BureauofLabor
Statistics,21May2015.Web.22May2016.
Duncan,AaronM.
GamblingwiththeMythoftheAmericanDream
.44thed.N.p.:Routledge,
n.d.Print.RoutledgeResearchinSport,CultureandSociety.
"ExclusiveThemeParkBenefits."
UniversalStudiosHollywoodExclusiveThemeParkBenefits
.
UniversalStudios,n.d.Web.22May2016.
Heller,Zach."HowtoUseExclusivityinMarketing."
Business2Community
.N.p.,16July
2014.Web.22May2016.
Kuittinen,Tero."NetflixIsStartingtoWoundtheMovieIndustryWhereItHurtsMost."
BGR.com
.BGRMedia,2Jan.2015.Web.22May2016.
Norton,MichaelI.,andDanAriely.
PerspectivesonPsychologicalScience
.N.p.:Sage
Publications,n.d.
People.hbs.edu
.SagePublications.Web.22May2016.
Thompson,Mary."It's'aDisgrace':ThisIsHowMuchMoreCEOsMakethanWorkers."
CNBC
.CNBCLLC,17May2016.Web.22May2016.


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"TrendsinMiddleclassEntertainmentSpending."
WhiteHutchinson.com
.WhiteHutchinson,
Feb.2012.Web.22May2016.
"WealthInequality|Inequality.org."
Inequality.org
.InstituteforPolicyStudies,n.d.Web.22
May2016.