Today for Art & Politics we are looking at Coronavirus and the Luxury goods industry.
What are Luxury Goods
In economic terms, luxury goods are those whose demand increases with an individual’s increase in income. In simple terms, the more money you have, the more likely you are to spend it on luxury items. Luxury goods are in stark comparison to essential goods. A house and food and basic commodities. These are the first things an individual would spend their income on. If, after having spend on these, a person still has money let, then they buy luxury goods. Luxury goods can range from a Gucci perfume, channel bag to a Picasso painting and a Rolls Royce. Such items are not essential to one’s survival. They are truly best described as luxuries.
Economic Impact of Coronavirus
It is no secret that the Coronavirus has caused the 2nd global recession in just above a decade. The last time things got so grim was in 2008. And now, that doesn’t even compare to the potential damage this pandemic may cause. In fact, economists over the world are yet unable to determine the full impact of the virus on the global economy. Despite this, we can all agree – even financial survival – let alone stability – will be a victory.
So, in a future where even surviving is a struggle – what will be of the luxury industry?
Looking at Luxury
As mentioned before, people splurge on luxuries when they have extra money lying around. After fulfilling their basic, essential needs. The prospects of that happening once the lockdown ends are bleak. As people will struggle to put their life back together. The labour class will find work after months – and might afford to feed themselves again. The small-scale business community will struggle to get back on its feet. Regular middle-class white collar employees will spend carefully. And the rich may still buy their signature Gucci scent and drive their Rolls Royce. But they certainly won’t spend millions on buying a Picasso.
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