Jason Moran
Tuesday, August 08, 2006
  Yuppie Life
During college I minored in Economics because I knew I did not want to major in it, yet somehow I was interested. After taking various courses I find my interest piqued when anomolies or trends pop up in the economic landscape around us. For that reason, and thanks to far more eloquent writers who have penned discerning articles (trading up and rising luxury costs), I have found some trends which seem to directly mirror my own experience and habits. These economic trends actually explain WHY I'm spending like I'm spending.

First off, isn't Godiva Chocolates considered a high-end luxury store? You see, many stores cater their products to the affluent. They look for their niche among the rich because they charge greatly inflated prices for their products. Even Starbucks coffee is supposed to be a high-end commodity. For generations now the poor have shopped at discount retailers and the rich have perused the limited/rare/niche stores that by price simply exclude the non-rich. The "non-rich" in question even includes the masses: the middle class.

However, over the past 10 years a trend disparate to the norm has become evident: the middle class and upper middle class are "trading up". They are picking areas of their lives to live like the upper class. These types of thoughts go into their minds: "I'm a chocolate connoisseur, so it's okay to have Godiva" or "This is my hobby/passion, so I'll just spend a little more on this". The interesting thing is that it sounds perfectly normal to think that way, but it is NOT the way things used to operate.

That type of spending has translated into lower profit margins for Walmart, fast food, etc and huge earnings for the higher end "yuppie" stores. It has become so profitable that many of these "yuppie" stores have built plenty of new stores in very accessible (read: available to the middle class) areas. Now just about anybody can have at least a little bit of luxury in their lives. Some fancy shoes here, a yummy truffle there, a few Frappuccinos here, a nice spa treatment there...

A new trend seems to be starting. Over the past few months the trend is the exact opposite. Starbucks profits are down. Nearly across the board every so-called high-end retailer has come in under their projected earnings...especially during July. Now, we all know that the rich will stay rich and they really won't be hurt badly if the market takes a dip. However, the middle class and upper middle class will be hurt because they are the ones that have already gotten used to trading up and living above their means in a few areas of their lives. The new trend makes it look like the upper middle class is reeling in it's expenditure on luxury items. It's sort of a "You know what, honey? Let's not go out to eat at the Cheesecake Factory and instead just have a little Burger King." Do you know why this is happening? It's because Thorstein Veblen's conspicuous consumption is becoming more and more expensive to partake of (If you are lost that is the guy who came up with the theory that says you buy luxury items to make yourself stand out in a crowd and appear to be wealthy). If you follow the wall street stock index for Starbucks and it's kinsman that target the upper middle class you will see that they have all taken a dip recently. Beyond that, the cost of their items has exceeded inflation. In other words, for every dollar you earn over time you can afford less and less of these luxury items. They are becoming TOO EXPENSIVE for the average person.
 
Comments:
Interesting post...Another thing to note is when a tremendous spike in the price of an inelastic good (gasoline) takes place. Individuals are forced to choose luxeries. For example, any upper middle class soccer mom when faced with the choice of giving up her gas guzzling, status proclaiming Hummer H2 or Land Rover or giving up Godiva and Starbucks, they are always going to give up Godiva for Hershey and Starbuck for Maxwell House. Oh, and keep up the good posts, they are much more interesting than reading about your body mass index and how you just made a new and improved batch of creatine in your basement Meth Lab.

cheers
 
Wow, I got ben to comment...I must've just hit a blogging homerun!
 
Speaking of people named Ben... Jason, don't you think Ben Freeman (appearance, mannerisms) is a lot like Tom Green?
 
ben freeman often looks like he is dazed and just coming out of a wild drug frenzy. tom green often looks like he is dazed and just coming out of a wild drug frenzy.

However, Dave, stay on topic.

Talk about Vicarious Consumption and how you pay your butler with 100s and make him wear Armani suits just so the world can see how many money bags you've got buried in your money bin.
 
I think people buy semi-luxury items because their friends buy semi-luxury items. It has become uncool to be thrifty, or just downright cheap. I used to be downright cheap and I even got a rep for it. Being insecure and always image-concious that I am, I decided I needed to be mo' cool.

Dating or courtship can also have this same effect. "What?? I'm not spending $3.75 for a cup of coffee!" turns into "Oh crap, she'll think I'm a cheap bastard if I don't shell out $7.50 for two coffees at $tarbuck$".

Marriage, and working within a budget can mitigate that, but it's already too late. You've been anti-cheap for the first time in your life and there's no going back.

Take movie theaters for instance. I get p*ssed when they want to charge $6.50 for a large popcorn. Or worse yet, $3.75 for a small pop, $4.25 for a regular, and $4.50 for a large. Even if your large is $4.50, make the small $2.00 d*mmit.

Ok, you've struck a nerve here, because whether I'm cheap or not, I feel like a sucker when I pay those prices. PT Barnum said a sucker is born every minute. In the US, I think that should read "every 5 seconds".

Holy tangent I'm about to go on, but dangit, I won't shop at some Arab-owned dairy-mart type stores (like one near my parents house). On several occasions I have been shorted pennies, or a nickel, or a nickel and some pennies in the change handed to me. It's a deliberate act that many of these owners employ to aggregate their profit margins. They're betting on the fact that Americans are too far-above nitpicking a few pennies. You feel bad for being cheap.

I happened to catch this happening to me, got incensed, and took my bidness elsewhere. That's to say nothing about the ridiculous tax-loops that these foreign owners get to enjoy. (I have nothing against foreigners in general, but the practice of passing your business to a family member every 7 years so you don't have to pay income tax is just flat wrong.)

*breathe* Ok, I feel like Kelmo with this non sequitous rant.
 
All things considered, a $20 tip is a $20 tip.
 
What he didn't mention was that this was a Denny's and Lebron's posse was 107 different people.
 
Not 107 of the same person?! Inconcievable!!
 
Doh! I took the time to italicize those letters and I can't even get the spelling correct.

Blogger needs a spell checker.
 
And for the record, Bode was demanding a new post while letting his blog remain stale for exactly two months.

*quickly takes own blog offline*
 
Oh man! Re-birth of a dreamhouse is gone!
 
I know what the answer is - his initials are DR and with his books and radio program his money managing techniques are spreading rapidly. Way to go Dave Ramsey! Yuppies are finally realizing that they can live on less than they make and their friends won't make fun of them - okay probably not, but that's what common sense tells us. Also I agree with Ben - these posts are much more enjoyable then hearing about your BMI and workout schedules.
 
20 percent is only decent? Holy crap, I must be an arse for routinely tipping between 14 and 22 precent.

With some subtle differences, if I order $133 worth of food or $500 worth of food, the server is essentially doing the same job. By that logic, what right do they have to expect anything different than a $20 tip? (15% and 4% respectively). Percentage means nothing. Bottom line means everything. What was the person's service worth in real world dollars?
 
i must second the fact that $20 is a horrible tip. please don't tell me that anybody reading this blog tips under 20% for good service. i also found this post very interesting re: economics and average american mentality. general lack of personal self-discipline in america i'm sure plays a role. i know it does with my finances....
 
For the record, and not that this has any bearing on my 'arguments' here, but if I were to order $500 worth of food (and I wouldn't), I wouldn't tip $100 and I wouldn't tip $20. I'd be somewhere in there, more than likely. I'd probably tip like $60.

But holy crap, if you worked at a restaurant that frequently had multiple-hundred dollar checks you'd make friggin' hundreds of dollars every day.

As another example, local mom and pop pizza shops. I happen to know they have a hard time hiring and keeping drivers, especially with gas prices and using your own car for delivery and whatnot. I want to help the local businesses out by making it easier for them to retain decent employees. So if I order a $10 pizza, I tend to give at least a $3 tip. Now that works out to 30%! WHAT? 30%?? That's insane! But the percentage is not what matters. It's the bottom line dollar amount.

Where did people develop this sense of... morality? concerning tip percentages? It's absolutely meaningless. I guess it's meant as more of a guide for those that might otherwise tip 40 cents on a $38.60 bill.
 
*shakes head*

Man, $20 a horrible tip. That table would NOT have been the only table that said server would have been serving during that hour to hour and a half's worth of dining.

Rather, server might have had 7 or 8 tables during that hour to hour and a half. Average tip of say $9, over those 7 tables plus the $20 from leBro. That's 83 dollars an hour, or, if over a period of 90 minutes, 55 dollars an hour.

Now, I know servers divvy out chump change to bus boys and food runners and whatnot, but dizzang! That's some phat dough!

Yizzle.
 
Trust me, I'm not an a$$ to servers. Instead, I'm probably overly polite and don't ask for things 95% of people would ask for. I just accept it and live with it. I try to make their job easy. Heck, my wife and I neatly stack our plates and silverware and all that before we leave a restaurant.

But I just don't have pity for those hardworking souls that DO make a good living doing what they do but happen to get the odd 9% tip (or 5% or 6%) on a HUGE bill. They still come out smelling like roses (and leftovers).
 
I agree with everyone.

Is that impossible? No. Once you get over a $100 bill (for 2 people), the service cannot be THAT MUCH BETTER to really call for a full 20% tip. I do the same thing. On the rare occasions that I have bills over $75, I usually start to decrease my tip to about 15%...and if I started to routinely get $150 dinners I would probably drop it down to 10%.

It's definitely not about the total bill amount, it's about the service received. However, in the exact case originally brought up $20 was definitely not enough of a tip.
 
Oh...I just wanted to illustrate the opposite point. If you go to Applebees during happy hour and the 4 of you order all half-priced appetizers and waters and sit there for 2 hours yelling at each other and getting 8 re-fills of water...DO NOT leave the 15-20% tip ($0.60 to $1.00) per person.

Obviously you should leave that wait-staff a bare-minimum of $5, and hopefully more.
 
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I Agree With Jason™.
 
Hey, I'll give you that one. If an employee of any place, say, Chipotle, gives me something free or discounted, anywhere from 50% to 100% of that discount goes right into the tip jar.

Less money goes to corporate and more money goes into the employees' pockets that way, and I'm still satisfied because I paid what I went in expecting to pay.
 
Does anybody else really want to know what the heck Dave and Kelly said before they deleted their comments?
 
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I agree with Bode.

And I would just to say that I gave wonderful service to a family of 3 and their check was $51 and guess how much they left me. $5.00.
 
Bode, if the manager took her off her regular tables and restricted her to one, he knew the risk he was putting her into. (he's in the business after all). The restaurant made beaucoup bucks off LeBro and posse. Said manager should have compensated your sister.
 
Yeah, tipping is good. It turns out they started to fill my cup up with anti-freeze instead of Mountain Dew.

It's just about the same thing anyway.
 
I hereby resolve never to eat out again at a restaurant that requires tips.

There, that should settle that. Now I will never ever leave less than a 15% tip.

Should help the servers out, right?

Note: I'm just playing devil's advocate here. As stated before, I'm a decent to good tipper. I just hate many of the arguments here and loathe the American public's general sense of entitlement, which I sense coming through here.

Has nothing to do with a sense of common decency, courtesy, gratitude, or generosity.
 
The famous dialogue from Reservoir Dogs that relates to our discussion:

NICE GUY EDDIE: Okay, everybody cough up green for the little lady.

NICE GUY EDDIE: C'mon, throw in a buck.

MR. PINK: Uh-uh. I don't tip.

NICE GUY EDDIE: Whaddaya mean you don't tip?

MR. PINK: I don't believe in it.

NICE GUY EDDIE: You don't believe in tipping?

MR. WHITE: I love this kid, he's a madman, this guy.

MR. BLONDE: Do you have any idea what these ladies make? They make shit.

MR. PINK: Don't give me that. She don't make enough money, she can quit.

NICE GUY EDDIE: I don't even know a Jew who'd have the balls to say that. So let's get this straight. You never ever tip?

MR. PINK: I don't tip because society says I gotta. I tip when somebody deserves a tip. When somebody really puts forth an effort, they deserve a little something extra. But this tipping automatically, that shit's for the birds. As far as I'm concerned, they're just doin their job.

MR. BLUE: Our girl was nice.

MR. PINK: Our girl was okay. She didn't do anything special.

MR. BLONDE: What's something special, take ya in the kitchen and suck your dick?

NICE GUY EDDIE: I'd go over twelve percent for that.

MR. PINK: Look, I ordered coffee. Now we've been here a long fuckin time, and she's only filled my cup three times. When I order coffee, I want it filled six times.

MR. BLONDE: What if she's too busy?

MR. PINK: The words "too busy" shouldn't be in a waitress's vocabulary.

NICE GUY EDDIE: Excuse me, Mr. White, but the last thing you need is another cup of coffee.

MR. PINK: These ladies aren't starvin to death. They make minimum wage. When I worked for minimum wage, I wasn't lucky enough to have a job that society deemed tipworthy.

NICE GUY EDDIE: Ahh, now we're getting down to it. It's not just that he's a cheap bastard--

MR. ORANGE: --It is that too--

NICE GUY EDDIE: --It is that too. But it's also he couldn't get a waiter job. You talk like a pissed off dishwasher: "Fuck those cunts and their fucking tips."

MR. BLONDE: So you don't care that they're counting on your tip to live?

MR. PINK: Do you know what this is? It's the world's smallest violin, playing just for the waitresses.




MR. BLONDE: You don't have any idea what you're talking about. These people bust their ass. This is a hard job.

MR. PINK: So's working at McDonald's, but you don't feel the need to tip them. They're servin ya food, you should tip em. But no, society says tip these guys over here, but not those guys over there. That's bullshit.

MR. ORANGE: They work harder than the kids at McDonald's.

MR. PINK: Oh yeah, I don't see them cleaning fryers.

MR. BROWN: These people are taxed on the tips they make. When you stiff 'em, you cost them money.

MR. BLONDE: Waitressing is the number one occupation for female non-college graduates in this country. It's the one jab basically any woman can get, and make a living on. The reason is because of tips.

MR. PINK: Fuck all that. Hey, I'm very sorry that the government taxes their tips. That's fucked up. But that ain't my fault. it would appear that waitresses are just one of the many groups the government fucks in the ass on a regular basis. You show me a paper says the government shouldn't do that, I'll sign it. Put it to a vote, I'll vote for it. But what I won't do is play ball. And this non- college bullshit you're telling me, I got two words for that: "Learn to fuckin type." Cause if you're expecting me to help out with the rent, you're in for a big fuckin surprise.

MR. ORANGE: He's convinced me. Give me my dollar back.

JOE: Okay ramblers, let's get to rambling. Wait a minute, who didn't throw in?

MR. ORANGE: Mr. White.

JOE: Mr. White? Why?

MR. ORANGE: He don't tip.

JOE: He don't tip? You don't tip? Why?

MR. ORANGE: He don't believe in it.

JOE: He don't believe in it? You don't believe in it?

MR. ORANGE: Nope.

JOE: Shut up! Cough up the buck, ya cheap bastard, I paid for your goddamn breakfast.

MR. PINK: Because you paid for the breakfast, I'm gonna tip. Normally I wouldn't.

JOE: Whatever. Just throw in your dollar, and let's move. See what I'm dealing with here. Infants. I'm fuckin dealin with infants.
 
Dude! Entitlement? In the United States servers only get paid 2.13 an hour b/c tips are their wages.

If you don't want to tip your servers then move to Europe where servers get paid $18 an hour and give you the worst service ever.

T.I.P.S To Insure Proper Service. Don't tip me, I'll remember who you are buddy. I'll remember. *crazy face*
 
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It's like minimum wage. Raising the minimum wage is the worst farking idea ever. Working at KMart or Sears or McDonald's is a TRANSITIONAL job. It's for teenagers, college students, and old people who just want to keep busy.

If you're stuck in a minimum wage job, you need to suck it up, get some training (VOLUNTEER to apprentice with someone for no pay if you can't afford formal training) and go find a skilled job. It IS possible. It is and has been the "American Way". It's about a desire to work, succeed, and become upwardly mobile.

They want to raise the minumum wage so that ANYBODY earning it can support a family of four (even if they don't HAVE a family of four). Walmart jobs aren't for people with a family of four. You're not supposed to make a career out of standing there watching someone self-checkout.

So you raise the minimum wage to 10 an hour, 12 an hour, 18 an hour. Now, Walmart can't afford to sell those goods at their low prices, so they must raise the prices, and these same employees making 18 an hour cannot afford to shop there. Now what do you do? Raise the wage again?!

Anyone who studies microeceonomics learns that when governments institute any kind of price control, whether it be a price floor or a price ceiling, economic waste is generated.
 
Dave, along those same lines is Pareto efficiency, which states that an optimal state can be achieved by moving up one person while not hurting any others. If any advance hurts others then it is not a pareto optimized change.

Oh, and I like the T.I.P.S. thing...with the exception that it makes more sense to be T.E.P.S. (To Ensure Proper Service).
 
I do, however, really like the T.I.P.S. (To Insure Proper Service) idea. If you paid money into that and you did NOT get proper service, then the insurance would pay out (most likely paying for your meal).

Maybe you could purchase some TIPS before you sat down for your meal and if the meal went well then you are out of your money (and it goes to the server), but otherwise you get free food! I love this idea.
 
Jason, that's an awesome idea. I've frequently felt like I've been bent over royal after I've paid for a meal and/or service.

Like, when I go to McDonald's and tell them No Mayo on my chicken or No Weird-Azz Hollandaise Sauce on my breakfast sandwich, and they put it on there anyway.

I can't eat it. But it's too late. I've already driven away. It sucks royally.

We also, 7 of us, ate at the Key West Cafe at Broadway at the Beach in Myrtle Beach, SC. They screwed up 3 out of 7 meals, had slow service, and we were the only people in the joint. They didn't comp anything. It was awful.
 
Holy geez, it'd be like car insurance! Bear with me, this argument is great!

If you get into an accident/get lots of tickets, your car insurance costs more. Okay, now onto food service.

The waiter/waitress HAS TO buy wait-insurance. That way they are never personally responsible for a comped meal, the insurance pays out. However, now they have a negative point against their insurance and the cost goes up.

The end effect is that good wait-staff get a full 20% for every meal while bad ones are only getting like 11% after their wait-insurance payments! And it's all pre-included in the meal cost.
 
Ding ding ding, we have a winner.

As with any business, it's the problem of sucky people vs good people.
 
Personally, I do not think it is fair that minimum wage has not increased in 10 years, while inflation has gone up at an average rate of 3.1% per year over that same timespan.

This is a problem with having a minimum wage in the FIRST place. Let the markets set the wages.

While, at the same time, college tuition has gone up an average of 31% over this same timespan (if that is what these kids are supposed to be saving for), while government help for college has gone slightly down.

First, college tuition going up that dramatically is insane, and another problem. #1, College is not for everyone, and if rates continue to rise at this pace, we'll see more and more people leaving and going right into the workplace. #2, College is insanely bloated. Colleges do not need $37 million dollar athletic facilities. The primary purpose is academics. I went to a private college that was more highly selective than Harvard and paid less than my wife who went to a public state school, Kent State. #3, Kids are also trying to 'find themselves' in school wasting both their and their parents money. They spend 5 and 6 years piddling away thousands of dollars while at the same time precluding themselves from earning a salary. My parents did not pay a DIME towards my higher education. It was my money on the line, so I busted my arse to get out in 3 years. Less tuition expenses, another year of income. #5, as you'll note, I didn't say that those in minimum wage jobs had to seek college as their only alternative. What ever happened to skilled vocational trades and apprenticeships?


I would like you to personally tell the 16 yr old that happened to get pregnant in a poor neighborhood

School of hard knocks. I chose not to play around until I was married. I didn't have those problems. Life's not easy. The founding fathers didn't guarantee happiness, only the persuit of it.
 
As an example, college did little to prepare me for my work in the computer field. I went to a small liberal arts school that knew nothing about computer science.

How'd I end up where I am? Volunteering doing web development in '97 (of which I knew nothing, but I was free) then taking an $8/hour job doing the same at a later point. I continued this work, on every break (summer, winter, etc) while in college. I continued to self-train and sought certification in my industry.

I feel the value of college will dwindle vs its cost at some point unless things change and I'd argue many could make a great living in SOME areas of IT without going to college.
 
Does anyone else find it funny that Jason has deleted comments on this post, but yet has included a larges section of dialog from "Resevoir Dogs"? I am trying to get a grasp as to what type of comment falls under the "deletable" category and which comments make it through.

*pondering face*
 
On another note, A very interesting dialog on the minimum wage between Dave and Bode. Also, you can tell that Bode has been married for awhile by the way he so effectively added "...that and the fact that my wife is a great cook" - Impressive
 
i think that most comments deleted were deleted by the author not the blog owner. B/c mainly they've been mine and after posting I've realize what I just said makes in little sense if I would have just continued to read on, but I don't take time to that kind of stuff.

Dave I would like you to consider the thought that a young 20 year old girl falls in love with an incredible guy, has 2 kids only to find out that the incredible guy has lost interest in her and now she's got 2 kids and no income and no education b/c the life she had planned didn't require it. Now, she's forced into taking a minimum wage job and you're saying that it's her fault she can't afford to live b/c of her life choices? Shit like that happens every day to every kind of person out there and I don't want to her some white suburban guy who's never had to struggle through poverty tell someone to suck it up. I'm not down with that.
 
Sh*t. I'm 27 and we've chosen not to have kids yet because we don't think we can afford and support them.

I'd think long and hard about having them at 20.
 
*reminds himself that white males, especially those in suburbia, are never permitted to have an opinion that counts for anything*

"Man, what was I thinking."
 
Dave, you're making so many good points...yet I think you may come away from this post somewhat less liked than you came into it.

Ben, I haven't deleted a thing..it's the commentors that have removed their own comments.

Kelmo, Dave will not agree with you and you will not agree with him. I know both of you enough to know that you think some predicaments are unavoidable and he thinks proper planning always leads to success. Agree to disagree.

Bode, I agree our system does not guarantee success for everyone, and it may very well almost prohibit others from success, however, going back to the social norm of a strict percentage of tipping: The more I ponder it the more I think it's a pretty stupid social norm that I might altogether abandon support of. I might start tipping exclusively based on the amount of service provided. It'll probably end up being great for the cheap meals I get and bad for the expensive ones I get.
 
One last thing. The most direct response to the original post was made by Ben: "Another thing to note is when a tremendous spike in the price of an inelastic good (gasoline) takes place. Individuals are forced to choose luxeries."

I will agree that gasoline prices are changing lifestyles to some extent, so great point, Ben
 
Everyone - Keep telling yourself "...the reason you don't have kids yet is that you don't think you can afford and support them." When people say this there are other reasons that they have chosen to not have any kids (mostly selfish) which is absolutely fine, but it makes my blood boil to hear men and women with good careers hide behind the excuse of money. The only currency you need to sustain children is the ability to care for them unconditionally.

I know this is going to piss some people off, but to those who know me. Have I ever really given a shit what other people think about me?

*BAMF Face*
 
The weird thing is that while I used to be completely price sensitive to gasoline, I no longer am so.

I am now running on 100% free gasoline (and diesel, for my tractor). Giant Eagle fuel perks (and the rechargeable mastercards they sell) are a great thing.

The general market's price sensitivity allowed Giant Eagle to reduce discounts on food and increase discounts on gasoline, costing themselves less but creating a situation where consumers perceive that they're winning.
 
Ben, I wholeheartedly agree with you. We're never "ready" to have kids, never will be. It'll just have to be God's timing. He'll provide, we'll adjust.

But then again, we could have chosen not to persue our careers, would not be nearly as successful, might be begging for minimum wage increases, and we'd be just the same in God's eyes. He doesn't care whether I make $10,000 or $100,000.
 
2 Comments:

1. Dave - I sincerely apologize if my comment seemed to be directed at you. It was not intended to be.

2. I have also adopted a policy of non price sensitivity when purchasing gasoline. I have been using the theory that "the gas station with the best convenience store, is the best place to buy gas at said time and place" I have found that picking up a bottle of Nantucket Nectars Lemonade, Cherry Coke and even on occassion a 6 pack of Guiness (DROUGHT :)) can do wonders to ones psychy. It can even make them forget they just paid over $3 a gallon for gas.

Yes, I know I spelled several thing incorrectly including the word DROUGHT

*Happy Face - I am going home*
 
I was thinking about having a Guinness DROUGHT tonight. However, I picked up some Young's Double Chocolate Stout and it is really, really good.
 
Hello Jason. I'm just looking for some friends with the same love for God that I have. :-) I'm Margo. Nice to meet you!
 
Wow! That story is insane. Maurice could get some serious cash by selling his story as a movie script!
 
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