Rich Americans Spend More on Luxury Goods
Wealthy Americans, who are expected to increase their spending on luxury items by 8 percent to $359 billion this year, are no longer embarassed at flaunting their wealth despite an economic slowdown which has caused hardship on many who have lost their jobs, David Arnold, publisher of luxury magazine the Robb Report told CNBC.
"I think there was a moment certainly in 2009 when people felt that (embarassment), but in 2010 the luxury car market including Maserati, Lamborghini and Aston Martin saw growth of about 60 percent so that was a substantial increase after what was a fairly depressed market in 2009," Arnold, whose Robb Report targets affluent US consumers said.
"That conspicuous consumption feeling or that concern has really diminished over the last 18 months or so," he said.
The number of people classed as super rich has also grown, according to Arnold.
"The number of people with $30 million or more in investable assets grew by 10 percent last year. This group accounts for 36 percent of wealth globally. That's a lot of wealth held by a small number of people," he said.
"They continue to spend money, travel, buy planes, cars and jewelry. There certainly doesn't seem to be any slowdown in their attitude or appetite for consumption," Arnold said.
Arnold did little to dispel the commonly-held belief that the rich pay less than their fair share of taxes, but warned that taxes targeting the rich specifically had an adverse effect on employment.
"They are very good at avoiding taxes and that's an issue, but I think that at the end of the day these people will continue to invest in luxury items," he added.
Governments in the developed world have made a political point by targeting the wealthy through more punitive tax policies. However, Arnold said the taxes ended up targeting the workers within the luxury goods market.
"You look at a situation where someone purchases a luxury yacht and it keeps around 600 people employed for 9 months to a year depending on the scale of the yacht so there is definitely a knock-on effect.
"The unemployment issue in this country is substantial and there seems to be no end in sight. The luxury market employs hundreds of thousands of people globally and as people consume luxury goods they continue to hire experts and craftsmen," he added.