In an Age of Privilege, Not Everyone Is in the Same Boat [View all]

http://www.nytimes.com/2016/04/24/business/economy/velvet-rope-economy.html?_r=0

In many ways, the rise of the velvet rope reverses the great democratization of travel and leisure, and other elements of American life, in the post-World War II era. As the Jet Set gave way to budget airlines, in places like airports and theme parks even the wealthiest often rubbed shoulders with hoi polloi.

These days, whether the provider is a private company or a public agency, special treatment for the very rich isn’t personal, it’s business. Late last year, public officials in Los Angeles agreed to lease a separate facility at LAX to a private firm that would serve celebrities or anyone else willing to pay $1,800 to skip the traffic jams and lines at the main terminals.

Of course, it could be more extreme, and in the past it was.

The Titanic, in the early 20th century, separated the different classes of travelers with metal gates. In the 19th century, French railways refrained from putting roofs on third-class wagons so that passengers who could afford more expensive second-class seats would not hesitate to spend a few extra francs.

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While choices for the rich are expanding, poorer Americans are benefiting less from product innovation, according to new research by Xavier Jaravel, a graduate student in economics at Harvard. Whether they are selling fancy cookware, natural cheeses or single malt Scotch, purveyors of goods aimed at the wealthy are competing more and offering new products. Downscale items like canned meat or tobacco aren’t drawing as many new entrants into the market.

There is also increasing demand from the most affluent shoppers. Spending by the top 5 percent of earners rose nearly 35 percent from 2003 to 2012 after adjusting for inflation, according to a study by Mr. Fazzari and Barry Z. Cynamon of the Federal Reserve Bank of St. Louis. For everyone else, spending grew less than 10 percent.