How plutonomy, premiumization, and social media squeeze the middle class - an excellent read
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The rich have a gravitational pull on the economy, dragging it in their direction. According to economic researchers at Moody’s Analytics, the top 10 percent of Americans earners are now doing almost half of the spending. Even those economists who dispute this specific number concede that the wealthiest Americans are doing an outsized amount of consumer spending. The wealth of the top 10 percent is up to $113 trillion, up $5 trillion just between April and July, according to Federal Reserve data. The top 1 percent holds $52 trillion in wealth, a new record.
That matters for several reasons. First, it produces an unclear picture of the economy. Even though the majority of Americans are feeling the squeeze of inflation and rising unemployment, the ultra-wealthy are doing well enough to keep spending, which makes it look like everyone has kept spending.
If you stop looking at averages and check the wealth of who’s actually spending, you can better understand the economic realities for the majority of Americans: There’s one line steadily going up, and another going down. That’s why some call ours a “K-shaped” economy—two lines headed in opposite directions. Others call it a plutonomy, a portmanteau of “plutocrat” and “economy,” signaling the disproportional power of the ultra-wealthy over our entire financial system.
If wealthy consumers are responsible for the lion’s share of spending, the logic goes, companies might as well raise their prices—the primary buyers can afford it.
“If you can come up with something that [rich people will] regard as special, you can really make a lot of money selling to them,” said Robert Frank, a professor of management and economics at Cornell. “So, a lot of the ingenuity in the economy gets directed to things that we would think of as less than essential.”
That’s the idea behind premiumization, a marketing trend that encourages companies to brand their products as high-end and sell them to wealthier consumers. A Forbes article describes premiumization as a “strategic move by consumer brands to elevate product offerings and charge higher prices.” The push for premiumization is largely driven by demand—wealthier consumers have more money to spend and are looking for “premium” ways to spend it—but it is also spurred on by inflation, which pushes companies to justify price hikes with a shiny exterior.
Much more …. very interesting
https://prospect.org/2025/12/01/premiumization-plutonomy-middle-class-spending-gilded-age/