Food, Home and Style

Pampering to Plump the Economy

We’ve heard the nation’s leaders warn that we can’t really dig ourselves out of this economic ditch until consumer confidence returns—in other words, until we all feel safe enough to get out there and shop. But this plan of action feels rash. Excessive, reckless, down-payment-in-shoes-style consumption is what got us into this mess. And who needs another pair of strappy sandals anyway? But there is one kind of shopping that can help make a difference. It’s the most indulgent, frivolous, pamper-me style shopping—the kind you’ve probably become too monkish to consider. But it’s the best thing for the economy, and for your toes, especially if you’re wearing last year’s styles.

One of the best ways to stimulate the economy yourself is to spend money on personal services, according to Dean Baker, founder of the Center for Economic Policy Research. “Personal services” is finance code for manicures and pedicures, facials, babysitters, lawn care, and dog groomers. Apparently, this is a more efficient and effective form of consumerism, for yourself and the economy as a whole. Service industries generally have low overhead and spend more of their revenue on paying staff than a typical store. They are also often locally owned, keeping your dollars not just within the country’s borders, but in your own community.

Retailers spend most of their revenue on two things: merchandise and labor. They have to pay for the physical goods—which are frequently manufactured overseas (we’ll get to that later). They also have to pay to store the goods in a warehouse, ship them to the store, and then ship them back if they don’t sell. But in the service industry, the goods and the labor are one in the same. The product your manicurist is selling is her time, knowledge, and skills. That means a larger percentage of each dollar you spend goes directly toward paying her, and less is lost to the fixed costs of doing business…. [more]

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Tags: budgets, economy, luxury, pedicure, spending