Rich and Poor Multipliers Again
Earlier I asked about the multipliers for the consumption of rich and poor people. Let me be a little bit and more explicit. I would assume that rich people spend a lot more on personal services and expensive goods.
Expensive goods tend to have much higher markups. Remember Henry Ford II responding to the influx of Volkswagens observing that mini cars mean mini profits. Expensive branded goods have very high markups, meaning relatively few jobs per dollar of expenditure compared to the spending of the less affluent. Personal services are probably bimodal. Some professional work would probably mean relatively few jobs per dollar of expenditure; some less prestigious work might mean quite a few jobs per dollar of expenditure; for example, underpaid immigrant nannies. Any thoughts?