Service Industry must brace for the next big hit when those making over $250,000 per year, pull back on discretionary spending. The problem lies in that there are much more people making between $250,000 to $500,000 then there are people making more than $500,000.
This group will go out to eat less, and spend less money on discretionary income when taxes increase. In fact, it’s possible that the service industry will soon see a dramatic dip as Americans in that income bracket starts to plan for the worst.
Expect the discretionary money pulled out of recreational activity and instead shifted towards less risky, safe investments, much in the way large corporations have done. No more perks for anyone. This group is likely to sit on their money instead of putting it to work or even worse, spending it on recreational activities.
You might say, so what, why should I care? You probably don’t unless you work in mid to upper scale restaurants or in resorts. Those are the people who give you your big tips, you know, that extra money that you live on.
If you think these people are going to keep dining out, going to resorts and buying luxury toys, you are sadly mistaken. Just look back to see how your life has changed since 2008. Nothing is the same since then and expect it to get even tougher.
Don’t worry though, you can always go on extended unemployment and lose your self-pride, you won’t need it because it’s not necessary to collect from the Government. Is that what you really want?
So, tell me, who’s got who’s back in all of this? If you work in the service industry, you really need to ask yourself, am I ready to go through another life changing event like I did when the economy last took a dive? The country may not see much change overall, but the service sector needs to brace for impact, you’re about to hit hard!