What: The WSJ considers that 2023 might be, relatively speaking, more difficult for the rich than usual in a recession scenario.

Why it is important: For one, the US job market structure is specific and might not be the same in Europe. Second, if the WSJ prediction realises, this could lead to a generalized crunch where rich customers do not spend for fear of the future.

For the WSJ, while economic downturns usually hurt mostly the poor people, the 2023 downturn, if it turns into a recession, might unusually hit the richer harder than usual.

When comparing the evolution of income by social classes, it appears that the lower classes have benefitted more from the governments’ relief policies than the higher ones, meaning that the richest people are not particularly better-off when compared to the beginning of the pandemic (note: this reasoning is valid if one does not consider the money saved during the lockdown periods).

In addition, the recent wave of layoffs in the tech industry includes a significant amount of former employees with a heavy pay check, in a context where, due to the structure of the US market, a recession might not mean a crisis on the job market for the lower classes.

As a consequence, for the reporter, the well-off customers might be more reluctant to spend in 2023, which will naturally impact retailers catering for their needs.

Get ready for the Richcession