Cover Image: The Velvet Rope Economy

The Velvet Rope Economy

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Member Reviews

The bad news is that there is a hidden (and not so hidden) Velvet Rope Economy in the United States right now. The author explains that the rich top one-percenters are different. They essentially coast down an EZPass paid express lane through life’s difficulties. Meanwhile, the losers below them struggle with lines at amusement parks and proposed Standing-Room-Only “seats” in coach air travel.

So what’s the good news? According to the author, I’m in the Upper Middle Class, which may explain why I’m thinking of purchasing the $500 an hour VIP tour at Disneyland despite thinking it was a waste of money only twenty years ago. YOLO, am I right? But truly in California, where a million dollar is a starter condo, I feel closer to the bottom than the top earners.

Some of the services available on the other side of the rope are pretty incredible. Access to clinical trials, a hidden park at Seaworld, private firefighters that will save your house but let your neighbor’s burn, and a private Porsche ride to your connecting flight are just a few of the surprising (and probably surprisingly expensive) options.

So how will this increasingly large difference between the rich and everyone else end? Per the man smart enough to invest in Amazon at the beginning, “civil disorder or even revolution.” However, according to the author, there is a simpler solution. Vote with your feet. Resist purchasing the Velvet Rope Economy’s premium options. Use egalitarian Southwest Airlines that has only one seat class. I guess there goes my VIP tour idea. I enjoyed this short class in economics and human behavior. If you are interested in topic, the author keeps it entertaining. He also shows both the pros and cons of premium pricing. 4 stars!

Thanks to Doubleday Books and NetGalley for a copy in exchange for my honest review.
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“The rise of the Velvet Rope Economy marks an end to the great democratization of American life in the post-World War II era.”

What is the Velvet Rope Economy? The Velvet Rope uses class segregation based on your socioeconomic status to help businesses profit. Think of the fast pass systems at theme parks that only certain family groups can afford. Or the better seats at a sporting event. Or even private education. Why are businesses profiting from class segregation? How did we get here?

There are tons of examples for everything this book states. You will be familiar with most of them if you have lived in the U.S. for most of your life. If you have not, this might be a big eye opener. Different treatment, benefits, and price discrimination due to socioeconomic status is proven in airline services, theme parks, sporting events, health care, and education to name a few that are used as examples in this book. “It favors the people who have the money…”

The first part of the book is about the super elite that are “inside” of the Velvet Rope (5%-54% on a Kindle), and the second half is about those “outside” of the Velvet Rope (54%-83% on a Kindle). Exclusivity, social brain hypothesis, soft benefits vs. hard benefits, situational inequality, Pareto optimality, and class segregation are used to support the ideology behind the Velvet Rope Economy.

“…people will be left out of the economic system as more and more information accumulates.”

It only focuses on the present and what that looks like right now. It does explain that we are headed to a caste system but goes no further.
This is a well researched book that is accessible to the average reader.
Thank you to NetGalley and the publisher for an advance copy.
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The Velvet Rope Economy is an eye opener. One thing I learned: based on an algorithm called a Customer Lifetime Value (CLV), a company might not bother to answer your phone call if your projected lifetime profitability is too low. So much for “the customer is always right.”

Schwartz describes how U.S. corporations are chasing all the wealth that has accrued to and (contrary to trickle-down economic theory) has been firmly locked up in the richest 1% of the population. Companies are providing elite services, which are then stratifying into elite and mega-elite, and then mega-mega elite. These services occur on the privileged side of the Velvet Rope, sometimes a literal rope or wall or locked door, and sometimes an invisible barrier, separating the elite who have paid a premium from the rest of us. 

The Velvet Rope divide applies to entertainment, sports (at every level from elementary school to professional), travel, education, and medical care. Stratification begets stratification and keeps the poor from becoming middle class, much less crossing to the other side of the Velvet Rope. 

Services such as public hospitals that used to be the same for everyone and serve as equalizers in society become stigmatized, neglected, and sometimes eliminated, Schwartz points out, as everyone yearns for the elite and rarified world of the wealthy, or, in the case of the wealthy themselves, luxuriate in their pampered bubble and lose touch with the majority of the populace. Schwartz blames both Left and the Right for this—both those who demand special treatment at sky-high prices, and those who provide it.

Companies needn’t worry about the vanishing middle class, once a behemoth of purchasing power. The middle class will either pony up for the elite treatment, or suffer with the herd. While it’s not covered in the book, information is increasingly roped off for the well-heeled as well, who can afford hefty prices for subscriptions--and we wonder why the poor are not more well-informed.

The conclusions of the book are weak, although I enjoyed the examples of more egalitarian business initiatives. Schwartz overlooks the fact that the middle class and poor in the U.S. can’t entirely blame the rich and corporations for this sad state of affairs, since many non-wealthy citizens resist paying taxes for funding public services. Schwartz suggests redistributing wealth and rebuilding  our social infrastructure through fairer tax laws, which I would call unlikely. What side of the Velvet Rope, after all, is Congress on?

I received an advanced readers copy of this book from the publisher and was encouraged to submit a review.
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The recent results from a Gallup Poll (Jan 2018) showed that 36% Americans are dissatisfied with the ability to get ahead by working hard!
This should not be a surprise for anyone working today for peanuts while exhausting themselves daily for 10c raises as Top Producers/Associate of the Months and whatever other title they wiggle in your face to try to achieve.
I know this because like many of you - I went from upper middle- to extreme poverty- now officially 'locked in' to the bottom row.
You might ask how? Well, divorce, bankruptcy, no child support for over a year living on credit to raise a family of four, legal/medical expenses, marital/credit debt, student loan debt (by way that MPA never used to raise 3 kids with son med disabled for life since birth.)
I mention this once again not for sympathy, not empathy, not compassion as I know that's not the norm today but to show that working hard is a farce as it's a tough competition today with not only the college kids but the low salaries, the stagnant wages, the lack of benefits and cutting hours just below F-T (yes I see you employers), and the work to death motto that leaves you with nothing more than higher medical bills.
How should I know as I worked at a factory as top producer in two departments while being video taped by my bosses to show others how it's done. The garbage guy who didn't work off conveyor, allowed to move freely w/o question, never begged for toilet breaks or fresh air circulation from dusty fans overhead made more than me working like a nut.
I was paid exactly $7.25 hr w 10cent raise with $25 one time bonuses for associate of the month awards.
I would add that same job pays the same wages from when I worked as a teen (now 47 next May.)
Is this the 'Make America Great Again' that they all spoke of so beautifully or are we being sold more empty promises and broken dreams (ps. Malignant Narcissist survivor too.)
So, yes, when I say the welfare to work is to force others into employment w/o care or concern for safety or survival - I MEAN IT!
You see while in extreme poverty my son (19 yo now full time college) was taken off SSI/SSP in March just before graduating high school in May and ironically the same day the welfare to work took effect.
Now push forward a few months he then enrolled full time night classes at college (1st yr freshman) and he has his food stamps taken away...and they wonder why colleges now have food banks inside of them?
What the hell is wrong with people?
You see my family and I were left bankrupt and homeless after divorcing an abusive spouse with an active pfa and violation w his arrest and 3 month probation for enrollment into alcohol and drug and anger management courses.
A warrant was issued for his failure to pay and appear for court and child support w 15 k arrears.
I had given up career to raise med disabled son w vater syndrome for 19 yrs.
I have looked for a job since 2010 (separation) and 2013 (divorce) w 3 interviews this after attending job fairs, networking, referrals, cold calls, begging, placing resumes online after updating at undergrad colleges, with linkedin business accounts, etc...
I was just passed up with my 20 yrs volunteering experience and Points of Light Award for a college girl who was basically on the yearbook staff as a content writer even though I currently work unpaid as a national trade blogger with over 9 major publications producing over 1k reviews yearly at Goodreads/NetGalley and having won every award for high reviews and stats.
So folks, please do continue with the hard work pays nonsense but it's not what you do it's who you know, how much money you possess, and what your age, race, and other factors like class and credit are in today's world.
You see those w/o credit can't get jobs, nor housing, nor will landlords rent to those w kids or past abuse histories. This is fact!
You might also not be aware that shelters won't take in women and kids nope just women and they must not be in the facility during the day but seeking work.
EBT is not a handout but handup and I know this all too well as I continue to dispose of the myths and misconceptions having had my food insecurities told to every member of Congress in Community Voices.
So sure, when those who've been fed the lies approach me I want to rip their heads off because the stories about welfare recipients and the abuse of the system or the character judgement is so off center and made to be a 'catch all or nothing' response.
The facts are when you have welfare providing more income than minimum wage employment than you have yourself a huge problem! In Pennsylvania, it's $6.53 more income!
Now, if you have to support a family and you can't get paid a 'living wage' to raise a family wouldn't you make the same choice others are now being forced to make? 
Would you think this is milking or survival? You tell me.
What if you needed benefits because your family member was disabled or suffered other lifelong illnesses or ailments? What if I told you employers deliberately pay under 40 hrs to not provide benefits. Would you think less of others for seeking benefits to survive? Or in my case with spinal stenosis causing leg paralysis, raynaud's phenomenon, severe anemia w dyspnea, vater syndrome, and much, much, more.
This is reality folks and though the 'GET A JOB' comments are enduring they are not reality for many especially those my age or older who can't get hired from age discrimination.
If you think it doesn't exists I ask why would a company wish to hire a LT unemployed homemaker whose overqualified and lacks prior work experience with a family of 4 to support on benefits and flex schedules when they can easily go to greener pastures with a college student that is young and not often seeking such accolades to survive but rather need to get foot in door to start the dreaded loan process or deferment.
In fact, you cannot write off those student loans in bankruptcy so good luck with all that debt.
The author illustrates a point when he notes, 82% said income inequality is a major problem according to his research from Pew Research Center - Oct 2017.
In essence, the middle class is being hollowed out every day as we enter a feudal system for the top 1% rather than a sustainable working class capitalist system.
If you want the truth I provide this video from my former boss; President of Al Beech, a local food bank for which I volunteered. Here she puts on full display the myths and misconceptions she herself had which resembled what many now believe and how wrong she was in her own professional words.

For more information about poverty, EBT, food insecurities and more please visit my profile or check out these links and then tell me hard work pays: -- PG 38 to see my story told by Rose DeLauro (D-Conn)

Blogs on the topics of LT Unemployment and Extreme Poverty:
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I was expecting a book mildly relevant to my middle-class life, but this is about the experience of all of us. Schwartz opens with cruise ship passengers pressed up against each other waiting for a buffet, as more elite classes relax nearby.... then pans out to elite stadium seating, tiers of ever-more elite frequent flier lounges, concierge access to good doctors, schools that depend on parent fundraising for music and art, and a thousand other ways our lives are segregated by ability to pay. His journalistic style is engaging and relatable, and he describes social change in small towns and big cities I know well, from heartland to the coasts. I was pleased that it stays broad enough in appeal that I could suggest to friends across political and demographic divides. 
The concise ending suggests ways for business, citizens, and city leaders to come together in creating better experiences for everyone. Highly recommend.
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Thank you to NetGalley and Doubleday Books for advance copy of this book in exchange for my honest review.  I'd thought I'd start a non-fiction book so I wasn't up too late.  This ended up keeping me up!  It reads smoothly, transitioning and segueing into different areas without effort.  I won't say this book didn't trouble me...a lot.  Just this morning we were discussing how Disney has now fallen into this and they are offering "VIP" seating for the parades, "plaid" shirt treatment for a price, etc.  The book delves into how this came about and how it creeps into areas we wouldn't expect, such as medical care.  I'll be thinking about this book for some time to come.  Highly recommended.
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