The world-wide demand for many luxury goods has fallen off dramatically over the last six months. And often our populist instincts can lead us not to feel much sorrow for the rich. After all, do they really need more diamonds? Or another yacht?
But when the rich start buying less, employment in luxury-good industries suffers--and often it is the poor and working-class who suffer most. Consider the recent downturn in the global demand for diamonds. Luxury jeweler Tiffany, for example, reported that its same-store sales for the holiday season were off by 24 percent, compared to one year ago. But even more serious fallout is happening in Botswana, where four diamond mines have been shut down as a result of the drop in global demand. Two of the mines may reopen in April, but right now thousands of African workers have been laid off, and 580 jobs will be cut permanently at the two mines that will remain closed until at least 2010.
And things are not much better here in Holland, Michigan, where Tiara Yachts has announced that it is laying off three-fourths of its 400 employees. This announcement follows permanent cuts last year of 300 jobs at Tiara. Julia Bauer, a good friend of mine from church, filed this report.