Small Luxuries, Big Crises: The Lipstick Effect

We are people who have lived in this world for centuries and have formed countless empires and companies. In the end we have destroyed them too.

The social culture in our countries changed in response to the economy. The part of social culture that changed the most is the middle class, who have time to think, work and have fun. In the late 20th century, the middle class could afford property and cars. But now in our society, people buy lipsticks. By lipstick, I do not mean real lipstick, I mean fashion clothing, coffees in expensive cafes and instant rewards.

The lipstick effect is defined as a recession and silent economic crisis indicator. When people do not have sufficient income to afford properties, they buy small things. With those small things, people become happy easily for a small amount of money. They then buy more of the same thing to achieve the same effect.

Many people believe that this affects the economy positively. However it is good in the short term, as people buy more and companies earn more. The cash flow happens fast. However, in the long term, it leads to dopamine addiction and growing dissatisfaction, which may contribute to psychological disorders among people.

In recent decades, among Gen Z, we can observe this effect, our fathers and grandfathers have bought cars, properties and maybe have started a company. But teenagers are struggling hard to afford those things. Now a property is no longer affordable for many people.

Maybe that is Gen Y’s fault, maybe it’s Gen Z’s fault. It does not really matter. The governments should take concrete steps to halt or slow down this effect.