With an economy bigger than that of France, a population of 39 million, and 4.2 million more votes for Hillary Clinton than Donald Trump, California is setting itself up to be America’s leading liberal bastion against the incoming president.
And the state just put its money where its mouth is by hiring a serious heavyweight to fight its legal battles against the federal government: Eric Holder, who spent six years as president Barack Obama’s attorney general.
In a very unusual move, the state’s senate and assembly teamed up to retain Holder, who will head a team from DC firm Covington & Burling, rather than the usual practice of its attorney general taking the lead on legal disputes with the federal government.
The decision signals that the California’s Democratic leaders expect unprecedented levels of conflict with Washington over the next four years—stemming both from a desire to protect already existing liberal values and policies, as well as taking the progressive fight to Trump on new issues.
California Assembly speaker Anthony Rendon has taken an exceptionally combative stance against the president-elect. In a speech last month, he talked of setting up a legislative “firewall” to protect his state from Trump’s agenda, insisting, to a standing ovation, that Californians “need to fight” the president-elect.
.@Rendon63rd calls Trump’s cabinet: “Bullies, billionaires and bigots."
— Liam Dillon (@dillonliam) December 5, 2016
Governor Jerry Brown has already promised that California, a global environmental leader, will combat Trump’s climate denialist cabinet by taking on the role of negotiating with other countries on climate change. The state could also provide leadership for Democrats in states and cities around the country on issues like policing, civil rights, labor standards and social safety nets.
Americans seem to be increasingly concerned about their relationships with alcohol. Over the last year or so, I have come across several articles in which (mostly women) expressed some very strong feelings about alcohol and why it is better not to drink. The implication seems to be that unhappy, privileged types are using alcohol (especially wine) as a crutch, rather than facing up to the causes of their dissatisfaction. The issue weighs heavily over people during the holiday season, a time when liquor flows freely.And now that we are in January, the internet is awash in a whole new crop of stories on Dryanuary, a somewhat controversial tradition in which people give up alcohol for the month.
As a German who spent her childhood on a family-owned winery and has lived around convivial wine drinking all her life, I tend to be less wary of alcohol. But years spent traveling between America and Europe have also made me think critically about the differences between cultures that teach people to enjoy drinking responsibly, and those that lead to alcoholic excess.
I was born into a family of winemakers in Germany. While rewarding, it’s a stressful life with lots of hard work. Vintners are utterly dependent upon the weather. People come and go every day to the tasting room to sample wine and learn how to savor it.
The German concept of wine is different from that of Americans. We are not naïve; we have developed very firm values and rules about drinking that emphasize moderation and community drinking from an early age. Thousands of years of vineyard planting, wine crafting, and wine drinking has left a deep impression on our culture. Even our history books pay homage to it: I love the fact that Benedictine nuns were the first to cultivate vineyards along the river Main in Franconia, where I come from.
I stepped out of this world when I moved to Birmingham, Alabama, for a teaching job. In Birmingham, I experienced my first “dry campus.” I had never heard of such a thing before. I instantly wanted to smuggle in some wine. I learned about for the first time American temperance movement, the Second Great Awakening, and Prohibition in the 1920s.
Gradually, I began to realize that America’s complicated and sometimes unhealthy relationship with alcohol was rooted in its past. The US has not yet developed a healthy relationship with alcohol on a large social scale. While some people reject alcohol altogether, others drink almost exclusively strong liquors. Especially where I was in Alabama, the secrecy of those moonshine days somehow still lingers.
Wine in particular had a tough time taking root in American society—literally. When the English Puritans, the French Huguenots, and the German Pietists first arrived on the eastern shores of America, they brought over their beer and wine on ships and eagerly tried to plant vines. Sadly, the European vines couldn’t flourish in this climate. Instead, distilled spirits and other beverages like hard cider became the alcoholic beverages of choice.
However, as distilled spirits became increasingly popular, so did the backlash against them. This is where many Americans developed an unhealthy relationship with alcohol—the consequences of which no one could foresee. The abuse of strong liquor became a major challenge to American society, spawning the temperance movement in the 1830s and 1840s.
When the 18th Amendment banning alcohol sales or manufacturing in the US went into effect on January 17, 1920, a whole nation became unable to cultivate any open or healthy relationship with alcohol. The consequences of the Prohibition era would last far longer than the actual law, which was repealed at the federal level in 1933.
America’s unusually high minimum drinking age of 21 has arguably made matters worse. Many young people in America still learn how to drink in college with their peers. This is a bad idea.
In contrast, the legal drinking age in Germany for wine and beer (but not distilled spirits) is 16. (Children are also allowed to drink beer and wine at the age of 14 with parental supervision.) At age 18, young adults can drink distilled spirits. This staggered approach signals the fact that distilled alcohol require more maturity in order to be appreciated responsibly.
I had my first glass of wine at the age of 14 at my confirmation into the Lutheran faith. As is my family’s tradition, I was allowed one small glass of Silvaner—a fresh, crisp and savory white wine—with dinner. I sipped it very slowly as my friends and family watched. In that moment, I felt incredibly grownup and important. It was a day of feasting and celebration and wine.
My experience was not unique. In Europe, drinking wine is woven naturally into everyday and public life.In many families, it is typical to share a bottle of wine around the dinner table over the course of an evening. The children get to watch their parents as they enjoy wine responsibly and in a setting that nurtures communal life.
In the summer months, we often go to nearby wine festivals and indulge in local cuisine and wine whilst listening tomusic. In the winter, we stop with our colleagues after work at our local Christmas market and sip a glass of mulled wine before heading home. I am not saying that Europeans don’t abuse alcohol, just like plenty of American families drink responsibly. But there seem to be more opportunities to practice a more wholesome and communal enjoyment of wine, as opposed to bingeing and excessive drinking just do get drunk that I have read so much about int he American press (and experienced firsthand while living in the US).
I understand and validate the experiences of those who worry about attitudes toward alcohol in the US. But to me, these experiences seem far away from my own knowledge of wine or beer consumed slowly around the dinner table—a place of communion, vulnerability, and healing.
In my experience, the more people grow up in a society where drinking is associated with cultural ceremonies and family, the less likely it is that the members of that society will abuse alcohol. In the US, the problem is that too many people are turning to alcohol in an attempt to cure themselves of feelings of loneliness and isolation. This very different relationship with alcohol develops early in life and can have devastating consequences. It takes a village to learn how to drink and enjoy a glass of wine responsibly.
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Nielsen’s latest US ranking of the most popular smartphone apps is out, and it’s not a pretty picture for those who value diversity in their digital lives. A third of the Top 10 apps belong to Facebook; half are Google’s, and Apple and Amazon pick up the remaining scraps with one apiece.
But what’s most interesting about this year’s ranking is what came in second. Facebook’s mobile app has long occupied the top slot, but the social network has now underlined its dominance with the Facebook Messenger ascension to No. 2.
Of course, it’s easier to dominate when you force your existing users onto a new app. Facebook in August started to warn its users to install Messenger or lose access to the messaging feature. And while it’s still possible to access Facebook messages without the Messenger app—they’re accessible from your phone’s browser—Facebook discourages it, suggesting the app provides a better experience for users. Five years ago, Facebook Messenger hadn’t even cracked the Top 10 app, trailing the likes of Twitter and The Weather Channel. Now it’s bigger than YouTube and Gmail.
Facebook’s apps dominate in another way too: People spend tons of time using them. Data from analytics firm Comscore estimates that Americans aged 18 to 34 spend more than 1,000 minutes a month (16 hours and 36 minutes) on the Facebook app, compared to under 400 minutes on Snapchat, and about 100 minutes on Twitter. The picture is similar for those aged 35 and above, except they spend less time overall on social media apps.
From Comscore’s “2016 U.S. Cross-Platform Future in Focus” report.
Six years after it’s launch, Facebook Messenger ranks as high as it ever will—the messaging upstart can hardly supplant its fuller-featured parent app. Facebook must now look to Instagram, its third app on the Top 10, for future growth.
The photo-sharing site has languished in the bottom half of the chart for the past three years, but there are promising signs: For 2016, its year-on-year growth rate was higher than Messenger’s for the first time in years, rising 36% over the previous year, while Messenger rose 28%.
On a frigid Saturday, pink and yellow Post-It notes scrawled with concerns about cybersecurity covered a wall of Eyebeam, a nonprofit art and technology center in Brooklyn. “Identity theft + surveillance = paranoia, plz help,” read one note. “How much of a threat do alt-right hackers pose on social media?” read another. “If you know your device has previously been accessed by NYPD, what can you do?”
Fifty people had gathered at Eyebeam with their laptops and cellphones for a CryptoParty—basically a Tupperware party for learning encryption and web security. Founded in 2012 by Melbourne-based journalist Asher Wolf in response to increased internet surveillance in Australia, CryptoParty is a decentralized grassroots movement that offers free DIY workshops all over the world. If you’re concerned about online privacy (which everyone on the internet probably should be) but don’t know where to start, “Crypto Angels”—as the cybersecurity experts who volunteer at CryptoParties are called—will teach you how to use encryption tools to protect your information from government surveillance, cybercriminals, data-mining corporations, and other threats.
Since the keys to the US surveillance state were handed over to a reality TV star who has spoken favorably about surveilling mosques and cracking down on free speech, interest in cybersecurity has surged, leading more people to seek out CryptoParties. Concerns are particularly high among groups who have been targeted in the past—including activists, journalists, people of color, immigrants, Muslims, and the LGBTQ community—but no one is immune to security breaches. CryptoParty-goers in Brooklyn that night included an immigration lawyer who wanted to help her clients avoid being digitally monitored, a tech-support consultant for leftist nonprofits, and a Justice for Palestine activist concerned about being surveilled during protests in the Donald Trump era.
Adopting concrete cybersecurity habits is more involved than ticking off a quick checklist—install this app on your phone, install this plugin on your laptop, and boom, your information is encrypted!—and even for the tech-savvy, encryption is complicated and time-consuming with no one-size-fits-all solution. While it’s impossible to be completely safe online, you can always be safer. Here are 10 basic encryption lessons, courtesy of CryptoParty.
1. Consider using more secure alternatives than Google Docs. “If you value anonymity and privacy from corporations or the government, you might not want to host all your work on Google’s infrastructure,” said Jamila Khan of Palante Technology Cooperative, who’s researching alternatives to Google Docs for progressive nonprofit clients. “When you use Google products, you’re not the customer—you are the product.” Google watches everything you do using their services, keeps all your data, and monetizes it through advertising. As for secure, private alternatives, Khan suggests word-processing platforms like Cryptpad or Riseup Pad; the latter is an Etherpad web service hosted by the activist network Riseup. These platforms offer real-time collaborative editing, but unlike Google Docs, they don’t collect your data. Riseup Pads are also automatically destroyed after 30 days of inactivity.
2. Don’t leave a digital breadcrumb trail. If you want to keep a piece of information private, don’t put it online unless you have to. This one seems like a no-brainer, but plenty of people are cavalier about the stuff they text, email, write in Google Docs, and record digitally. The receiver of any communication you send can distribute those communications however they please. “People need to ask, ‘Should I be texting this or emailing it at all?’” said activist and poet Candace Williams, who led one of the CryptoParty workshops, and whose 70-Day Web Security Plan for Artists and Activists is a valuable resource.
3. Download a more secure messaging system. Boost your email security by using encryption programs like GPG or PGP (“Pretty Good Privacy”). Try out encrypted email and text messaging platforms, especially ones tailored to activists. The most popular encrypted messaging app is Signal, which Hillary Clinton’s US presidential campaign used after repeated data breaches. (Downloads spiked post-US election.) Webmail providers like May First/People Link, Riseup Mail, and ProtonMail, offer secure email and communication tools, some specifically designed for activists.
4. Surf the web safely. For anonymous web browsing, download Tor. Use a search engine that doesn’t track you, like DuckDuckGo. The Tor browser protects your anonymity by bouncing your communications around a distributed network of Tor servers around the world, and encrypting that traffic so that it can’t be traced back to your computer.
5. If you go to a protest, leave your phone at home. “When it comes to securing your phone at a protest, the threat model is tricky,” says activist Rose Regina, who taught a workshop on threat modeling at the CryptoParty. Depending on the nature of the protest, demonstrators’ phones might be surveilled by local police with stingray tracking devices, or even the FBI; as the Intercept first reported, US federal agencies have regularly monitored the Black Lives Matter protest movement since Ferguson, even watching over events like a funk music parade. “If it’s a low-key climate march, you might not need to take extra steps,” Regina says. “But if you’re going to do a hardlock in front of construction equipment building a pipeline, the likelihood is pretty much 100% that you’ll get arrested and your phone will be taken.” In that case, think about leaving your phone at home. If you can’t bear to part with it, use Signal to communicate while at the protest, making sure your phone has a screen lock that’s protected with a passcode. You should also disable fingerprint activation, which the police can ask you to use if they have a search warrant for your phone, and perhaps craft a signal-blocking cell phone pouch like the ones protesters used at the Republican National Convention.
6. Get serious about your passwords. Enable two-factor authentication on all online accounts. Change your passwords every few months—and make sure they’re strong, which means random and unique. As goes the tech-nerd motto, “The only secure password is one you can’t remember.” Store your passwords using tools like 1Password, Dashlane, or LastPass, which will both securely store your passwords and generate random new ones for you.
7. Think about how you present yourself on social media. The information you’re providing about yourself on social media profiles could become a liability. In the event of a crackdown on free speech, your posts on Facebook, Twitter, Instagram, and YouTube could become a form of self-incrimination, even if you haven’t committed a crime. In mid-November, for example, after a Rutgers University lecturer tweeted about flag-burning and other “incendiary” topics, the New York Police Department showed up at his door and forced him to undergo a psychiatric evaluation. The NYPD’s persistent monitoring and targeting of people of color on social media platforms has been called the new stop-and-frisk, which warrants caution about even jokingly posting online about criminal activity.
8. Know your threat models. In cybersecurity land, “threat modeling” is the process of systematically analyzing the vulnerabilities of a given network or individual and identifying what measures should be taken to protect against probable threats. Whether you’re devising a threat model for securing your phone at a protest, your laptop when you don’t trust your roommate, or your online banking, ask yourself who you’re protecting yourself from, and how many layers of security you need.
9. Adopt encryption measures even if you don’t think you’re a likely target. Some people still assume that if they’re a law-abiding citizen, they have nothing to hide and therefore don’t need encryption. But history suggests that’s naive. (See: Snowden’s warning about the NSA collecting your dick pics.) “A dream is to make being safe on the internet as automatic and normal as buckling your seatbelt in a car,” Candace Williams said. “The more people adopt privacy practices, the safer everyone is. It’s partly a future-proofing strategy.”
10. Don’t get paranoid, if you can help it. “Power, not paranoia,” goes one CryptoParty catchphrase. While countless books and how-to articles teach DIY encryption, attending a CryptoParty has the added benefit of connecting you to real live humans with similar concerns, which can allay paranoia. “If you Google how to protect yourself online, it can be like looking up symptoms on WebMD—you’re going to get nightmare scenarios,” Williams says. Alternatively, attending a CryptoParty is like visiting a doctor who offers individualized advice—and tells you not to freak out.
The beauty of the CryptoParty movement isn’t just the way it makes encryption more accessible: It also helps build activist communities and networks of resistance, encouraging average citizens to take their civil liberties into their own hands when they can’t trust people in power to protect those liberties for them.
For a list of dates and locations of upcoming CryptoParties around the world, head here.
You can follow Carey on Twitter at @careydunne. Learn how to write for Quartz Ideas. We welcome your comments at email@example.com.
Many of us will start out the New Year by making a list of resolutions—changes we want to make to be happier, such as eating better, volunteering more often, being a more attentive spouse, and so on. But, as we know, we will often fail. After a few failures we will typically give up and go back to our old habits.
Why is it so hard to stick to resolutions that require us to make effective or lasting changes?
I would argue the problem isn’t that we try and we fail; the problem is how we treat ourselves when we fail. I study self-compassion, and my research and that of others show that how we relate to personal failure —with kindness or harsh self-judgment—is incredibly important for building resilience.
From early childhood, we are taught how we must succeed at all costs. What most of us aren’t taught is how to fail successfully so we can change and grow.
One of the best ways to deal with failure is to have self-compassion.
What exactly is self-compassion?
I define self-compassion as having three main components: self-kindness, common humanity, and mindfulness. Self-kindness refers to the tendency to be caring, understanding, and supportive toward ourselves when we fail or make mistakes rather than being harshly critical or judgmental.
Common humanity involves recognizing that all humans are imperfect, and connecting our own flawed condition to the shared human condition so we can have greater perspective on our shortcomings.
Mindfulness involves being aware of the pain associated with failure in a clear and balanced manner so that we neither ignore nor obsess about our faults. The three together combine to create a self-compassionate frame of mind.
A large body of research shows that self-compassion results in greater emotional wellbeing. One of the most consistent findings in this research is that greater self-compassion is linked to less depression, anxiety and stress.
In addition to reducing such negative mind states, self-compassion appears to enhance positive mind states such as optimism, gratitude, and curiosity. By meeting one’s suffering with the warm embrace of self-compassion, positive feelings such as happiness are generated at the same time that negative emotions are alleviated.
Self-compassion has been found to be an important source of coping and resilience in the face of various life stressors such as divorce, chronic health conditions, or military combat. It also reduces body dissatisfaction and even leads to healthier eating behavior (relevant to many New Year’s resolutions!)
Misgivings about self-compassion
If self-compassion is so good for us, why aren’t we kinder to ourselves?
Perhaps the biggest block to self-compassion is the belief that it will undermine our motivation. In parenting circles we no longer hold to the adage “spare the rod spoil the child.” When it comes to our own selves, however, many of us think that sparing the rod of harsh self-criticism will turn us into lazy, self-indulgent ne’er-do-wells. This theme constantly comes up in the workshops I teach.
Of course, the dynamics that go into motivating our children and motivating ourselves are quite similar. Let’s say your teenage son were to come home with a failing English grade. You have two ways to motivate him to try harder and do better next time.
You could admonish him and tell him how stupid he is and that you are ashamed of him. The other is, knowing how upset he is, you could give him a hug and gently ask him how you could support him in doing better next time. This type of caring, encouraging response would help your son maintain his self-confidence and feel emotionally supported. The same goes for how we respond to ourselves when we fail.
How does self-compassion increase motivation?
A growing body of research indicates that self-compassion is linked to greater motivation. Self-compassion has been associated with increased personal initiative –– the desire to reach one’s full potential.
Self-compassionate people are also more likely to adopt “mastery goals,” which focus on learning and mastering material to increase competence, and less likely to adopt “performance goals,” which are primarily concerned with succeeding to make a favorable impression on others.
While self-compassionate people have performance standards that are as high as those who are harshly self-critical, they don’t get as upset when they don’t reach their goals. As a result, self-compassionate people have less performance anxiety and engage in fewer self-defeating behaviors such as procrastination.
Not only are self-compassionate people less likely to fear failure, when they do fail they’re more likely to pick themselves up and try again.
A series of experiments by psychologists Juliana Breines and Serena Chen from the University of California at Berkeley examined whether helping undergraduate students to be more self-compassionate would impact their motivation to change.
In one study, participants were asked to recall a recent action they felt guilty about – cheating on an exam, lying to a romantic partner, saying something harmful, etc. –– something that still made them feel bad when they thought about it.
Next, they were randomly assigned to one of three conditions. In the self-compassion condition, participants were instructed to write to themselves for three minutes from the perspective of a compassionate and understanding friend.
The second condition had people write about all their positive qualities, and the third about a hobby they enjoyed. These two control conditions helped to differentiate self-compassion from positive self-talk and positive mood in general.
The researchers found that participants who were helped to be self-compassionate about their recent transgressions reported being more motivated to apologize for the harm done and more committed to not repeating the behavior than those in the control conditions.
Sustaining motivation through kindness
Another study in this same series of experiments explored whether self-compassion would directly translate into greater efforts to learn after failure. Students were given a difficult vocabulary test they all did poorly on.
One group of students were given an instruction to be self-compassionate about their failure. The instruction said,
“If you had difficulty with the test you just took, you’re not alone. It’s common for students to have difficulty with tests like this. If you feel bad about how you did, try not to be too hard on yourself.”
Another group was given a self-esteem boost, which said,
“If you had difficulty with the test you just took, try not to feel bad about yourself — you must be intelligent if you got into Berkeley!”
A third group of participants were given no additional instructions.
The students were next told that they would receive a second vocabulary test, and were given a list of words and definitions they could study for as long as they wanted before taking it. Study time was used as a measure of improvement motivation.
The students who were told to be self-compassionate after failing the first test spent more time studying than those in the other two conditions. Study time was linked to how well participants actually performed on the test. These findings suggest that being kind to yourself when you fail or make mistakes gives you the emotional support needed to try your best, and to keep trying even when discouraged.
Kindness is the engine that drives us to keep trying even after we fall flat on our face. So this New Year, when you make and inevitably break your resolutions, instead of beating yourself up and then giving up, try being kind to yourself. In the long run you’ll be more likely to succeed.
This article was originally published on The Conversation. Read the original article.
For today’s workforce, the temptation to jump quickly from one role to the next has significant appeal, whether it’s the instant gratification of a signing bonus, a title change, or a longer-term salary bump. However, candidates that frequently job hop are becoming less appealing to employers.
Job-hopping is widely accepted in today’s US job landscape—some experts even encourage it. According to a recent report from Gallup, 21% of US millennials say they’ve changed jobs within the past year, which is more than triple the workforce as a whole. But its advantages could be short-lived.
Companies are becoming increasingly aware of the negative impact that employee turnover has on their business: Finding replacement talent is not only a burden on companies, but recruiting requires a heavy lift in time and resources, which also ends up becoming very costly over time. Gallup estimates that millennial turnover alone costs the US economy .5 billion annually.
Sticking in a job isn’t just good for the bosses though: It could also be better for your career. According to Hired’s recent data, we’ve found that software engineers who stay more than two years at a company are in higher demand and receive higher salary offers than those who don’t. In fact, the typical long-tenured software engineer receives 88% more requests for interviews, 65% more job offers, and 11% more in salary compared to someone who has been at their job less than two years. Organizations are also less likely to invest in the recruiting, onboarding, and training costs for a candidate with a track record of job-hopping.
The takeaway for companies
It’s important for candidates to understand the impact chronic job-hopping could have on their careers, but what can employers do to retain teams and avoid attrition?
At their core, most job hoppers are looking for new opportunities to gain different experiences and develop new skills, not just score a higher salary. Companies are beginning to recognize this and some have developed new programs that offer continued learning opportunities.
For instance, Hootsuite offers rotational programs that provide employees the opportunity to try new roles within the company. Google has a similar program, in addition to an employee-to-employee education curriculum designed to further promote a culture of learning. These types of initiatives provide a way for top talent to expand their skillsets and escape the monotony of their day-to-day roles without having to leave the company. Research shows that employees who have opportunities for professional development are better engaged and more likely to stay with their company longer.
Companies could also refocus their employee retention efforts on projects that have a long-term impact. Connecting individual goals to the company’s mission can give employees a sense of fulfillment and meaning. Additionally, material “perks”—like ping pong tables, free meals, or even corporate jets—are flashy, but they don’t necessarily attract the right talent or contribute to retention. Instead, companies should implement benefits and management styles that will enhance the quality of life for their employees, such as remote-work policies, project-based work built for flexible hours, and professional development.
A recent survey asked professionals how much longer they saw themselves at their current company. While only 37% of professionals saw themselves staying at their jobs for three years or longer, what differentiated these long-term staff members from the rest of the pack was that they identified themselves as “purpose-oriented.” This suggests that companies should give their employees a sense of purpose in order to keep them happy.
While the days of 9-to-5 jobs, lifetime-employer pensions, and 40-year tenures are probably over, switching jobs year after year may not ultimately be the best way to grow your career. A new adventure or a small salary increase may seem appealing in the short-term, but employees should stop to consider what they can gain from their current company (and the impact chronic job-hopping can have on their future career options). Likewise, companies need to stress purpose, professional development, and meaningful perks in order to attract and retain a loyal workforce.
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Last year a bad one for many companies selling expensive fashion, handbags, and jewelry. For the first time since the financial crisis of 2008, the global market for personal luxury goods failed to grow, stalling at €249 billion (about 8 billion).
The good news is that 2017 should see a return to growth, according to a Dec. 28 report on the global luxury market by management consulting firm Bain & Company, only it won’t look anything like the boom years from 2010 to 2015, when global sales of such goods jumped 45%, fueled by Chinese consumers with high-end appetites. The slowing of China’s economy and its government’s ongoing crackdown on corruption, paired with turmoil in the US and Europe from Brexit, terrorism, and the US presidential election, have created a “new normal” of low single-digit growth and intense competition. The years ahead will produce “clear winners and losers,” Bain says, determined by which brands can read the field and respond best.
China is at the center of this shift. Today Chinese shoppers account for 30% of all sales of personal luxury goods. While Bain foresees the Chinese market improving again after contracting slightly in 2016, it isn’t likely to return to its former rate of expansion, which insulated brands’ bottom lines from other problems. “We expect around 30 million new customers in the next five years coming from the Chinese middle class,” Claudia D’Arpizio, a Bain partner and lead luxury analyst, told Quartz in an interview last year. “But this is nothing comparable to the past big waves of demographics entering [the market]. This new normality will mean mainly trying to grow organically in the same consumer base, being more innovative with product, more innovative with communication.”
Exane BNP Paribas echoed the thought in a December research note to clients. “The peak of the largest nationality wave ever to benefit luxury goods is behind us,” the authors wrote. “Brands need a new paradigm, other than opening more stores in China and bumping up prices.”
The period luxury is entering could see some of its slowest growth since it started opening up to a mass audience around 1994. That was the year, D’Arpizio noted, that “the jeweler of kings and queens,” Cartier, launched its first lower-priced line for mainstream consumers. Other brands followed in search of greater sales, and names “like Gucci, Prada, also Bulgari were really growing, doubling size every year, sometimes triple-digit growth rates, opening up to 60 stores every year and covering all the capitals across the globe,” she said.
Around 2001 came another period of expansion when brands became global retailers, not just selling wholesale, amid a spate of acquisitions that would eventually create today’s giant luxury conglomerates, including LVMH and Kering (previously Gucci Group). By the time of the financial crisis, luxury had conquered much of the US, Europe, and Japan, and then China came along to offer more unfettered growth.
There’s no new China, however, at least not now. The next big luxury market is likely Africa, particularly countries such as Congo, Angola, and South Africa. But D’Arpizio estimated this scenario won’t come about for seven to 10 years, meaning only moderate expansion for some time.
“In the new normal, we expect a compound annual growth rate (CAGR) of 3% to 4% for the luxury goods market through 2020, to approximately €280 billion,” Bain’s report says. “That is significantly slower than the rapid expansion from the mid-1990s to the late 2000s.”
Other characteristics of this new period include more shoppers making purchases at home. Last year, local purchases exceeded tourist purchases by five percentage points, the first time since 2001 that has happened.
And digital sales will keep growing. Last year they accounted for 8% of the industry.
On Jan. 1 North Korean leader Kim Jong-un revealed in his annual New Year’s address that the country had reached the final stages to prepare for a test launch of an intercontinental ballistic missile. As news of the speech spread overseas, US president-elect Donald Trump weighed in on Twitter, his preferred mode of communication.
North Korea just stated that it is in the final stages of developing a nuclear weapon capable of reaching parts of the U.S. It won't happen!
— Donald J. Trump (@realDonaldTrump) January 2, 2017
China has been taking out massive amounts of money & wealth from the U.S. in totally one-sided trade, but won't help with North Korea. Nice!
— Donald J. Trump (@realDonaldTrump) January 2, 2017
In slamming China, Trump is not straying too far from the Obama administration’s assumption that Beijing is the key to managing North Korea. That assumption merits a closer look.
China has dragged its feet when it comes to helping curb North Korea’s nuclear ambitions, by weakly implementing the sanctions it has agreed to impose on the country. If Trump’s hostile rhetoric toward China gets turned into policy, Beijing will be even less likely to help the US denuclearize North Korea—especially since keeping the status quo in North Korea in many ways aligns with China’s interests.
A collapsed or unstable North Korean regime could be preceded by political and economic chaos in the country, leading to an influx of hundreds of thousands of refugees into northern China. Many of these escaped citizens would not speak Chinese, and thanks to living in a backward economy for decades, they’d possess few employable skills. Unless the Chinese government granted them a special status, they’d likely fall into a life of crime or marginalization. Up to 90% of female North Korean refugees in China are victims of some form of human trafficking.
Meanwhile, a fallen North Korea poses the risk that the South Korea military might move into the country, and, if it traverses further north, place troops along China’s borders. The possibility of conflict perpetually looms over the region, given ongoing tensions in the East China Sea and South China Sea (including the Taiwan Strait). Since South Korea is a democratic ally of the US, a unified or unstable North Korea poses the threat that a geopolitical adversary could more easily advance its forces toward China.
As a result, China has addressed North Korea’s nuclear aggression grudgingly at best, given its economic influence in the country. The government “will only tolerate and support sanctions to the extent they do not undermine stability in North Korea,” says Bonnie Glaser, senior advisor for Asia at the Center for Strategic and International Studies.
The Obama administration has relied on China to help manage North Korea by rallying for economic sanctions. Most of the consumer goods and raw materials brought into North Korea come from China, which accounts for 70% (pdf, p. 8) of the nation’s total trade volume. That makes China’s participation essential to the success of a sanctions-centric North Korea strategy.
But China has remained the most vocal opponent of aggressive sanctions. The UN imposed two rounds of sanctions against North Korea during the Obama administration, the first in 2009 and the second in 2013. Analysts say these actions were too weak to be effective, due to pushback in the UN from China.
In March 2016, three months after North Korea claimed to test a hydrogen bomb, China cooperated with stricter sanctions—most notably, regulations calling for the restriction North Korean exports of coal to China. But the Chinese softened the sanctions’ potential impact by taking advantage a “livelihood purposes” clause. The clause was intended to allow trade of goods that could be proven to benefit the livelihood of the North Korean people. Yet China found ways to use it as a loophole and continue its coal imports, Glaser explains, which rattled the US state department.
Antony Blinken, the US deputy secretary of state, said in November 2016:
“The plain language of [the regulation] makes it very clear that the export of coal, or the importation of coal if you are China, is prohibited unless you can demonstrate that the transaction in question goes to the livelihood of the North Korean people… The Chinese have reversed the presumption and their approach has been that the trade in coal is allowed unless you can demonstrate that it is going to the weapons program.”
Meanwhile, others argue that despite its economic power over North Korea, China’s ability to influence Pyongyang politically is weaker than the US and UN might assume. John Delury, associate professor of Chinese Studies at Yonsei University, notes that in Kim’s annual New Year’s speech, the leader didn’t mention China once—a sign of his ambivalence toward the giant neighbor.
“Koreans historically have seen the Chinese as this big threatening huge power that they need to have a good relationship with, but also need to keep at bay,” he says. “The Chinese don’t act in North Korea’s interest, they act in China’s interest, and [the North Koreans] feel that they could easily feel betrayed by them.”
If pushing China to impose sanctions on North Korea is a dead end, what options does Trump have? The US and the UN could resume diplomatic talks with Pyongyang, after they officially came to a halt in 2009. But those discussions may be no more successful now than they were in the past.