(please comment!)
Discuss how well reasoned you find this argument.
Argument:
The market for the luxury-goods industry is on the decline. Recent reports show that a higher unemployment rate, coupled with consumer fears, has decreased the amount of money the average household spends on both essential and nonessential items, but especially on nonessential items. Since luxury goods are, by nature, nonessential, this market will be the first to decrease in the present economic climate, and luxury retailers should refocus their attention to lower-priced markets.
The author claims that the market for luxury-goods industry is on the decline, but the supporting reasoning is not entirely conclusive for the most part – and could be made more compelling.
For example, the author emphasizes that „recent reports“ correlate a higher unemployment rate with decreased amount of money that the average houshold spends, especially on nonessential items. Many business scientists would find that this statement is very irritating, simply because there is no reference to the „recent reports“. It is mandatory for the reader to know, what these recent reports are, because we can otherwise not determine the truthfulness of the statement. It might be a biased news magazine, or it could be a report in a scientific journal. One cannot say for sure, how much of the mentioned report is true without a reference. Would you rely on the authors doubtable argument if a severe business decision, that effects your employees, depends on the future of the luxury-goods industry?
Then, concerning the same paragraph, if we assume that it is valid: the paragraph tells us that the average household will invest less money into luxury goods in the presence of a high unemployment rate and „consumer fears“. Is this the case? Is the unemployment rate significantly higher than previously? Will it necessarily stay that way for a prolongued period? The author assumes that both is true, but unfortunately gives us no evidence to believe him. Maybe in the country he is writing about it is a well-known fact that unemployment rates are higher, but it is very hard to prognose, if the unemployment rate will decline or increase in the future.
Secondly, the average reader wants to know what the author means with „consumer fears“. I have a slight idea of what he could mean, but I could not give a clear definition and it would be very helpful to have definitions of the unclear terms in the authors argument. The way it is now, „consumer fears“ is an undefined parameter, that may or may not be present, and may or may not lead to a decrease of the market for luxury-goods depending on the validity of the „recent reports“, which may or may not be reliable.
Third, if we reluctantly assume that all this is true and if we were to believe that the average household will spend less money on luxury goods, we do not know how much impact this will have. It is reasonable to assume that above average households make up for a very large part of the sales of luxury goods. So if the average households – we do not know how narrow this definition is – are lost to the luxury goods industry, it doesn’t necessarily have such strong repercussions on the industry.
In the last paragraph, the author tries to strengthen his argument by saying that the luxury goods market will be the first to decrease, which is an exeggeration and further reduces his credibility. A weak economy and high unemployment rate will affect many aspects of the market; luxury goods are not the only products whose sales might decrease, other industries are likely to struggle as well. And it is very doubtful, that luxury goods will be the first market to decrease. It’s obvious that this is an attempt to increase the importance of his request.
A more compelling argument could begin something like this:
Canada suffers from an increasing unemployment rate since many years and this has triggered strong consumer fears, which are (…), in the population. According to Jhonson Willford (Bus. Sci. Journal, 1973), both unemployment rate and consumer fears reduce the amount of money the average household (income of 1600 € to 4000 € per year) spends on nonessential items. This includes the market of luxury goods as well, and since average households constitute the major contributor to the luxury goods industry, we have reason to say that the luxury goods market will decline strongly in the upcoming year. …