>This is, arguably, preferable to the 1% investing it in the stock market.

Arguably is the right word.

The global economy is a closed system, so money put anywhere makes its way elsewhere. Spending money in restaurants and shops is most easily visible, but not necessarily any better than other investment.

Even in your example, the 1% putting money in the stock market provides capital for companies as well as income for banks and brokers and finance folk of all sorts (which can then be spent in restaurants and shops). Sure, lower income people have a higher propensity to spend a marginal dollar (because they have to), but that isn't necessarily "better".