Guess I don't get it then... will need to research Ceremonial Burial sooner.
Maybe I can try to explain, if you don't get it. Sorry in advanced if this isn't what you meant by you not getting it. Or if it's a bad explanation
I think the easiest way to think of it is as each 1000 population as a individual person, who you give a individual luxury too. Once every individual has a luxury, then you get +1 moral, when every individual has 2 luxuries, you get +2 moral.
So think of it like this, you have 12 people (11000 pop and a bonus from the labor who counts as an extra 1000 pop just for this turn.)
Guy 1
Guy 2
Guy 3
Guy 4
Guy 5
Guy 6
Guy 7
Guy 8
Guy 9
Guy 10
Guy 11
Guy 12
First, you're producing 1 spirituality, each person wants .1 spirituality, so you can give it to 10 people.
Guy 1: Spirituality
Guy 2: Spirituality
Guy 3: Spirituality
Guy 4: Spirituality
Guy 5: Spirituality
Guy 6: Spirituality
Guy 7: Spirituality
Guy 8: Spirituality
Guy 9: Spirituality
Guy 10: Spirituality
Guy 11:
Guy 12:
As you can see, you're missing 2 people, so this doesn't give any extra moral. However, you can fill in those gaps. The easiest way to do it would be clothing, each person wants .1 clothing, so you use .2 clothing to do something like this
Guy 1: Spirituality
Guy 2: Spirituality
Guy 3: Spirituality
Guy 4: Spirituality
Guy 5: Spirituality
Guy 6: Spirituality
Guy 7: Spirituality
Guy 8: Spirituality
Guy 9: Spirituality
Guy 10: Spirituality
Guy 11: Clothing
Guy 12: Clothing
Now each person has 1 luxury, so you get +1 moral. If you want to go further, you can give out more clothing, spending an extra 1 clothing to go to this state
Guy 1: Spirituality. Clothing
Guy 2: Spirituality. Clothing
Guy 3: Spirituality. Clothing
Guy 4: Spirituality. Clothing
Guy 5: Spirituality. Clothing
Guy 6: Spirituality. Clothing
Guy 7: Spirituality. Clothing
Guy 8: Spirituality. Clothing
Guy 9: Spirituality. Clothing
Guy 10: Spirituality. Clothing
Guy 11: Clothing
Guy 12: Clothing
This is the current state of your turn. But since you can't give 2 of the same luxury to each population, at this point you can't satisfy the needs of guy 11 or 12 by giving out more clothing. So in this state you're still only getting +1 moral, it's just as good as the previous state where you only spent .2 clothing. That's somewhat a waste of clothing, if you didn't want to waste that 1 clothing you can either go back to the previous state, using only .2 clothing. Or you can use an extra food, since .5 food can also be used as a luxury, then you would end up like this
Guy 1: Spirituality. Clothing
Guy 2: Spirituality. Clothing
Guy 3: Spirituality. Clothing
Guy 4: Spirituality. Clothing
Guy 5: Spirituality. Clothing
Guy 6: Spirituality. Clothing
Guy 7: Spirituality. Clothing
Guy 8: Spirituality. Clothing
Guy 9: Spirituality. Clothing
Guy 10: Spirituality. Clothing
Guy 11: Clothing. Food
Guy 12: Clothing. Food
And get +2 moral.
Hopefully that explanation helped? That's how I think of it at least.