Paying for it ALLPaying for it ALL

Recreation & Leisure: Recreation & Leisure: Impact on the EconomyImpact on the Economy

Given the recent changes in the Given the recent changes in the economy….economy….how how has this impacted has this impacted your your leisure spending?leisure spending?

Paying for it AllPaying for it All• How do we measure wealth?

• In addition to money and job, we measure wealth by….

– “what we have” or – “what other people have”– Items, Goods, Toys

Paying For It AllPaying For It All

• all have basic needs that must be metall have basic needs that must be met

• Then we cater to our wantsThen we cater to our wants

• We like to buy and accumulate “things”We like to buy and accumulate “things”

• We are a consumptive societyWe are a consumptive society

• What type of “things” do we buy?What type of “things” do we buy?

Paying For It AllPaying For It All

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Paying for it AllPaying for it All

Paying For It AllPaying For It All

Paying For It AllPaying For It All

Paying For It AllPaying For It All

• These are all leisure products…These are all leisure products…• Think about this for a minute……Think about this for a minute……

– By having these items do they make you By having these items do they make you wealthy?wealthy?

– Do wealthy people have more “stuff”?Do wealthy people have more “stuff”?

Discussion:Subject: Consumerism

• The consumerist lifestyle that most of us have adopted encourages us to think of leisure as a basket of commodities from which we pick and choose.

– Minute Paper - • Instead of being participants of unique and personal

recreation activities, are we consumers of leisure experiences designed and mass-produced by others?

Economic IssuesEconomic Issues• Time and money are our two scarcest resources Time and money are our two scarcest resources

and how we spend both in large part determines and how we spend both in large part determines the nature of our economy and is central to our the nature of our economy and is central to our economyeconomy

– About 1/3 of our time is leisureAbout 1/3 of our time is leisure

– Americans spend about a 1/3 of income on Americans spend about a 1/3 of income on leisure pursuitsleisure pursuits

– About 1/3 of our land is devoted to leisure and About 1/3 of our land is devoted to leisure and recreationrecreation

Economic IssuesEconomic Issues• Over the past 100 years, lower-income households Over the past 100 years, lower-income households

experienced a larger increase in living standards experienced a larger increase in living standards than higher-income ones. than higher-income ones.

• One reason is that in the 1890s, workers in the One reason is that in the 1890s, workers in the lowest level of wage distribution labored nearly 11 lowest level of wage distribution labored nearly 11 hours each day, while those in the highest level hours each day, while those in the highest level worked nine-hour days. worked nine-hour days.

• Now, it's the highest-paid workers who put in the Now, it's the highest-paid workers who put in the longest days.longest days.

Standard of LivingStandard of Living

• How would you define “standard of How would you define “standard of living”?living”?

““Standard of Living”Standard of Living”• A level of material comfort in terms of goods and services available to A level of material comfort in terms of goods and services available to

someone someone

• The overall quality of life that people experience The overall quality of life that people experience

• In principle, an economy's ability to produce the goods and services In principle, an economy's ability to produce the goods and services that consumers use to satisfy their wants and needs.that consumers use to satisfy their wants and needs.

• The aspirations of an individual or group towards goods and services.The aspirations of an individual or group towards goods and services.

• The amount of goods and services that people can afford to buy with The amount of goods and services that people can afford to buy with their income. their income.

• Measure of the level of existence that a particular group of people Measure of the level of existence that a particular group of people enjoy; measure of the availability of necessities and luxuries to a group enjoy; measure of the availability of necessities and luxuries to a group of people.of people.

Standard of Leisure

• How about defining a “standard of leisure”

Life in America Is Getting Better• Until this year….most people were optimistic about

their own prospects. For one thing, the standard of living is higher.

– For instance, today's Ford Taurus, with air conditioning and air bags, costs 70% less in real dollars than a Model T did.

– The typical house today is 40% larger than a 1970, and only 3% of Americans are living in overcrowded conditions -- with more than one person per room.

– And where it typically took a half-hour of work to purchase a McDonald's hamburger in the 1950s, today it takes only 180 seconds of work.

Leisure Spending• The most cited government statistics on leisure is the

recreation portion of consumer spending– Dept of commerce defines recreation spending on home electronics, radio &

TV, music, entertainment, sporting goods, amusements, home gardening, toys, books, magazines, boats, motor homes, and bicycles.

• The majority of leisure is classified elsewhere– For example: of $$$ spent on transportation, 1/3 involved leisure travel, 1/3 of

automobile miles for recreation trips, and 60% of air travel is for leisure

• Leisure accounts for over $2 trillion or about 1/3 of all consumer spending….America’s #1 economic activity

• Worldwide….tourism is a $3.6 trillion a year industry

Leisure Jobs• Tourism employs 225 million people in US (10% of

all employment)

• ¼ million public sector recreation jobs in federal, state, county and local agencies

• 2 million writers, artists, entertainer, and pro athletes

• If $40,000 in consumer spending generates a job, a trillion dollars in leisure spending translates into 25 million jobs or about a ¼ of all jobs

Why Isn’t Leisure’s Economic Why Isn’t Leisure’s Economic Importance Recognized?Importance Recognized?

• With all of this consider, leisure seldom comes With all of this consider, leisure seldom comes to mind when discussing our economy…unless to mind when discussing our economy…unless it is tied to unwanted leisure from it is tied to unwanted leisure from unemployment. Why is this???unemployment. Why is this???

– Hard to see relationship if leisure is time off of work…since work is so Hard to see relationship if leisure is time off of work…since work is so closely tied to economic standardsclosely tied to economic standards

– Virtually all of our economic theories were developed during the Virtually all of our economic theories were developed during the industrial revolution where manufacturing and agriculture led the industrial revolution where manufacturing and agriculture led the economy and leisure was merely time to recuperate for more economy and leisure was merely time to recuperate for more work…..”post-industrial is now a goods to service.work…..”post-industrial is now a goods to service.

• The recognition of leisure as a social and The recognition of leisure as a social and economic force has seen a difficult adjustment economic force has seen a difficult adjustment in our value system.in our value system.

Economic Significance of LeisureEconomic Significance of Leisure

• Fact….most consumer spending occurs Fact….most consumer spending occurs during during leisure time leisure time– Holidays and festivalsHolidays and festivals– VacationsVacations

• Shopping for pleasure Shopping for pleasure has become one of has become one of our most popular leisure activitiesour most popular leisure activities– Mega-malls, shopping centers for teenagers to Mega-malls, shopping centers for teenagers to

gather, seniors to exercise, community events, gather, seniors to exercise, community events, place to browse and pass the timeplace to browse and pass the time

AdvertisingAdvertising• In addition to shopping, the vast majority of In addition to shopping, the vast majority of

advertising is directed at us during our favorite leisure advertising is directed at us during our favorite leisure pursuits.pursuits.

– Try to watch TV, listen to radio, read a magazine, Try to watch TV, listen to radio, read a magazine, attend a movie, go to a sporting event or take a attend a movie, go to a sporting event or take a leisurely ride without being interrupted by some leisurely ride without being interrupted by some commercial message. commercial message.

– Businesses try to sell to us during our leisure and in Businesses try to sell to us during our leisure and in most cases directly use our interest in leisure to most cases directly use our interest in leisure to help sell their product. help sell their product.

• Ex, Super Bowl and NCAA BasketballEx, Super Bowl and NCAA Basketball

People Are Having More FunPeople Are Having More Fun

• Trying to measure people's "living Trying to measure people's "living standards" is a tough task say economists. If standards" is a tough task say economists. If people had more time and money for people had more time and money for recreation and leisure, living standards were recreation and leisure, living standards were obviously improving.obviously improving.

• Recreational spending.Recreational spending.

Some consumption research Some consumption research findings:findings:

• 100 years ago, 100 years ago, 75%75% of workers' incomes of workers' incomes were spent on food, shelter and clothing were spent on food, shelter and clothing -- with less than -- with less than 2%2% spent on leisure. spent on leisure.

– Today, the average household need devote Today, the average household need devote only only 38%38% of its income to the necessities -- of its income to the necessities -- allowing allowing 6%6% to be devoted to recreation. to be devoted to recreation.

– At the beginning of the 20At the beginning of the 20thth century, a century, a family's recreational spending tended to family's recreational spending tended to rise by rise by 2%2% for every for every 10%10% rise in income. rise in income.

– By 2007, a By 2007, a 10%10% income gain led to income gain led to roughly a roughly a 13%13% rise in income rise in income

Thus, Americans of all income levels are able to spend much more of their money on having fun

What is going to happen to our leisure spending What is going to happen to our leisure spending now….with the economic situation of today????now….with the economic situation of today????

• Are we going to stay the same? Why/why not?

• Change? If so, how?

Measuring Living StandardsMeasuring Living Standards• An alternative technique for measuring living standards

is to examine spending on recreation rather than income per capita.

– This technique assumes that, after providing for food, clothing, shelter, and other necessities of life, people will use some of whatever income is left over on purchasing recreation.

• As the proportion of income needed to meet necessities declines, people will have more money for vacations, radios, TVs, CDs, and other recreational goods and activities that strike their fancy.

• Rising recreational expenditures -- "the ideal luxury goods" -- are seen as an indication of rising living standards.

Consumers Put Consumers FirstConsumers Put Consumers First

• The 19th-century economist Adam Smith said "consumption is the sole end and purpose of all production."

• For instance, free trade helps the economy by putting consumers first:

– If America imports inexpensive Italian shoes many U.S. shoemakers may lose their jobs, but 260 million Americans get a great bargain for a pair of shoes. With the money they save, consumers buy more products and can start their own businesses.

– Do you agree with this statement?

The Leisure EconomyThe Leisure Economy

• Nation’s 75 million baby boomers have entered their peak earning years – 45-54 and are spending unprecedented sums on recreation and leisure– Last year avg consumer spending on recreation rose

from 5.5% to 8.5%

– 50.7 million Americans went to orchestra concerts, golfers doubled since 1970 to 24.3 million and 4.4 million to luxury cruise.

– 1,000 amusement parks compared to only 362 in 1970

– Paid vacations and holidays grew from 15.5 days per worker in ’70 to 22.5 days in ’95.

Consumer Spending…More Fun and Consumer Spending…More Fun and GamesGames

• Look for American families to more than double their spending on Look for American families to more than double their spending on entertainment and communications over the next decade. entertainment and communications over the next decade.

• Entertainment has come to be viewed in the U.S. "as something between a Entertainment has come to be viewed in the U.S. "as something between a constitutional right and a benefit.“ constitutional right and a benefit.“

• The typical household will spend more than $4,200 in 2007 on movies, The typical household will spend more than $4,200 in 2007 on movies, newspapers, sporting events and all forms of entertainment and newspapers, sporting events and all forms of entertainment and communications. That compares to spending of just $1,900 last year. communications. That compares to spending of just $1,900 last year.

• Print will still dominate media with $205 billion in revenue in 2007 -- Print will still dominate media with $205 billion in revenue in 2007 -- compared to $122 billion now. compared to $122 billion now.

• The Internet will show the fastest growth, soaring about 26 percent a year The Internet will show the fastest growth, soaring about 26 percent a year to $63.1 billion while wireless phones will generate $112 billion, up from to $63.1 billion while wireless phones will generate $112 billion, up from $33.5 billion.$33.5 billion.

• Cable and satellite television will grow more than 10 percent a year to Cable and satellite television will grow more than 10 percent a year to generate $91.2 billion in 2007 -- passing the combined revenue for movie generate $91.2 billion in 2007 -- passing the combined revenue for movie theaters, home video, video and computer games, entertainment theaters, home video, video and computer games, entertainment merchandise, and recorded music.merchandise, and recorded music.

Measuring Living StandardsMeasuring Living Standards• At the start of the 20At the start of the 20thth century, pleasure spending was considered century, pleasure spending was considered

a luxury that could not be afforded by low-income households. a luxury that could not be afforded by low-income households.

• But by the mid-1930s, low cost recreational activities, such as But by the mid-1930s, low cost recreational activities, such as motoring, movies, and the radio had already spread among the motoring, movies, and the radio had already spread among the people, especially for those who had jobs. people, especially for those who had jobs.

• The government also invested heavily in recreational facilities.The government also invested heavily in recreational facilities.– The number of public swimming pools more than tripledThe number of public swimming pools more than tripled– The number of baseball diamonds more than doubled The number of baseball diamonds more than doubled

between 1921 and 1930 alone. between 1921 and 1930 alone. – There were more parks. There were more parks. – And, listening to the radio was a favorite activity of all And, listening to the radio was a favorite activity of all

classes in the 1930s. Today the popular medium is television. classes in the 1930s. Today the popular medium is television.

• Hours of work also have declined over the Hours of work also have declined over the decades. Between 1890 and 1940 the decades. Between 1890 and 1940 the average work week fell by 20 hours and average work week fell by 20 hours and retirement rates of men older than 64 rose retirement rates of men older than 64 rose by almost 30%. by almost 30%.

• After 1940, paid vacations, holidays, sick After 1940, paid vacations, holidays, sick days, and personal leave increased; days, and personal leave increased; retirement rates continued to rise. But the retirement rates continued to rise. But the length of the average work week remained length of the average work week remained unchanged.unchanged.

Measuring Living StandardsMeasuring Living Standards

Consumer Expenditures• The Employment Policy Foundation notes that The Employment Policy Foundation notes that

between 1970 and 1994 the number of recreational between 1970 and 1994 the number of recreational golfers rose from 11.2 million to 24.3 milliongolfers rose from 11.2 million to 24.3 million

• Americans taking cruises increased from 500,000 Americans taking cruises increased from 500,000 to 4.4 millionto 4.4 million

• Recreational boat ownership grew from 8.8 million Recreational boat ownership grew from 8.8 million to 16.6 millionto 16.6 million

• Attendance at symphonies and operas climbed Attendance at symphonies and operas climbed from 17.3 million to 50.7 million. from 17.3 million to 50.7 million.

Today’s College Student Has More Today’s College Student Has More Purchasing PowerPurchasing Power

• The college-bound summer-worker of 1950, earning the minimum wage, The college-bound summer-worker of 1950, earning the minimum wage, would accumulate just $282 -- enough to purchase a black-and-white would accumulate just $282 -- enough to purchase a black-and-white television, a record player, a clock radio and a Brownie camera. television, a record player, a clock radio and a Brownie camera.

• By 1970, the minimum-wage-earning teen would wind up with $618 after 10 By 1970, the minimum-wage-earning teen would wind up with $618 after 10 weeks of summer work -- sufficient to purchase a black-and-white TV, a weeks of summer work -- sufficient to purchase a black-and-white TV, a stereo, an electronic adding machine, a used typewriter and a clock radio. stereo, an electronic adding machine, a used typewriter and a clock radio.

• Now jump ahead to the year 2009 and a similar earner ends the summer with Now jump ahead to the year 2009 and a similar earner ends the summer with $2,000 -- and only a small tax bite. Here are the items that $2,000 would buy to $2,000 -- and only a small tax bite. Here are the items that $2,000 would buy to furnish a dorm room: A laptop at $700, a 26" TV, a DVD player, a cell phone furnish a dorm room: A laptop at $700, a 26" TV, a DVD player, a cell phone and a mp3 player. and a mp3 player. – Also throw in a stereo system, a small microwave oven and a toaster oven, Also throw in a stereo system, a small microwave oven and a toaster oven,

a coffeemaker, a blender, ironing board and iron, a hand-held vacuum, a a coffeemaker, a blender, ironing board and iron, a hand-held vacuum, a table lamp and an alarm clock. And there would still be money left over table lamp and an alarm clock. And there would still be money left over for an electric toothbrush, and a seat massager-- with $10 remaining. for an electric toothbrush, and a seat massager-- with $10 remaining.

• That is just from working at the minimum wage. Actually, 71 percent of That is just from working at the minimum wage. Actually, 71 percent of America's youths ages 15-17 earn an hourly wage above the $6.55 federal America's youths ages 15-17 earn an hourly wage above the $6.55 federal minimum wage, according to Labor Department data ($7.25 as of 7/24/09). minimum wage, according to Labor Department data ($7.25 as of 7/24/09).

Discussion:Discussion:Subject: Economic ImpactSubject: Economic Impact

• So, does leisure impact the economy?So, does leisure impact the economy?

• Elaborate on how something like the Elaborate on how something like the Tennessee Titans have an impact on our Tennessee Titans have an impact on our economyeconomy– Remember things likeRemember things like

• Ticket sales, hotel stays, food, shopping…etc….Ticket sales, hotel stays, food, shopping…etc….

• What about with the current economic What about with the current economic situation….how will this impact leisure situation….how will this impact leisure spending???spending???