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Paying for it ALL Recreation & Leisure: Impact on the Economy
Given the recent changes in the economy….how has this impacted your leisure spending?
Paying 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 All • all have basic needs that must be met • Then we cater to our wants • We like to buy and accumulate “things” • We are a consumptive society • What type of “things” do we buy?
Paying For It All http://www.jaguarusa.com/us/en/_useful_links/build_your_jaguar.htm
Paying For It All • These are all leisure products… • Think about this for a minute…… • By having these items do they make you wealthy? • 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 Issues • Time and money are our two scarcest resources and how we spend both in large part determines the nature of our economy and is central to our economy • About 1/3 of our time is leisure • Americans spend about a 1/3 of income on leisure pursuits • About 1/3 of our land is devoted to leisure and recreation
Economic Issues • Over the past 100 years, lower-income households experienced a larger increase in living standards than higher-income ones. • One reason is that in the 1890s, workers in the lowest level of wage distribution labored nearly 11 hours each day, while those in the highest level worked nine-hour days. • Now, it's the highest-paid workers who put in the longest days.
Standard of Living • How would you define “standard of living”?
“Standard of Living” • A level of material comfort in terms of goods and services available to someone • The overall quality of life that people experience • In principle, an economy's ability to produce the goods and services that consumers use to satisfy their wants and needs. • The aspirations of an individual or group towards goods and services. • The amount of goods and services that people can afford to buy with their income. • Measure of the level of existence that a particular group of people enjoy; measure of the availability of necessities and luxuries to a group 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 Importance Recognized? • With all of this consider, leisure seldom comes to mind when discussing our economy…unless it is tied to unwanted leisure from unemployment. Why is this??? • Hard to see relationship if leisure is time off of work…since work is so closely tied to economic standards • Virtually all of our economic theories were developed during the industrial revolution where manufacturing and agriculture led the economy and leisure was merely time to recuperate for more work…..”post-industrial is now a goods to service. • The recognition of leisure as a social and economic force has seen a difficult adjustment in our value system.
Economic Significance of Leisure • Fact….most consumer spending occurs during leisure time • Holidays and festivals • Vacations • Shopping for pleasure has become one of our most popular leisure activities • Mega-malls, shopping centers for teenagers to gather, seniors to exercise, community events, place to browse and pass the time
Advertising • In addition to shopping, the vast majority of advertising is directed at us during our favorite leisure pursuits. • Try to watch TV, listen to radio, read a magazine, attend a movie, go to a sporting event or take a leisurely ride without being interrupted by some commercial message. • Businesses try to sell to us during our leisure and in most cases directly use our interest in leisure to help sell their product. • Ex, Super Bowl and NCAA Basketball
People Are Having More Fun • Trying to measure people's "living standards" is a tough task say economists. If people had more time and money for recreation and leisure, living standards were obviously improving. • Recreational spending.
Some consumption research findings: • 100 years ago, 75% of workers' incomes were spent on food, shelter and clothing -- with less than 2% spent on leisure. • Today, the average household need devote only 38% of its income to the necessities -- allowing 6% to be devoted to recreation.
At the beginning of the 20th century, a family's recreational spending tended to rise by 2% for every 10% rise in income. • By 2007, a 10% income gain led to roughly a 13% 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 now….with the economic situation of today???? • Are we going to stay the same? Why/why not? • Change? If so, how?
Measuring 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 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 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 Games • Look for American families to more than double their spending on entertainment and communications over the next decade. • Entertainment has come to be viewed in the U.S. "as something between a constitutional right and a benefit.“ • The typical household will spend more than $4,200 in 2007 on movies, newspapers, sporting events and all forms of entertainment and communications. That compares to spending of just $1,900 last year. • Print will still dominate media with $205 billion in revenue in 2007 -- compared to $122 billion now. • 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 $33.5 billion. • 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 theaters, home video, video and computer games, entertainment merchandise, and recorded music.
Measuring Living Standards • At the start of the 20th century, pleasure spending was considered a luxury that could not be afforded by low-income households. • But by the mid-1930s, low cost recreational activities, such as motoring, movies, and the radio had already spread among the people, especially for those who had jobs. • The government also invested heavily in recreational facilities. • The number of public swimming pools more than tripled • The number of baseball diamonds more than doubled between 1921 and 1930 alone. • There were more parks. • And, listening to the radio was a favorite activity of all classes in the 1930s. Today the popular medium is television.
Measuring Living Standards • Hours of work also have declined over the decades. Between 1890 and 1940 the average work week fell by 20 hours and retirement rates of men older than 64 rose by almost 30%. • After 1940, paid vacations, holidays, sick days, and personal leave increased; retirement rates continued to rise. But the length of the average work week remained unchanged.
Consumer Expenditures • The Employment Policy Foundation notes that between 1970 and 1994 the number of recreational golfers rose from 11.2 million to 24.3 million • Americans taking cruises increased from 500,000 to 4.4 million • Recreational boat ownership grew from 8.8 million to 16.6 million • Attendance at symphonies and operas climbed from 17.3 million to 50.7 million.
Today’s College Student Has More Purchasing Power • The college-bound summer-worker of 1950, earning the minimum wage, would accumulate just $282 -- enough to purchase a black-and-white 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 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. • 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 furnish a dorm room: A laptop at $700, a 26" TV, a DVD player, a cell phone and a mp3 player. • 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 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. • 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 minimum wage, according to Labor Department data ($7.25 as of 7/24/09).
Discussion:Subject: Economic Impact • So, does leisure impact the economy? • Elaborate on how something like the Tennessee Titans have an impact on our economy • Remember things like • Ticket sales, hotel stays, food, shopping…etc…. • What about with the current economic situation….how will this impact leisure spending???