The Leisure Economy
How Changing Demographics, Economics and Generational Attitudes Will Reshape Our Lives and Our Industries

Okay it has been a bit of an absence but I am BACK writing posts…on demographics, the economy and the leisure economy plus whatever else seems relevant…like today’s column by Lisa Belkin in the New York Times….as her stuff always is, it is shoved into the “Lifestyles” section, but in this case I think it is really an economics story…

The gist of the article is that U.S. companies are dealing with the increased price of gas and employee commuting costs in a variety of ways. Sure some of them are hiking salaries and bonuses a bit, but  more are looking for more creative ways to help manage costs. Topping the list is telecommuting (yup, that phenonmenon of the 90s that sometimes seemed more trouble than it was worth) and four-day work weeks. In the case of the latter, it is pretty much a five-days-work-in-four thing, rather than a move to part-time (which seems to be hated by North American employers and workers alike).

Here’s the thing: when gas prices sky-rocketed in the 70s, workers insisted on more money in wage compensation (go figure) and you got that whole nasty wage-price-stagflation spiral going on. Now, it would be naiive to think we’re not going to get some of that happening this round, but the tecommuting/short workweek thing is a new variation we didn’t see a few decades ago.  Things have changed though - not only do you have a huge appetite for leisure (as in 3-day work weeks) but you also have a lot of “exurbs” that have been tacked up since the 70s. After all, there really aren’t many ways to make a commute from Carolne County Virginia (one of the fastest growing exurbs of the last few years) to Washington, D.C. (distance 70 miles) in anything approaching a thrifty fashion.

This stuff is a big deal if you’re a central bank that sets interest rates, like oh i don’t know The U.S. Federal Reserve.  In previous economic cycles, higher gas prices inevitably meant higher interest rates to get things in line. If the gas hikes are not being passed on to employers in the form of higher wages then - dare I say it - this time in could be different.

This entry was posted on Thursday, August 7th, 2008 at 12:00 pm and is filed under In the News. You can follow responses to this entry through the Comments RSS Feed. You can leave a response or trackback from your site.