By Harrison Colcord
With October wrapping up, the nation is on the verge of
jumping into this year’s holiday season—meaning a whirlwind of economic flux as
a result of the purchasing of decorations, feasts, and gifts. To prepare for
this retail onslaught, hundreds of companies across the nation are hiring an
estimated total of 500,000 employees, as well as prepping for price slashing as
Black Friday looms in the upcoming month.
Macy’s is planning on hiring 80,000 employees within the
next month, 3,000 at their Manhattan location alone which may push the marginal
product of labor to its limit, but how can they afford not to with such large
amounts of work to be done. Looking at this situation from a modified law of
demand standpoint, large consumer turnout predictions affect Macy’s
expectations about employees needed for the future to increase, and due to the
time consuming hiring process, the demand for these employees is both high and
at hand.
Now, with this increase in staff comes an
increase to fixed costs at about $8/hour for each employee, but with the
quantity of product moving out the door in the Holiday season, the increased
revenue compensates for increased labor.
With all this job creation, how can it be anything
other than beneficial to the economy, right? The extra income that low/middle
class families will receive from holiday jobs “will more than likely
immediately [be] inject[ed] into
the economy during the holiday season”, but unfortunately, “these employment increases should not greatly affect
national numbers after they have been seasonally adjusted”. The effects of
holiday shopping/employment become diluted with each passing month, and with
any form of decrease in the number of holiday consumers, the effects will
simply be diluted that much quicker.
The government shutdown this past month has not only cost
us with each day of closure, but decreased the desire for consumers to go out
and spend this holiday due to uncertain expectations about the future. Compared
to 2012 alone—already a difficult year to compare to as a result of the approaching
fiscal cliff at the time—the “average
consumer will spend 2% less on holiday purchases”, displaying the elasticity of most items bought
during the season.
Though some argue that the holiday
hype and its effects on the economy are minimal if even existent at all, I see
it as nothing but beneficial. Numbers aside, it’s a time of year for industries
to display their new technologies and services, giving a sense of hope for a
better future to thousands of consumers. As diluted as the effects may become as
time carries on, it will perpetually approach zero and compound with the
previous year, because not only are retail stores benefiting from holiday
purchases, but so are the manufacturers and shipping companies. The holiday
spending season is a time for a transition of wealth among all members of our
economy, and consumers need to be encouraged to buy with confidence knowing
their dollar will be put into circulation for the betterment of our nation.
Bibliography
I never really thought companies had to hire so many more employees just for black Friday. Which like you said is really good for the economy. I always just thought black Friday was a day that companies tried to sell all everything they had to not go broke for the year, instead of it actually being such a big day for the economy and how it operates.
ReplyDeleteThis is a really cool topic to write about because the holiday seasons really incorporate a lot more than what we think. This demand for more employees is good in order to get people jobs and that little extra cash which they then can go out and spend, thus helping stimulate the economy. Jobs has been a problem for the US, and the holiday seasons help boost this downfall. So I agree, I see this as a very beneficial thing for our nation. Since Black Friday is one of the biggest spending times of the year. Though it is found that we will spend less this holiday than past years, I don''t see how such a hyped up day could hurt the nation.
ReplyDeleteBlack Friday is a really exciting day for everyone, including shoppers, businesses, and the economy. It's amazing how much money is made on one day. This high spike in business is very positive for the economy as a whole. It allows for money to flow at a higher and faster rate. It is very surprising how much this actually effects the economy, and how we are making a difference just by taking advantage of some sales at our favorite stores.
ReplyDeleteI feel kind of bad for those people that are only seasonally employed. They are not able to have a steady job and they know exactly what they are getting themselves into. But for some people it just isn't a choice; it is a necessity. They need some way to be able to provide for the rest of their family as well as themselves. But hey, at least they have this season to work as much as possible to be able to provide for themselves for at least a little while.
ReplyDeleteI hope that people will be able to buy with confidence this coming season. Because as you said with what has happened in 2012 it's difficult to tell the overall future of our economy and country. If we buy with confidence our economy will be more active for the better of our nation. So to all of you out there this holiday season SPEND, SPEND, SPEND.
ReplyDeleteI think it's crazy that businesses hire that many more people just for days like black Friday. Although its good for the economy, it still sucks for the people who can only get seasonal jobs because they cant get a stable job. Its impressive that black Friday is also such a big day for the economy.
ReplyDeletePlease revise.
DeleteThe companies hosting black Friday events aren't losing a penny. People fail to realize because of their sheer stupidity that when buying in bulk the prices are way lower than then one could have ever guessed. We've all seen a sixty dollar video game before, and they cost around a dollar to make. Major stores buy them for thirty bucks a pop and flip them for sixty and on black Friday they sell for forty-five dollars. On top of the crazy mark ups, we've got more crazy markups. They might sale an item is on sale for 75% but, the item is normally raised in price for 75% to cancel it out. It's called marketing also known as false advertising. The same applies to Christmas...
ReplyDeleteWorking in retail, I realize the importance of Black Friday. It is a major day for the economy. With everything going on sale, the demand increases insanely. At my job we hire almost 30 extra employees just for Black Friday. It's sad to think these people are only working for the weekend, but it has become a normalcy in our economy.
ReplyDeleteI would hate to work in a store like Macy's on Black Friday, but I guess it is good that it is getting jobs out there for people, I think that they should increase the wage for these days because they know that it's going to be that much more busy. But nice topic, it helped me spark my idea for what I wrote about, Cyber Monday. Well written though! Thank you for the extra information.
ReplyDeleteWhile others may not, I definitely believe holiday hype has a lot to do with the economy. Some people save their money all year in order to buy loved ones presents during the holidays. It's probably the time of the year when the most money is spent, on both sides of the market. The obvious spender is the consumers, but the businesses spend a lot of money on advertising. During Black Friday, there are more store ads in the newspaper than any other time of the year.
ReplyDeleteThe thing about hiring more employees is, once they're no longer needed, what are they going to do? Are the companies going to keep them on call for times of need or infuse them into the normal flow of the company? Probably not. The stores hire these people for the season, I understand that, but then due to certain circumstances those new employees get cut. Last hired, first cut is how most companies go. I would agree with David, that working for those types of stores would not be the highlight of my holiday season. The thing that worries me about the holiday season is that with all of those new workers, what are they going to do when the work isn't needed anymore? Hmm....
ReplyDeleteIt was shocking to hear just how many employees were being hired due to the holiday season. I have always heard rumors about how stores needed more workers during this time period, but I never realized just how many they intended to hire. I agree with David when he says how he would hate to work over the holiday season. Its too much stress alone saving money and looking for presents/decorations, but working around them too would be crazy!
ReplyDeleteIt is interesting to note that when the holiday season rolls around that firms such as Macy’s hires 80,000 extra people. I never thought about how much extra workers they have to hire to make it a successful day. Furthermore, I think by hiring all these extra workers it helps stimulate the economy because people have more money to spend; therefore, money is circulating from firms to households.
ReplyDeleteBlack Friday is an exciting yet seems like a very stressful time of the year for jobs. For people it is something that they look forward to once a year after thanksgiving, but by really looking into the holiday Black Friday you could see how intense it really is! It is amazing to see how many people get hired over the holiday season, it must help companies a lot with all the extra help they can get but it must also be very stressful with all the chaos that occurs. From my experience of Black Friday shopping I know it is insane because I remember one year families fighting in fights just over less priced TVs.
ReplyDeleteYour analysis of this short-yet-sweet period of mass employment is very well structured; starting with a overview, then positives/negatives, before finishing with overall effect made understanding this seasonal employment example much easier. The one thing I'd have to say is how remarkable the economy is in this time of the year: unemployment drastically declines, amount of goods sold shoots through the roof as demand is increased, prices are so low that certain products open up to whole new wealth classes, yet at the same time these massive companies (and major contributors to the national GDP) are prospering like no other time in the year...I guess it really is the season to be jolly.
ReplyDeleteThis topic has never came to mind for me. I have never realized how many people are actually employed for the holiday season. The benefits that come from the holiday season are incredible. Unemployment goes down, the economy gets a huge boost because of spending, and everyone is happy because it is the holidays. I do however, believe that there is no negative side effect to this movement by employers. If the money earned by these people, and then immediately used up, well than that's only improving the economy.
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