Is Social Media Taking Over Our Economy?
Zoe Bierce
Through generations the use of Instagram, Twitter, facebook, and other social media has become so intertwined in our daily lives that it is becoming an essential thing for some. Everywhere you look people are taking pictures to post on their snapchat stories, or are typing a long rant that they want to post on a facebook page. With social media becoming more and more crucial in our day to day lives, it has begun to affect our economy too.
Social media has continued to advance, they create new ways to shop, spend, and show off people’s money. “Social media is transforming banking relationships in very significant ways, from improving customer service to allowing users to send money to others via online platforms. New financial technology companies are using social media to help people simply open a bank account. Social media can even impact your ability to get a loan.”(World Economic Forum) By allowing people to follow links on social media platforms it offers an opportunity benefit to both the consumer and producer, and that is it gives a simpler way for people to transfer money and a quicker time for people or banks to receive the money. Since it also affects your chances of receiving a loan, it allows banks to determine whether or not someone will be able to pay off their loan. By improving their decision making, it will allow banks to make more money by having reliable people pay their loans back. By having social media make it easier to spend money, it is boosting the economic GDP(Gross Domestic Product) per Capita.
The graph above shows the amount of social media in each city and the GDP per capita for each. According to the graph above, the more prominent social media is in the area the GDP per capita is usually higher. “It stands to reason that the adoption of the use of social media at the city level would rise alongside local incomes and the overall level of economic development. And that is what we find. Social media is associated with both economic output and income.”(The Atlantic) By allowing it to be easier to spend money online right from a store or banks account, consumers are spending their money faster allowing companies to make money faster. By increasing the spending for finals goods or services online, it is increasing the amount of money being brought into the economy, raising the GDP per capita thus increasing the GDP for the country.
Overall, with the increase of popularity in social media it is allowing producers and consumers to exchange more money, increasing both GDP and GDP per Capita.
Works Cited
Florida, Richard. "Is Social Media Driving the Economy?" The Atlantic. Atlantic Media Company, 27 Oct. 2010. Web. 04 Apr. 2017.
Guzman, Alejandra; Vis, Farida “6 Ways Social Media is Changing the World” World Economic Forum. World Economic Forum, 3 Apr. 2017. Web. 04 Apr. 2017
Just some really great points that you brought up Zoe, great job. I did not even realize how much social media could affect the economy and even the banks too. I do agree with you though that social media is in a sense completely taking over everyone's lives. I have one question though. I can understand how social media affects the GDP and GDP per capita, but by how much does it actually do so?
ReplyDeleteI agree social media and money are becoming ever more intertwined with services like Snapcash. What I don't understand though is what makes one social media user more likely to pay off a loan than another? I'd be interested to see what algorithms the banks use in order to determine whether or not a person qualifies. Is it how often they post? What accounts they follow? I personally don't understand the correlation between social media use and ability to pay off a loan.
ReplyDeleteI never realized that social media could affect the economy but after reading I can understand why. I agree that social media is very popular and taking over. I think that producers get more money because people can shop online and make easier purchases than having to go to a store and not finding the size or style of clothes someone needs.
ReplyDeleteSomething else to consider about the graph is that it also makes more sense for people who make the most money to have more smart devices to use to be on social media than the ones that don't have as much income. People with high paying jobs also able to go on social media more often compared to people with part-time jobs at a store and such where they are constantly busy and not able to go on their phones. Also there high insanely highly paid internet stars on YouTube and Twitch that certainly helps them and can help other companies if they are sponsoring, but the downside is that to get to the point of having a job on the internet as your only job is only possible for a small amount of people. In a way social media has created more jobs, but only by a small percentage but in the future if people and companies keep focusing on social media the overall GDP per capita could increase significantly.
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