Seasonalities Greetings

To all the "Why I Would Never Read an Economics Blog" fans, our time together is coming to an end. Perhaps it was the curious title of this blog or maybe your passionate interest in the field of economics that lead you to this temple of knowledge and excitement. At any rate, we must get on with these final economic words of wisdom. 

A beach. Photo

As summer approaches, most of us can't help but think about the warm beach days and times spent drinking a refreshing smoothie of some sort. Or maybe you're an avid boardwalk-goer who dreams of playing the impossible games and fried Oreos. Whatever your ideal summer looks like, chances are you will spend time at the beach and inevitably consume various goods. 

The simple fact is that without the thousands of businesses in every shore town, we wouldn't have our fried Oreos or mango pineapple smoothies. And as the summer season approaches, these businesses are doing everything they can to ensure the maximum amount of revenue for the crucial months when the coastal population swells. 

These businesses ultimately understand the concept of seasonality, which Investopedia defines as "the periodic fluctuations in certain brines areas that occur regularly based on a particular season," such as summer. This means that businesses will have to shut down for part of the year because they are not able to cover their variable costs. 

Yum. Photo

One of my favorite places to go when I was lifeguard at the beach was Sam's Pizza in Wildwood, NJ. Many claim to have the "best pizza in the world," but this unassuming establishment may actually take the title. Anyway, out of curiosity I looked up how much revenue they take in during their peak months of operation, and I found that number to be approximately $730,000. They also had around 15 employees. Pretty crazy to think about. 

During the winter, Sam's and many other business are forced to close. But the money they make in the summer must enough to cover the fixed costs of renting or paying for their property. 

This concept of seasonality also applies to businesses like Wal-Mart and Best Buy, as Investopedia points out, who may hire tens of thousands of temporary workers in response to the increased demand. And I bet the stores need all the help they can get to deal with the borderline roots that occur on days like Black Friday. This is just extra proof of how influential seasonality is on the labor market. Fun stuff!!!

Ahhh, so that's why they need extra workers. Photo

If you're a normal person, chances are as you're sitting on the beach this summer you won't be thinking of seasonality. But maybe when you buy your smoothie you'll think, "Hey, this reminds me of seasonality." Wow. That was cringe-worthy, so I'm going to end the blog here. Happy summer. 

Planet Economics

Being at Penn State, we are surrounded by everything we need—and it's in a very close proximity to us. Just the other day I was thinking how lucky we are to have the all these nice, shiny facilities, including the gyms. And then I thought about the fact that Penn State students have to pay for the gym and this got me thinking. I wondered if a Penn State campus gym needs money when there are thousand of students already paying thousands in tuition, then how does a gym that charges $10 per month stay open?

When you don't skip the gym. Photo

After only a few minutes of research I came up with an interesting article explaining how these "cheap" gyms, like Planet Fitness, really don't want you to go to the gym. What these gyms really want is for people to keep paying the monthly fee, while not actually going to the gym. If you're not convinced by this claim, understand that the average Planet Fitness has around 6,000 members, but the facilities can only accommodate around 300 at a time. If the gym is taking on this many people, it is clear that they expect many people not to go. 

This reminds me of when I first started going to the gym and how I went on a inconsistent basis. I actually didn't go for a few months after I signed up. For the gym, this was ideal. They did not have to provide me with any services, while I continued to pay money. Additionally, the low cost of the membership, $10, made me think I wasn't wasting too much money. But after realizing how the gym was basically cold-heartedly stealing my money, I decided to change my course of action. Perhaps I'm just cheap, though. 

I remember when I first started. Photo 

And since this is an economics blog, there has to be some sort of actual economic speak included right? Right. Well, this per month payment plan is a lucrative model used by almost every gym. According to Entrepreneur.com, "the consistency in revenue allows subscription-based companies to easily calculate the lifetime value of a customer, manage inventory, and offer simple pricing." In this way, Planet Fitness is able to draw people in with an easily-digestible rate of $10 per month. 

This upsets me because after I decided to leave Planet Fitness and I joined another gym, I continued to pay their membership fee for a few months. Why? Because I was lazy and didn't feel like going going to deactivate my account. And $10 isn't so bad right? WRONG. Don't fall into this fallacy. If you have a gym membership, then use it!