Women’s spending power was an undercurrent that lifted Q3 economic growth. The tidal wave of spending on shimmers and glam began with the Barbie movie, flowed through Beyonce’s Renaissance tour and crashed ashore with Taylor Swift’s Eras tour. But don’t count on that spending boost to prop up the economy much longer; it is simply not sustainable.
The economy grew at a pace of 4.9% in the third quarter fueled by consumer spending, which comprises two-thirds of the U.S. economy. Personal consumption expenditure (PCE), a measure of consumer spending, increased 4% in Q3 after rising just 0.8% in Q2.
Women’s summer spending lifted all boats
While post-COVID pent-up demand for travel and events played a role, women splurging on unforgettable experiences made the summer of 2023 an economic bonanza.
The Barbie movie and female-led concert tours contributed 0.7 percentage points to PCE growth and 0.6 percentage points to GDP in Q3, according to analysts. That translated to billions of dollars in economic activity nationally and locally.
Barbie topped $1.4 billion in global box office sales, grabbing the title for the top movie of 2023 and making history as the first film solely directed by a woman to break the $1 billion mark. Women went all out to see Barbie — curating pink and Barbie doll-inspired outfits such as Cowgirl Barbie, Sporty Barbie and Malibu Barbie; organizing gangs of friends and family to flood theaters and dining out to celebrate the women’s icon.
The appetite for women-themed, women-celebrating and women-led performances continued with two epic tours. Beyonce grossed $579 million as of early October through her Renaissance tour, grabbing the title of the highest-grossing tour by a female artist in history and the seventh-highest-grossing tour overall. T-Swift has since unseated Queen Bey by grossing over $800 million.
Fans shelled out several hundred to thousands of dollars a piece for tickets to these concerts — often buying multiple tickets for friends and family. Add to that spending on glamorous outfits, travel and dining which provided a big lift to local economies. According to the Federal Reserve, May was the strongest month for hotel revenue in Philadelphia since the onset of the pandemic, due to an influx of guests for the Taylor Swift concerts in the city.
Yelp termed it the Beyonce Bump. Search trends the week of July 6-12 leading up to her first U.S. tour stop in Philadelphia were eye-popping: Hotel and Travel searches dominated (+21%), followed by Shopping (+10%) and Beauty Services (+9%). Restaurants enjoyed a 31% increase in diners seated.
Women are financially stressed out
Women justified splurging on once-in-a-lifetime experiences as a chance to relive youthful memories or create new ones, but it may also have delivered many an escape from their day-to-day personal and economic realities. The rising cost of living continues to stress Americans out, especially women.
Nearly one in four (23%) women compared to just 5% of men say financial stress keeps them up at night, according to a Bank of America survey. Over half of women worry they won’t make ends meet due to inflation compared to a third of men. The percentage of women doing well financially hit a five-year low at 35%.
Elevated inflation — driven by massive needless federal spending — caused real wages to fall, leaving workers with a pay cut. Excess pandemic savings have largely been spent down. Women are working multiple jobs to make ends meet at a greater rate than men.
Many women racked up credit card debt to fund their summer splurges, but they are also relying on credit to afford everyday expenses. Credit card debt crossed the $1.03 trillion mark this year, car loan delinquencies hit the highest rate in 27 years and mortgage foreclosures are on the rise.
Freelancing is the solution to women’s financial woes
Women need more ways to generate income, especially flexible opportunities for those who balance priorities such as caregiving and health concerns. In polls, women express the need for greater flexibility in hours and working from home, greater control over their financial future and better work-life balance.
Freelancing through independent contracting delivers all of that even though the tradeoff is not receiving paid benefits. A record 72 million Americans were independent workers last year — nearly half of which were women.
For this reason, the Biden administration should not restrict independent contracting. The Department of Labor is expected to finalize a rule that would make it difficult for workers to retain their independent contractor status. The proposal rescinds a simplified, more favorable multi-factor test adopted by the Trump administration in 2021, and replaces it with a stricter standard that would lead to the reclassification of many independent contractors as employees.
Simultaneously, Democrats in Congress aim to pass the Protecting the Right to Organize Act (PRO Act), a pro-Big Labor bill that would employ an even more rigid ABC test to determine independent contractor status. The PRO Act would all but legislate freelance work out of existence.
The problem with reclassifying independent contractors is that would hike labor costs for businesses by a steep $18 – $61 billion weekly, according to the American Action Forum. Without enough steady work, freelancers simply may not be hired. Meanwhile, flexible freelance opportunities would disappear.
A similar crackdown on freelancing in California in 2019 led to lost businesses and livelihoods for entrepreneurs and small business owners. After Assembly Bill 5 (AB5) was passed, countless professionals and gig workers lost incomes, contracts and opportunities. National reclassification efforts would spread California’s hardship nationwide, and so freelancers are speaking out.
The summer of fun was a one-time economic boost. To spark ongoing economic growth amidst stubbornly high inflation and high interest rates, we must protect flexible work and allow freelancers to remain independent.