05.26
If you think your respective college town was suffering because of the economy these last two semesters, just wait till you get back to campus in the fall. I would say most college students make most of their spending money for the school year during the summer.
The economic environment was not as bad last summer as it will be in the next three months. Sure gas prices were through the roof last summer, but college students were able to make a significant amount of money. As the school year progressed, the economic environment began to suffer; those students who received money from their parents were no longer receiving as much and that is what caused college towns to “suffer.”
Although the economy is appearing to get better (or at least stock prices are rising, but that’s an issue for another post), retail and spending is still significantly down year over year.
Where do most college students work over the summer? They work in retail, they work at beach clubs, they work in temporary positions that only exist during the summer because that is where consumers spend their money. People are not spending their money so there are less available positions. On top of that, some of the newly unemployed will be competing with college students for these positions. Increased labor supply with a decreased demand is only going to depress wages for the summer, meaning students are going to have less disposable income to spend during the coming school year. If students don’t have the money to spend, college towns will really be suffering in the fall.
This is a trend that I have observed among my friends. They are trying to find summer jobs in retail, but are unable to do so because there are more applicants for less positions. If I owned a business in a college town frequented by students, I would get out as soon as possible or figure out how to cut costs because the winners are going to be those who bring down their prices to accommodate for less spending money.
@JaredKastriner