4 reasons why 'funflation' is happening

One of the basic rules of economics is that as the cost of living goes up, discretionary spending goes down.

In recent years, Canadians have been paying more and more for food and housing while real wages have remained relatively stagnant, and our current GDP slowdown has raised fears of a recession. But while you'd think these conditions would inspire Canadians to tighten their purse strings and forego leisure activities, the numbers tell a different story.

Data from the Bank of America suggests that people across North America are actually spending more on concert tickets relative to their income than ever before – a trend that's been dubbed "funflation."

To help us understand why someone might put off buying groceries in order to nab Olivia Rodrigo tickets, Commotion's Elamin Abdelmahmoud spoke with Metro Morning business columnist Mark Harrison, the founder of the MH3 Collective and Black Talent Initiative, and Commotion's own digital producer Amelia Eqbal, whose hearty concert-going habit makes her the self-described poster girl for the funflation phenomenon, about some of the potential reasons behind this trend.

LISTEN | Today's episode on YouTube:

1. It's a natural response to existential dread

Mark: "Young people – Gen Z, millennials – are making a choice that says, 'We are going to enjoy life. We are upset with where the world's going.' We're burning this planet down. We've got corporate greed. We've got politicians that can't agree. So young folks are like, 'You know what? This is my escape.' And the numbers are really interesting, because people aren't buying TVs or blenders; retail stores are not selling furniture for apartments. The choice is being made for experiences over things."

2. Concerts provide a sacred experience that's priceless

Amelia: "There's something so beautiful about being in the room with someone who makes art that you love and just seeing them shine. And I've also made friends at concerts this year from being on the lawn. The community aspect is really beautiful. I don't get that from a movie. I don't even get that when I go to a sports game. I've noticed a really interesting energy at concerts [this year] more than I have at other ones that I've been to pre-pandemic. It's been kind of holy. When I went to Hozier, there was a moment where he was singing Cherry Wine, and the whole crowd was just quietly singing to themselves. It was like this beautiful, quiet choir. It was amazing. You can't replicate that."

Mark: "Those experiences are disruption-proof. It's not like when you're at home watching TV or streaming and you've got four screens going, or you're at a game and the annoying person in front of you is talking all game."

3. The post-pandemic effect is greater than a potential recession

Harrison: "At the risk of offending everybody who works here, there is no recession coming. The media has been talking about a recession, but we are not in a recession. We have inflation. That's true. And we have solid employment numbers. Really, the telling statistic to look at will be personal savings. People accumulated a lot of personal savings during the pandemic because you couldn't travel, you didn't buy new outfits, you weren't eating out, you weren't doing all this stuff. And so when those personal savings start to dwindle, then you might see an impact. But right now, all the data points to this incredible demand. Live music is on fire everywhere. Taylor Swift and Beyoncé contributed $5.3 billion to the U.S. economy this year! We've got a mental-health tsunami upon us [post-pandemic] and I think especially for young people, concerts give them that [special] moment. And it's not just the actual concert – millennials and Gen Zs are buying the outfit, like, 'what am I going to wear to the Taylor Swift show?' So the economics are unbelievable."

4. Concerts are a long-term investment in your soul 

Amelia: "I don't have a car to pay for. I don't have a mortgage. I don't go to the gym; I don't have a membership I'm wasting. So [going to concerts] is just what I do for myself, for fun. The memories I've made with my friends and my family going to these concerts are ones that I know I will be holding onto. I was in my early twenties when [the pandemic] started. I came out a 24-25 year old. And so I guess I'm kind of making up for lost time here, and I don't regret that decision."

Mark: "In 10 years, nobody is going to say, 'Remember that drive we had in your Nissan Rogue?'. Right?"

You can listen to the full discussion from today's show on CBC Listen or on our podcast, Commotion with Elamin Abdelmahmoud, available wherever you get your podcasts.

Panel produced by Jess Low.