Economics in the News – Aug. 28 – Sept. 3, 2023
Economics impacts our lives every day. Below are some of the top storylines from this past week related to economics.
o With a new college football season underway and the US Open in full swing, a feud between Charter Communications and the Walt Disney Company – the owners of ESPN – left fans in the dark to watch their favorite teams and stars. Media companies, such as Disney, generally want to charge more for their content, while cable companies, such as Charter, are trying to minimize costs during a time many of their subscribers are opting for alternatives.
Several channels, including ESPN and FX, went dark for the 15 million people who subscribe to Charter’s Spectrum service. The channels will remain shut off until a an agreement is reached. With alternatives such as YouTube TV, Sling, and other streaming services, Charter risks that upset customers will cancel their subscriptions and move to permanent alternatives. [The New York Times]
o Students are back to school and colleges are wrestling with the rise of artificial intelligence (AI) chatbots such as ChatGPT and its role in the college admissions process. The chatbots could facilitate plagiarism on college applications or it could help students become better writers and give greater access for writing help. After the Supreme Court ruled in June that race-based university admissions programs were illegal, some colleges and universities had hoped to rely increasingly on the essays facilitated to learn of an applicant’s upbringing, identities, and communities, in order to foster diversity on campus.
But new AI tools threaten to minimize the college essays into generic essays instead of the highly individualized writings that college admissions personnel are seeking. Experts are also warning that the use of the AI chatbots could hinder students from developing important critical thinking and storytelling skills. Others see the benefits of the chatbots, such as helping students brainstorm, draft and edit their college admissions essays. That would allow greater access to writing assistance to those who are unable to afford resources such as tutors, writing coaches, and other tools. [The New York Times]
o New manufacturing strategies along with geopolitical tensions and China’s lagging economic growth are casting clouds over the West Coast ports that have long been critical to the United States trade economy. Ports in the Gulf Coast and East Coast have been gaining market share, as retailers look to spread their supply chains to be less reliant on a single gateway. West Coast ports handle 35 percent of all US containerized import cargo as measured by weight, down from 37 percent from June of last year.
The West Coast has been preferred over the years for supplies manufactured in Asia because it provides the quickest route from factory to port. A network of warehouses, trucks, and railroad operations distribute goods across the country. However, the West Coast ports have slowly been losing market share for the last 20 years, with the timeline accelerated during the COVID-19 pandemic due to the backups and delays at the ports. In addition, port activity has slowed because of fears of labor disruptions, but members of the International Longshore and Warehouse Union recently ratified a six-year contract for dockworkers at West Coast ports. [The Wall Street Journal]
o The rise of pickleball – the fastest-growing sport in the United States – has been a boom for sports apparel businesses. Stores are stocking inventory on pickleball shoes, while increasing their shelf space for paddles, balls and other pickleball merchandise. Pickleball participation surged 85.7 percent in 2022, which marks a 158.6 percent increase over the last three years.
Tennis apparel, which encompasses pickleball as well, has increased 41 percent since 2020, topping $340 million in June year-over-year. While tennis and pickleball apparel crossover, some brands, such as Bandier, are building out their own pickleball lines. Franklin Sports is developing a clothing line with larger pockets to better accommodate a pickleball, which is larger than a standard tennis ball. Meanwhile, tennis shoes have seen a 12 percent year-over-year increase ending in June, earning revenues of $44 million. [The Washington Post]
o In the aftermath of the wildfires that devastated the Hawaiian island Maui, residents and local officials are begging for the return of tourists. In the immediate aftermath of the wildfires, government officials urged tourists to flee the island for their safety. Trips were canceled and flights were suspended. Some airlines are still warning travelers against nonessential travel to Maui.
However, state and tourism officials are begging for the return of tourists, who are vital for the island’s economy. Last year, tourists spent $5.5 billion on Maui, as nearly three million visitors vacation on the island each year. Some locals remain conflicted as Lahaina remains devastated from the damage caused by the fires, but the Hawaiian Tourism Authority estimates that Hawaii is losing $1 million per day since Aug. 8. [NPR]