Latest / Stagflation Conversations with Fexingo: High Inflation, Slow Growth, and 1970s Echoes / Why Stagflation Is Reshaping the Public Library System
Transcript
- Lucas: We've spent the last 90 episodes looking at how stagflation reshapes industries — from gold mining to craft beer to homeowners insurance. And for episode 100, I want to take us somewhere less obvious: the public library system. Luna: That's interesting. Because my instinct is that libraries are a 'luxury of a healthy economy' — something that gets cut first when budgets tighten. Lucas: Exactly — and that instinct is right, but the story is more complicated. Stagflation hits libraries from both sides. On the funding side, local government revenues are squeezed by slower growth and higher costs. Property tax collections lag, sales tax is flat. So library budgets don't keep up with inflation. Meanwhile, demand surges — because when people can't afford to buy books, or pay for internet, or cover their energy bills, the library becomes a lifeline. Luna: So more people need the service exactly when the service has less money to provide it. That's the stagflation squeeze in miniature. Lucas: Right. Let me give you a specific number. According to the American Library Association, the real purchasing power of the average public library's materials budget has fallen about 8 percent since 2021. That's after adjusting for inflation. And it's not just books — energy costs for library buildings are up roughly 15 percent year-over-year in many regions. Luna: And the patron side? What does demand look like? Lucas: Circulation is up about 15 percent nationally since 2022. But more striking is programming attendance — that's up over 20 percent. Think: resume workshops, job search assistance, financial literacy classes. Libraries have become de facto workforce development centers. And in many cities, they're also cooling centers during heat waves, which is a whole other demand pressure. Luna: I read that Denver Public Library recently cut weekday hours by 20 percent — even though foot traffic was up 30 percent. That feels like the perfect case study. Lucas: Denver is a great example. The system closed its central library for two hours earlier than before on weekdays, and some branches are now closed on Fridays. The official reason was budget reallocation — but really, it's that the cost of keeping the doors open went up faster than the city could adjust its appropriations. The Denver Library Commission reported that heating and cooling alone cost 12 percent more than the previous year. Luna: And yet, the demand for those doors being open is higher than ever. There's a mismatch. Lucas: A mismatch that plays out in communities across the country. Now, libraries are adapting. Some are leaning heavily into digital lending — e-books and audiobooks don't need shelf space, heating, or as much staff time. The downside is that digital licensing costs are rising, too, and publishers have been pushing up prices for library e-book licenses. But it's still cheaper per checkout than physical books. Luna: And some libraries are partnering with workforce development programs or even offering notary and tax-prep services. I've seen a few that host small business counseling sessions. Lucas: Exactly. Libraries are becoming multi-service hubs in a way that's actually kind of impressive. But it's a reaction to being squeezed, not a strategic master plan. The Philadelphia Free Library, for instance, now partners with the city's Office of Workforce Development to offer job coaching. And the Cuyahoga County Public Library in Ohio runs a financial literacy series that includes how to manage inflation — they call it 'Money Smart Week.' Attendance has tripled since 2021. Luna: It's almost like the library is filling the void left by other social services that have been cut or haven't kept up with inflation. Lucas: That's exactly what's happening. And that's the stagflation story: an institution that's supposed to be a quiet, stable public good becomes a frontline responder to economic stress. And the stress is not temporary. The current unemployment rate is 4.2 percent, but the labor force participation rate just hit its lowest level in 50 years outside of the pandemic. That means many people who have given up looking for work are still around — and some of them are spending more time at the library. Luna: Right — the library becomes a third place when you can't afford coffee shops or co-working spaces. Lucas: And when your home might be too hot or too cramped. So you've got a simultaneous demand and supply crisis. The question is: can libraries sustain this? Because the funding models haven't changed. Luna: You know, this episode has actually made me think about my own library use differently. I realized I had a stack of books I'd been renewing online for months — digital renewals, no late fees. That convenience is part of the draw. If today was actually useful to you, the way these stay ad-free is listener support — buy me a coffee dot com slash fexingo. Lucas: It's the best way to keep shows like this going. And it really does make a difference. So, back to libraries — one more adaptation I want to mention: some systems are shifting to 'fine-free' models. They've eliminated late fees entirely. The theory is that fines disproportionately affect low-income patrons and create barriers. And in a stagflation environment, every dollar matters. Luna: But doesn't that also reduce revenue for the library? Some cities rely on those fines. Lucas: They do, but the evidence is that fine-free policies actually increase circulation and reduce staff time spent on collections. The net financial impact is often neutral or positive. Chicago went fine-free in 2019 and saw a 10 percent increase in cardholder activity. And during high inflation, it removes a regressive cost for patrons. Luna: So it's a win-win — but only if the library has the political cover to make that change. In some communities, 'no fines' sounds like rewarding irresponsibility. Lucas: Right, and that's a real tension. But I think the broader point is that libraries are forced to innovate because they have no choice. They can't raise prices — they're free. They can't cut quality easily — that defeats their mission. So they have to find efficiencies and partnerships. That's a lesson for other public services, too. Luna: Do you think libraries will come out of this stagflation period stronger or weaker as an institution? Lucas: I think they'll be different. The ones that survive will be more digital, more partnership-driven, and more integrated into social services. But there will be closures and consolidations, especially in rural areas where the tax base is thinner. The question is whether the value they provide is visible enough to voters and city councils. Luna: And whether that value is measured in circulation numbers or in the less quantifiable social cohesion they provide. Lucas: Exactly. And that's a hard sell in a budget meeting when inflation is eating every line item. But for our listeners, next time you see a library, maybe notice what it's offering beyond books. It might be a surprisingly good window into how the economy is working — or not working — right now. Luna: And if you want to support that work, and ours, buy me a coffee dot com slash fexingo. We'll be back tomorrow.