Latest / Wages and Prices with Fexingo: Cost of Living, Pay Raises, and Workers' Purchasing Power / Why Your Raise Is Finally Beating the Cost of a Movie Ticket
Transcript
- Lucas: So Luna, I was looking at the latest CPI release from July, and one line item caught my eye: movie tickets. They're up just one point four percent over the past twelve months, while average hourly earnings are up about three point two percent. That means your raise is beating the cost of a night at the movies, and not by a little. Luna: That's a fun one. But is that just because nobody goes to the movies anymore? Or is something else going on? Lucas: Both, actually. The pandemic really reset the baseline. But even after the rebound, ticket prices have been remarkably sticky. A big reason is the shift to Premium Large Format screens – IMAX, Dolby, those fancy recliner seats – and the surcharge that comes with them. Theaters have been competing on experience, not just price. Luna: Right, so they're upselling you on the plush seats and the giant screen, but the standard ticket stays cheap, which keeps the average down. Lucas: Exactly. And you've also got the subscription model that's been creeping back in. MoviePass made a comeback, and AMC has its own Stubs A-List program. Those are effectively capping the marginal cost of a ticket for a subset of regulars, which puts pressure on the average price that the CPI tracks. Luna: So when I see that a standard ticket in my town is twelve bucks, that's kind of the ceiling now, not the average? Lucas: Yeah, for many markets. The national average is around ten dollars and fifty cents, but that includes matinees, discount days, and kids' shows. The point is, wages have been climbing faster than that average for the last couple of years, and that's a real change from the pre-pandemic era when ticket prices were running ahead of earnings. Luna: Let's put a number on it. If you went to the movies once a month, how much more purchasing power do you have now versus, say, 2019? Lucas: Well, if we use the median weekly earnings – that's about twelve hundred and four dollars as of the start of 2025 – and we compare that to the CPI for movie tickets, the cost of a monthly ticket has gone from roughly one point one percent of weekly earnings in 2019 to about zero point eight percent now. So you're saving about three dollars a month in purchasing power, which doesn't sound huge, but across a year, it's enough to buy a large popcorn and a soda. Luna: That's a tangible win. But is this just a temporary thing? I mean, the Fed's preferred inflation gauge, core PCE, is still running at three point three percent annually. That's above their target, and there's a Fed governor saying they need to raise rates again. Lucas: Right, the headline of that is Hammack saying 'now is the time to act.' So the overall inflation picture is still sticky. But that's exactly why this episode is interesting: it's a pocket where real wages are improving. If you're a worker, your raise is beating the cost of a movie ticket, even if it's not beating everything. Luna: So what's driving that? I get the PLF shift, but movie attendance is still below pre-pandemic levels. Does that keep prices down from a demand perspective? Lucas: Partly. Theaters are still trying to lure people back, so they're keeping base prices low. But the bigger structural force is streaming. The window between theatrical release and when you can watch at home has shrunk from ninety days to about forty-five. That puts a cap on how much theaters can raise prices without losing people to the couch. Luna: So the streaming competition is actually helping your wallet at the multiplex. Lucas: It's a real factor. And you see it in the data: the CPI for movie tickets has been running below overall inflation for three years straight. That's a longer trend, not just a one-month blip. Luna: But wait, what about those surcharges? If you're seeing the new blockbuster in IMAX, you're paying eighteen dollars, not ten. Doesn't that skew the experience? Lucas: It does, but the CPI averages all tickets, including the cheaper matinee and the premium ones. And the premium format is still a small slice of overall tickets sold. So the average stays low, which is good for the typical consumer who just wants to see a movie in standard format on a Tuesday night. Luna: I'm thinking about the regional differences, too. In New York or LA, a ticket is easily fifteen to twenty bucks. Does the national average really reflect anything? Lucas: It does, but the national average is exactly that – an average. If you live in a high-cost city, your movie ticket is probably going up faster. But for most of the country, the trend holds. And that's what we care about when we talk about purchasing power: the typical worker in a typical city. Luna: So, bottom line: your raise is finally beating the cost of a movie ticket. But is that just because movies are cheap, or are raises actually that good right now? Lucas: Both, honestly. Average hourly earnings are up three point two percent from a year ago, and that's above the overall CPI, which is running at about two point nine percent. So real wages are positive. But the movie ticket is one of the few categories where the gap is as wide as it is. Luna: And that's a nice feeling, isn't it? To go to the movies and not feel like you're being gouged. Lucas: Absolutely. And speaking of something that's worth it, if walking through the economy with us has made something click for you, the best way to keep this show ad-free is a small coffee at buy me a coffee dot com slash fexingo. It's the smallest ask, and it genuinely helps us keep doing the research. Luna: Yeah, every little bit counts and we don't run ads, so listener support is what keeps this going. Lucas: Now, back to that gap. One thing to keep an eye on is whether this trend reverses if we do get another rate hike. If Hammack and others get their way, that could slow hiring and wage growth, and then the movie ticket might start outpacing raises again. Luna: So it's kind of a fragile win, then. Lucas: It is, but for now, it's a real one. And it's a nice reminder that not every part of the economy is squeezing you. Sometimes, the price of a little escapism is the one thing that's actually keeping pace. Luna: Well, that's a good note to end on. I'm ready to go catch a matinee.