Latest / Wages and Prices with Fexingo: Cost of Living, Pay Raises, and Workers' Purchasing Power / How Your Raise Is Finally Beating the Cost of a Gym Membership
Transcript
- Lucas: So Luna, I want to talk about something that hits a lot of us right in the wallet — or maybe right in the bicep — and that's the cost of a gym membership. Luna: Are we talking about the ten dollar a month Planet Fitness type, or the fancy boutique studio where a single class costs more than a week of groceries? Lucas: Both, actually. Because the latest data shows that for the first time in a long while, wage growth is outpacing the price of getting fit. And it's not just one kind of gym — the trend is showing up across the board. Luna: Well that's a nice change of pace. We've spent the last twenty episodes watching raises finally beat everything from rent to streaming services. I didn't expect gym memberships to be next. Lucas: Right. But the numbers are pretty clear. Let's look at the big picture first. Average hourly earnings for private workers hit $37.60 as of June, according to the Bureau of Labor Statistics. That's up from $37.51 in May. Not a huge month-over-month jump, but year-over-year, wages are growing at about 4.1 percent. Luna: And on the inflation side, core PCE — the Fed's favorite measure — is running at about 2.2 percent annually. So real wages are growing by nearly two percentage points. Lucas: Exactly. And that's before we even look at what's happening with gym prices. The consumer price index for 'recreation services' — which includes gym memberships and fitness classes — has been rising at about 2.5 percent annually. So wages are growing faster than the cost of sweating, on average. Luna: But the average hides a lot. I remember when Planet Fitness raised its classic card from $10 to $10.99 a month back in 2019. That was a ten percent hike overnight. Have they raised it again since? Lucas: They did bump it again, but more modestly. The classic card is now $15 a month in many locations, but they've also added a premium tier at $24.99. Still, $15 a month is $180 a year. Compare that to a 2019 price of about $120 a year — that's a 50 percent increase over seven years. But wages over that same period have grown about 28 percent. So the gap has widened, but recently wages are catching up. Luna: So the raise is finally beating the price, but only after years of getting left behind. It's not a huge victory — it's more like a catch-up. Lucas: That's a fair way to put it. And the boutique segment is a different story. Take Barry's Bootcamp — a single class in New York or LA can run you $38 to $42 now. That's up from about $35 in 2021. So a 10 to 15 percent increase over five years, while wages in those cities have grown closer to 20 percent. So actually, the boutique studios have been raising prices slower than the big-box chains. Luna: Interesting. So my raise is doing better against a fancy spin class than against Planet Fitness. That seems backwards. Lucas: It does, but it makes sense if you think about the customer base. Boutique studios cater to higher-income clients, so they have less pricing power — if they raise prices too much, people just go elsewhere. Planet Fitness, on the other hand, targets the budget-conscious, and they've been able to push through increases because their starting point was so low. Luna: And this is where the broader labor market comes in. The June jobs report was pretty weak — only 57,000 new jobs, and the unemployment rate ticked up to 4.2 percent. That's not great for wage growth going forward. Lucas: Yeah, that's the catch. Wages are rising now partly because the labor market was extremely tight through 2022 and 2023. But with job creation slowing, that wage growth may moderate. The labor force participation rate also fell to its lowest in 50 years outside of COVID — that could mean fewer people are even looking for work, which could keep wage pressure up in certain sectors. Luna: So the question is whether this gym membership victory is fleeting. If the economy slows, gym memberships are often one of the first things people cut. That could actually force gyms to keep prices low. Lucas: Let's not get ahead of ourselves. For now, the data says your 2026 raise is beating the cost of getting fit. But there's a bigger picture here — and that bigger picture is that listeners like you are the reason we can dig into these numbers without any ads or sponsors. Luna: It's true. A small but loyal group of listeners keeps this show going through buy me a coffee dot com slash fexingo. And we don't take that for granted — it literally funds our ability to produce episodes like this one. Lucas: We don't run ads, we don't sell your data, we just try to make sense of the economy. So if you've found value in these episodes, that's the way to keep it going. And now, back to the gym floor — or maybe the yoga mat. Luna: Speaking of which, I want to look at one more segment: the mid-tier gyms like LA Fitness or 24 Hour Fitness. Their monthly dues have stayed pretty flat, around $30 to $40, for years. But they've added lots of hidden fees — initiation, annual maintenance, towel service. Lucas: Great point. The headline price might not move much, but the total cost of membership can creep up. That's what the CPI measures — the actual outlay. And that total cost has been rising about 2 percent annually, which is still below wage growth. Luna: So across the board — budget, mid-tier, boutique — your raise is finally beating the cost of getting and staying fit. It's a small win, but in a world where everything seems to cost more, it's worth celebrating. Lucas: Absolutely. And it's a reminder that not all inflation is created equal. Some categories — like gym memberships — are actually becoming more affordable in real terms. That's the kind of nuance we try to bring every episode. Luna: Alright, next episode we'll tackle another cost that might finally be in your rearview mirror. Stay tuned.