The Electric Daily Carnival is a major music festival that takes place every year in a number of cities, originally in the U.S. but not spread to U.K. and Mexico. You may remember an article of mine on EDC, which I wrote back in 2011.There I discussed some qualitative aspects, with my mind on prohibition in particular. I discussed how the market helps mitigate some of the adverse consequences of drug use, while the government tends to do the opposite of help.
Dancing Astronaut has an interesting infographic on with hard data on EDC’s economic impact on Las Vegas. They find that total spending amongst attendees was $158 million, and broken up into more specific categories the distribution of that income looks as follows:
- $52.2 million → Food and beverage
- $29 → Hotel rooms
- $25.6 → Transportation
- $22. 7 → Gaming
- $15.2 → Entertainment
- $13.7 → Retail spending
$20 million eventually became tax revenue. According to the infographic, $131.9 million represents “increased labor income,” which I’m assuming means wages/salary. To put that figure into context, that’s 83.5 percent of total cash flow.
To me this says something about the “labor v. capital” inequality question. Sure, EDC, hospitality, and most of these other industries are labor-intensive. Other sectors of the economy, particularly manufacturing, might see distributions of income between the two factors that are different. But, aren’t we see seeing a structural shift towards the service sector? Aren’t we moving back to a labor-intensive dominant economy? In Capital, Thomas Piketty ascribes human capital to labor. It seems to me, when comparing margins, the return to human capital is quickly growing relative to the return to much of the physical capital the growing service industry uses.