'Tis the season to be jolly. That is, unless you're a worker who was banking on getting a seasonal job and haven't been able to find one this season.
Every year, American retailers hire extra help as the holiday shopping season approaches. In recent years, these jobs have numbered roughly around half a million per season. These seasonal jobs run the gamut. Think temporary cashiers, gift wrappers, sales associates, greeters, merchandisers, warehouse unloaders, delivery drivers.
But the quintessential — and most iconic — seasonal worker has got to be… Santa Claus. In addition to sliding down chimneys to deliver presents on Christmas, Jolly Old Saint Nicholas takes gigs at places like malls, department stores, corporate events, and private parties in the weeks leading up to Dec. 25.
However, this year, Santa may be making fewer trips from the North Pole than in years past. As we report in this week's Planet Money newsletter, demand for professional Santas seems to have cooled. It's one small part of a broader decline in the demand for seasonal workers this holiday season. It got us wondering how the market for Santas fluctuates with the business cycle, which sectors of the Santa market are recession-proof, and whether a decline in Santa demand this season could be a sign that the U.S. economy is going down the chimney.
The Grinch that stole Santa visits
Mitch Allen is the founder and "Head Elf" at Hire Santa, an agency that provides Santas for holiday events around the nation and world (we talked to Allen in a past Planet Money newsletter). Allen estimates there are probably around nine or ten thousand professional or "near professional" Santa Clauses in the United States.
Sure, Allen says, his company may occasionally get requests for Santa at "Christmas in July"-style events, when Santa shows up in a Hawaiian shirt and flip flops. But, no surprise, prime time for his business is right now. He says demand for Santa typically begins in early November, picks up steam on weekends in December and explodes the week before Christmas, especially on Christmas Eve. "It really falls off after Christmas Eve, like midnight Christmas Eve," Allen says.
Allen says he's seeing less demand for Santa visits this season. His leading indicator for Santa demand is what he calls "leads," or inquiries to his business to book Santa at events. On that metric, he says, "we're down almost 27% year to date, compared with last year. And last year was down compared with the year before."
My family has experienced this decline in Santa appearances first hand. Last year, when our son was about 15 months old, we took him for his first time to sit on Santa's lap. A hotel in Lake Tahoe had a public event that served as a toy drive for Toys for Tots. There was festive music, ice skating, skiing, hot chocolate, sleigh rides, and, of course, Santa. To be honest, our son was too young to understand why we were putting him on an old, bearded man's lap, but the whole experience was fun for us parents and we got cute pictures. We wanted to go back this year, but the hotel decided not to host its community event this year. No Santa. Bah, humbug!
Candles in a blackout of official economic statistics
We're living through a weird economic moment right now, with mixed signals about how good or bad the economy is doing. And we just had the longest government shutdown in American history, which not only hurt the economy, but basically created a blackout for official economic statistics. Since the end of the shutdown, the Trump administration has delayed and even canceled some economic reports, and we're now all sort of in the dark, trying to figure out what the heck the economy really looks like right now.
But there are some candles illuminating what's going on — and this seeming decline of demand for Santa could be one small one suggesting that the overall economy is sleighing downward. It's part of a broader decline in the demand for seasonal workers this year, something a number of sources have reported in recent weeks. For instance, back in late September, Challenger, Gray, & Christmas, a human-resources firm, released their annual seasonal hiring report. They projected that hiring this holiday retail season would "fall to its lowest point since the recession-hit season of 2009."
Part of the story could be that holiday shopping is increasingly moving online, and brick-and-mortar retailers are struggling and maybe hiring less help. That's an ongoing, long-term structural change to the economy that doesn't say much about whether we're heading into recession. However, there are a number of signs that softened demand for seasonal workers is related more to a broader slowdown in the economy.
Andrew Challenger, a senior vice president at Challenger, Gray, & Christmas, told us we haven't seen a miraculous turnaround in the market for seasonal workers since they issued their projection back in late September. Even more, he says, the broader labor market seems to have only gotten worse since they made their projection. In November, his company, which also tracks layoffs, reported an alarming spike in companies announcing layoffs. That includes prominent online retailers like Amazon and delivery companies like UPS. "So we have two signals, and both are not good for the labor market or seasonal hiring," Challenger says.
Likewise, Indeed Hiring Lab, which leverages the job site Indeed's large amount of data to provide insights about the labor market, recently reported they're also seeing bad news in the job market this season.
"What we're seeing right now in seasonal hiring is kind of a microcosm of what we're seeing in the broader labor market, which is that things are cooling down, things are slowing down," says Cory Stahle, a senior economist at Indeed Hiring Lab.
Is Santa recession-proof?
The National Bureau of Economic Research, the official body that calls recessions, defines a recession as "a significant decline in economic activity that is spread across the economy and lasts more than a few months" (listen to our Planet Money episode, "Recession Referees," for more about this). The lack of official economic statistics for the last few months makes it hard to say whether we're on our way to a recession — or whether we're already in one.
But, while reporting this story, we've found ourselves wondering: could declining demand for Santa visits during the holidays potentially be a recession indicator? Like, can it be a sign we're in a ho-ho-horrible economy? Do paid Santa appearances boom in good economic times and go bust during recessions? Or is demand for Santa fairly recession-proof?
Hire Santa didn't officially launch until 2012 — after the Great Recession — and Head Elf Allen couldn't tell us much about the hard data on how Santa demand fluctuates over the business cycle. Moreover, his business doesn't capture the full market for Santa, including DIY Santas where people buy or rent Santa costumes and do events themselves. But Allen did offer us a theory of how he thinks demand for professional Santas is affected by recessions.
For one, he says, there will always be parts of the economy where demand for Santa is fairly recession-proof. He says that many businesses use Santa appearances to "help drive traffic and associate their brand with Christmas." In this way, a store or mall paying for Santa to sit in a chair and converse with children could be seen as a kind of loss leader, a product or service that costs a company money as a way to attract more customers, nudge them to shop, and help their business make more money. Think like free or cheap alcohol at a casino. Allen says that, even in recessions, certain types of businesses and organizations will always want to hire Santa.
"But I don't think that translates to a company party or a home visit," Allen says. "That's not something that you have to have. You can go to the mall and see Santa. You can go to outdoor stores and see Santa. You can see Santa if you want to. You don't have to have 'em come to your home or office."
Indeed, that's a pattern that Allen believes he's seeing with a cursory look at his company's data. He believes the primary driver of the decline of demand for paid Santa visits is from private holiday parties and events.
"Consumers are not reaching out to have Santa or Mrs. Claus or other holiday entertainers come to their home or office for a Christmas party," Allen says. "And so I view that as like people scaling back their own Christmas plans. They may still be having parties but they're not having sort of blowout parties with Santa and other holiday characters there." Allen pointed to recent reports that companies are laying off workers and that consumer credit card debt is at an all time high. It makes sense why people might be scaling back.
So, yeah, maybe a big decline in Santa appearances could be a recession indicator.
The good news, Allen says, is that, while overall demand is down, he's still seeing plenty of requests for Santa.
In other words, don't worry, Santa is coming to town. There just might be fewer places or times to see him this year.
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