By Guest Blogger, Michaela Markels
Every day you waste roughly 5 hours on social media. But don’t worry; you’re not the only one. And with online media indulgence spreading, our economy is being affected.
Students today should actually have more leisure time than previous generations. Compared to a decade ago, high schoolers currently spend fewer hours on homework while their involvement in extracurriculars has remained steady. At the same time, 12th graders are at home as much as 8th graders were in 2009. How is this extra time being spent? On social media. The surplus hours once dedicated to homework, after school activities, paid work experience, and sleep no longer serve as productive time being invested in future human capital.
Kids are not the only ones wasting more time. Remember the hours that flew by after checking your phone with the intention of responding to one text, or the time spent watching videos that you would never look for yourself? The TeamLease World of Work Report estimates that an “average of 2.35 hours are spent accessing social media at work every day” by adults.
None of this is by accident.
It has to do with the way companies make money from advertisements. Through the undivided attention of millions of people everyday, social media has become a powerful asset. Facebook’s “boost” option allows businesses to pay to get a certain amount of people to see an ad each day. As Facebook puts it, these are “people you choose through targeting” to see your products. The more money a business pays, the more attention their products receive. This means Facebook’s profits are directly correlated to the amount of time people spend online. Because social media companies are competing for our attention, they make their websites as addictive as possible without much thought to the societal impact of doing so.
Our Bottom Line: Market Failure
All in all, roughly 13% of total productivity is said to be lost because of social media overuse (or addiction). Imagine all of the new music that could be created, businesses expanded, customer needs better met, if this percentage were lower.
This takes us to the economic idea of market failure, which is a situation in which externalities are not reflected in the equilibrium price. Smoking was the troubling market failure of the previous generation. Though the price of cigarettes was low, the social health costs were high.
In the case of social media, the market has failed to allocate the right amount of time for users to spend online. By not allowing productivity to reach its full potential, social media companies are working against the goals and well-being of society.
More specifically, the economy pays a hidden cost.