Expert Commentary

Is tourism a low-income industry? Evidence from three coastal regions

2011 study by Clemson and Michigan State University on how revenue generated by tourism is distributed across different income groups.

Tourism is often promoted as an effective economic development strategy by regional planners and politicians in the United States. Among the potential benefits cited are job creation and tourism’s ability to create a positive public image for a region. Critics argue that tourism is not a panacea, but instead creates jobs that are low paying, offer few benefits, and are only part-time or seasonal work.

A 2011 study in the Journal of Travel Research, “Is Tourism a Low-Income Industry? Evidence from Three Coastal Regions,” analyzed how income generated by tourism is distributed across different income groups.  The researchers, based at Clemson and Michigan State University, used survey data of visitors and labor statistics from the tourism-dependent South Carolina areas of Myrtle Beach, Charleston and Beaufort-Hilton Head Island for their analysis.

The study’s findings include:

  • Income from employment in the tourist industry was distributed primarily to those in lower-income brackets.
  • Comparing the “income distribution from tourism-generated jobs to the overall distribution of income suggests that tourism provided more jobs with low wages than the overall economy of the regions.”
  • In Charleston and Myrtle Beach, half of the jobs in the tourism industry provided annual incomes of less than $20,000.

The authors note that the study’s assumption of full-time employment likely causes it to overestimate the earnings of tourism workers. The researchers further cautions against extrapolating results to tourism in developing countries, where employment in the sector “may actually require relatively high levels of education and be high paying.”

Tags: tourism