The Growth of the Self-Help Industry: An Economic Examination

In the modern digital age, information has never been as accessible as it was in the past. However, such access can also be a double-edged sword, not only providing us with the ability to gain knowledge with the touch of a button but also making us painfully aware of our own perceived inadequacies. This seems to have given fuel to one particular sector, the self-help industry, which, in recent years, has experienced tremendous growth. This industry focuses on self-improvement in basically all aspects of life and aims to help people achieve their goals ranging from appearing more physically fit to overcoming depression or anxiety. As of 2017, the self-help industry was worth $9.9 billion with a projected average annual growth rate of 5.6%. With the growth of digital platforms, the self-help industry has now become an integral part of mass media: its branches include but are not limited to books, TV shows, websites, and even seminars and smartphone apps. So, what has fueled this industry’s financial success over the last twenty years? The aim of this report is to explore the economic rise of the self-help industry by examining current income inequality as a possible source driving the self-help industry’s demand.

To better understand the enormous demand for the self-help industry’s services, it is important to first explore the current economic climate in the United States. Over the last forty years, the gap between the rich and the poor has widened. Today, it is estimated that the top 10% of the population, in terms of income, owns over 80% of the nation’s wealth. According to a Senate testimony by Melissa Kearney of the Brookings Institute, since 1975, “families in the bottom 20 percent of the income distribution saw their income increase by a mere 3.7 percent while those in the top five percent saw an average income gain of 57 percent.” Much of this began in the 1980s under President Ronald Reagan, who instituted a series of tax cuts and overturned many business regulations. These changes have led to a hollowing out of the middle class with the rich getting wealthier while the poor remain mired in financial difficulties. However, with the growth of technology, people are constantly bombarded with images of wealth. Through the Internet and social media, people see that there is great wealth to be had, and those in the bottom half naturally desire a way up the financial ladder. This has led to the enormous demand for self-improvement, which has, in turn, created a robust market for the growth of the self-help industry.

With this growing market, those with expertise seized the opportunity to monetize the information they had. They saw that there was a large segment of the population that desired professional development with the goal of advancing themselves economically and knew that they could provide those people with the help they desired for a price. Self-help books represent one area that reflects this popularity: this sub-industry is worth $800 million as of 2017 with a 6% projected annual growth rate. For example, the book Mindsight, one that advocates a clinical and scientific approach to self-improvement, is written by Dr. Daniel J. Siegel, a medical doctor and professor at UCLA In the “health” genre, Siegel is the 16th most popular author, and Mindsight is currently ranked in the top 100 books of this genre. App developers have also taken advantage of this opportunity. Self-improvement apps have generated enormous revenue despite being relatively new; the top ten apps in the United States earned about $15 million in 2018’s first quarter alone, and the most popular app in the United States, Calm, has a net worth of $250 million and was named the 2017 Apple App of the Year. The app’s content creator and bestselling author Tamara Levitt’s approach of mindfulness has been implemented by schools, hospitals, companies, and prisons in prior years. In the field of lectures and seminars, the TED Talks also show the self-help industry’s popularity. These short videos have been known to be reliable ways in which people can learn about and improve themselves. The organization behind the TED Talks has hosted many experts giving advice on self-improvement, such as businessman Dan Gilbert and psychologist Shawn Achor. TED’s reliability comes from its policy that “science and health information shared from the stage must be supported by peer-reviewed research.” Indeed, the 25 most popular TED Talks have garnered an average of 26 million likes, enormously contributing to the popularity of the self-help industry.[15] In these cases, the widespread popularity of the self-help industry has been enhanced by the work of experienced, credible people who aim to help others by sharing their expertise and knowledge. This trend shows how the rising demand for self-improvement has fueled the exponential growth of this market as people flock to take advantage of the opportunities this market provides.

Yet, there is also a darker side to the self-help industry’s growth over the past few years. While there are many legitimate sources of information that are meant to help others and take advantage of an economic opportunity, there are also those who wish to prey on the enormous demand for self-improvement. Some people, with the sole desire to exploit this social trend to their benefit, advertise bogus self-improvement programs and products that do no more than waste the consumer’s time and money, sometimes by using the power behind a brand to market useless products. One important example is Trump University, thrown into the spotlight by David Fahrenthold’s 2016 exposé for which he won a Pulitzer Prize. According to Steve Gilpin, a former professor at Trump University, Donald Trump used his reputation as a real estate mogul to draw in students who paid about $1,495 for a “one year apprenticeship” and up to $35,000 for “Gold Elite” classes. Other examples of possible scams include motivational speakers like Tony Robbins and Dave Ramsey, who are both widely popular; as of 2018, Robbins has about 7 million followers on social media, and Ramsey has about five million. In 2016, the total revenue of motivational speakers was $207 million and was projected to grow about 3% a year. Some, however, question the methods and teachings of these speakers. The Motley Fool, a Virginia-based private wealth management company, has found that Dave Ramsey’s advice on retirement planning could leave people economically unprepared for retirement. More recently in 2016, the famed New England Patriots quarterback Tom Brady and his personal chef released a $200 cookbook detailing Brady’s strict diet. The outrageous cost of the book, according to Brady’s website, is justified by its “natural wood [cover],” and “laser-etched TB12 logo and title.” It is Brady’s popularity, though, that has caused many to accept this unreasonable price tag. Although this part of the self-help industry is comprised of people using their fame to market products, the actual benefits of their “advice” are largely questionable. Yet, as more and more of these pseudo-experts join the market, the self-help industry continues to grow at an exponential rate.

Some may argue that the growth of the self-help industry is merely a natural result of the growth of technology. While technology may partially explain the enormous growth of this industry, it is important to also factor in the role income inequality plays in its popularity. The widening of the income gap, along with the advancement of technology, has led people to desire a better life. Seeking improvement through the traditional methods of attaining a degree may not be feasible for those in the bottom half of the income bracket. This demand has created a market for those seeking to capitalize on their talents or knowledge. Add to this those who want to prey on the people who seek help by fooling them out of their money and it is understandable why the self-help industry has been so financially successful over the past few years.

– William Cho (’21)

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