The Economic Impact of the Creative Arts Industries: New York and Los Angeles

By Dolfman, Michael L.; Holden, Richard J. et al. | Monthly Labor Review, October 2007 | Go to article overview

The Economic Impact of the Creative Arts Industries: New York and Los Angeles


Dolfman, Michael L., Holden, Richard J., Wasser, Solidelle Fortier, Monthly Labor Review


Data from the BLS Quarterly Census of Employment and Wages provide afresh perspective on the impact and value of the creative arts to the economies of New York and Los Angeles; one of every 4 creative arts industry jobs in the Nation operated out of either of those locales in 2006.

Two U.S. counties-New York and Los Angeles (1)--have become image-producing, critical forces that provide high visibility and a global reach for American cultural values. By clustering arts, entertainment, and cultural organizations, these two regions have developed into major strategic sites that consolidate vast concentrations of creative resources. The result is an infrastructure that has secured for them--and, by extension, the United States--a dominant place on the global cultural scene. These arts, entertainment, and cultural organizations form the core of three sectors whose inter-relationships with each other magnify their impacts. Awareness of these synergies has led many, to associate New York and Los Angeles "with a distinctive aura and mystique in the form of certain impressions, personae, memories, styles, [and] trends." (2) Although each of the two counties is located within its own distinct geographic boundaries, the reach of the cultural output of both New York and Los Angeles has global implications. National and international views of American cultural patterns are often formed on the basis of individual impressions of New York or Los Angeles as places, through the presentation of those impressions in artistic, entertainment, and cultural venues. (3)

This article presents a critical examination of the arts, entertainment, and cultural industries as industries within the economies of both New York and Los Angeles. It does not address the much-debated artistic merit of these industries, nor does it focus on the field of "cultural economics." (4) Instead, it examines the labor market scope (that is, employment and wages) of these creative arts industries, demonstrating that they are rooted in the same production processes that characterize all American industry. However, it is also important to note that these cultural industries, besides generating goods and services, produce creative intellectual content that may not be as readily quantified or measured. Cultural products can directly, articulate attitudes, opinions, ideas, values, and creativity--essential inputs into the creative industries, although they, cannot be transformed into commerce without the aid of other inputs that respond to ordinary economic incentives. (5)

The article uses the lens of employment and wage data for the years 1990 and 2006, (6) drawn from the Bureau of Labor Statistics (BLS) Quarterly Census of Employment and Wages (QCEW) program database, to analyze the economic impact of these cultural products as industries within New York and Los Angeles, and as basic export industries beyond their geographic borders.

Some 27 detailed industry, classifications have been selected as meeting the criteria for cultural output industries inspired by the creative arts. Their significance to the economies of New York and Los Angeles is supported by the fact that their aggregate first-quarter, 2006, location quotients were 6.34 for New York and 4.92 for Los Angeles, with a combined value of 5.4. (7) (See table 1; location quotients are useful statistical measures that compare the proportion of a region's workforce employed in a specific industry with that industry's employment concentration nationwide. Location quotients greater than 1.0 demonstrate a greater concentration of workers than would be required to meet local needs.)

There are important differences between the two counties. On the one hand, the dominance of the motion picture industry in Los Angeles relates to the history of the cinema. The industry was established there in the 1920s as a crass production industry not unrelated to other ones of that era. On the other hand, New York inherits its cultural orientation from its traditional role as a leading global financial services metropolis. …

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