Art Market

Arts Sector Contributed $763.6 Billion to U.S. Economy—More Than Agriculture or Transportation, New Data Shows

Isaac Kaplan
Mar 8, 2018 10:49PM
Oscar Lakeman
Containers #606, 2012

The arts and cultural sector contributed over $763.6 billion to the American economy in 2015—more than the agriculture, transportation, or warehousing sectors, according to new U.S. government data released Tuesday by the Bureau of Economic Analysis (BEA) and the National Endowment for the Arts (NEA).

The arts generated 4.2% of the overall U.S. GDP, with roughly 4.9 million Americans working in the sector in 2015, the latest year for which data is available. Collectively, those employed in the sector earned over $370 billion, according to the findings.

The sector expanded by an average of 2.6% annually between 2012 and 2015, just outpacing the 2.4% growth of the economy overall, according to the report. Between 2014 and 2015, the sector grew at a rate of 4.9% after adjusting for inflation.

“The data confirm that the arts play a meaningful role in our daily lives, including through the jobs we have, the products we purchase, and the experiences we share,” said NEA chairman Jane Chu in a statement.

The economic impact analysis comes as the NEA is facing severe cuts under U.S. President Donald Trump’s proposed budget, and one year after the agency staved off the threat of total elimination by his administration.

For industry advocates, the findings underscore the key role of the arts in the American economy. “The U.S. [BEA’s] research makes clear that, if you care about jobs and the economy and infrastructure, you need to care about the arts,” said Robert L. Lynch, the CEO and president of Americans for the Arts, in an emailed statement. “Strategic investment in our arts and cultural organizations is not an extra, it’s a path to prosperity.”

“What’s great about this government report is formal recognition of arts and culture as an industry by the economists of the U.S. government. So in the same way that ‘travel and tourism’ is treated like a real industry, so are the arts,” said Margy Waller, a senior fellow at the research group Topos Partnership, in an email.

The report “clearly demonstrates that the cultural sector is as vital as ever,” said Tom Finkelpearl, commissioner for New York City’s Department of Cultural Affairs (DCLA), in an emailed statement.

“The economic impact of culture is one key piece of the argument in support of arts funding, alongside the benefits it brings to individuals and to our communities,” he noted. New York City’s creative sector employed 295,755 people—accounting for 7% of all jobs in the city—in 2013, according to the Center for an Urban Future’s “Creative New York” report.

The new national analysis showed that the arts ran a trade surplus of $21 billion in 2015, meaning that the U.S. exported more cultural products and services than it imported. The film and television industry generated the bulk of that figure, with $17.9 billion in exports. The overall finding is striking given the White House’s stated concern about the U.S. trade deficit, with President Trump ordering new and controversial tariffs on steel and aluminum imports on Thursday.

The 2015 data included detailed state-by-state breakdowns for the first time. New York and California, unsurprisingly, saw the greatest economic impact from the arts, with the sector adding $114.1 billion and $174.6 billion to the two states’ economies, respectively. But the economic impact of the arts is widespread across the country: In Utah, arts and cultural employment grew 5% between 2014 and 2015, outpacing California’s 4.2% and New York’s meager 0.4% growth over the same period. Georgia saw the largest employment bump in the sector, at 5.5% between 2014 and 2015.

Other surprising findings of the state-by-state breakdown include Indiana’s vibrant musical instrument manufacturing industry, the importance of the film industry to Louisiana’s economy, and that in Colorado, arts and culture contributed more to the state’s GDP than mining and transportation, generating $13.7 billion in 2015.

But the largest economic impact nationwide came from the usual suspects: broadcasting, which generated $127 billion in economic activity; followed by the motion-picture industry, which accounted for $99 billion; and non-digital publishing, with $77 billion of economic activity. The “arts-related retail trade”—which includes everything from art galleries to book stores—generated $51 million in 2015. But the arts-related retail trade employed 767,000 people to “provide arts and cultural goods and services,” making it the second-highest-employing industry in the arts and culture sector.

Independent artists, writers, and performers collectively added $22 billion to the U.S. economy in 2015, a figure that saw a 2.8% average annual growth between 2012 and 2015. The industry employed 144,000 people in 2015. Museums generated $5.3 billion in economic activity, with an average growth of 0.8%.

The government (federal, state, and local) also provided a major $101.5 billion boost to the sector, mainly in visual and performing arts education funding, according to the data. “The government’s greatest contribution to arts and cultural production is in educational services, a commodity that describes visual and performing arts education at public primary and secondary schools and at public colleges and universities,” noted the report. The finding highlights that the government funding for the arts extends well beyond the current $149 million budget of the NEA.

While the data will no doubt provide an important talking point as arts advocates again defend the NEA from cuts, there is evidence that the public itself doesn’t respond to the economic analysis the same way. A 2010 study conducted by Topos, the research organization, found that the public is often skeptical of claims regarding art’s economic impact, which they may not see directly themselves.

“While economic data about the arts can be useful when meeting privately with elected decision makers, there’s no evidence that it is persuasive to the general public,” said Waller. Instead of viewing the arts and cultural sector as  an economic commodity, she has argued, it should be thought of and advocated for as a public good benefiting everyone through a ripple effect—extending beyond those who go to cultural events or directly depend on the sector for a job.

Isaac Kaplan