Arts and Cultural Production Satellite Account: State Employment and Compensation in 2014.

Cologer, Elizabeth P. ; Ortiz, Mauricio

ON APRIL 19th, 2017, the Bureau of Economic Analysis (BEA) released--for the first time--estimates of state-level employment and compensation as part of its Arts and Cultural Production Satellite Account. State-level estimates are now available for all 50 states and the District of Columbia for 2001 to 2014. This is BEA's first satellite account to provide subnational statistics, adding regional nuance to the more expansive national data available.

This article provides an overview of BEA satellite accounts. It discusses source data and methodology for the arts and cultural production satellite account, offers a look at its statistics for specific industries, and notes some important next steps.

Arts and cultural employment nationwide grew 1.3 percent in 2014, the same pace reported for 2013 (chart 1). The total number of arts and culture jobs was 4.80 million in 2014 (chart 2), accounting for 3.3 percent of all jobs in the United States. The state-level statistics show that 24 states had employment growth in arts and cultural industries in 2014.

Compensation in arts and cultural industries grew 5.0 percent in 2014 (chart 3), accounting for 3.8 percent of U.S. compensation. The average compensation per job was $73,959 in 2014, an increase of 3.7 percent over 2013 (chart 4, page 2). Forty-nine states showed average compensation growth in arts and cultural industries in 2014.

Overview

BEA's satellite accounts are designed to measure economic activity within an economic sector that is not explicitly defined as an industry in the national accounts. These accounts are statistical frameworks that expand the analytical capacity of the national income and product accounts and the input-output (I-O) accounts by focusing on a particular aspect of economic activity. Although they provide flexibility in defining a sector of interest, the framework for measuring economic activity in the satellite accounts is consistent with the national accounts.

BEA currently produces satellite accounts for several sectors, including travel and tourism, health care, and arts and cultural production. A prototype Arts and Cultural Production Satellite Account was first produced for the United States in 2013. Official national statistics for this account were published for 1998-2012 in January 2015.

The definition of arts and cultural production used by BEA is largely consistent with the United Nations' definition. It measures creative artistic activity, the goods and services produced by such activity, the goods and services produced in support of such activity, and the construction of the buildings in which artistic activity takes place. To construct this satellite account, BEA used detailed data on economic transactions from the benchmark I-O accounts to identify what constitutes art and cultural economic activity. (1)

The industry statistics are presented in two broad categories: (1) core arts and cultural production and (2) supporting arts and cultural production. These categories come from the definitions created by BEA with input from the National Endowment for the Arts. The core category includes the commodities in which output is identified as primarily contributing to arts and culture; it includes performing arts, museums, design services, and arts education. The supporting category consists of the commodities that support the core category through publication, dissemination of the creative process, or other supportive functions; for example, it includes event promotion, printing, and broadcasting. (2) To understand the difference between the core industries and the supporting industries, consider a concert by a musical group, viewed live by an audience and digitally recorded for later dissemination. The composition of the music and the musical group performing the concert would be part of the core industries, but the recording of the concert, the production of the resulting digitized music, the selling of tickets to the event, the publication of the program, and even the construction of the facility that the concert takes place in are part of the supporting industries.

State Employment and Compensation Methodology

National employment and compensation statistics are derived by applying the arts and cultural production share of total industry output to total industry employment and compensation. At the state level, arts and cultural production statistics for employment and compensation use the same methodology that BEA uses for its state total employment and compensation statistics. The primary data source used is the Quarterly Census of Employment and Wages (QCEW) from the Bureau of Labor Statistics (BLS). First, a mapping of arts and cultural industries to six-digit North American Industry Classification System (NAICS) codes was developed. After the NAICS six-digit industries were identified, state-level aggregations of specific QCEW industries were prepared. The national arts and cultural production industry totals for employment and compensation were then allocated to states based on these state distributions for each year in the series.

The QCEW provides administrative record data for wages and salary employment. The wage data were combined with estimates of supplements to wages to develop compensation at the arts and cultural production industry level. The employment figures in the QCEW give equal weight to full-time and part-time jobs in its estimates. Unpaid family workers, proprietors, and volunteers are not counted in the employment figures.

For a few arts and cultural industries, additional data were incorporated to more accurately measure the state-specific arts and culture component. The education services industry was one where additional data were used. QCEW six-digit NAICS data do not provide enough granular detail to appropriately identify the arts and cultural components of elementary and secondary education. Additional information obtained from the National Center of Education Statistics at the Department of Education and from the Occupational Employment Statistics survey from the Department of Labor were used to supplement and zero in on the arts and culture portion of elementary and secondary education.

Construction data from Dodge Data and Analytics for constructions starts and put-in-place value at the state level were used to isolate projects related to art and cultural production construction. The Dodge data allowed BEA to look at specific arts and cultural construction, including the building and renovation of parks, theaters, schools, and libraries. The Dodge data were used to compute state-level ratios of arts related construction to overall construction. These ratios were then used to adjust the QCEW construction industry distribution for all states, before allocating to the arts and cultural production totals for the construction industry.

The government sector in the arts and cultural industries includes federal as well as state and local governments. It includes state and local education, government run parks and museums, and local libraries. The methodologies to incorporate additional data sources that were used for the construction and education industries were also used for the government sector. Subcategories such as education, museums, other information services (which includes public libraries), construction, and all other government were allocated to national totals before being summed together to create a government estimate. This allowed state-level variations in the concentration of particular industries within government to be better represented in the total government figures for each state.

Employment and Compensation

There were 1.02 million jobs in core arts and cultural industries in 2014 (table 1). Growth across all states ranged from a low of -5.8 percent in Montana to a high of 5.7 percent in Washington (chart 5, page 4). Performing arts and design services accounted for 73.1 percent of all employment in core industries. In addition, there were 3.58 million jobs in supporting arts and cultural industries. Art support services and information services accounted for 66.3 percent of employment in these industries. Government, the largest industry in art support services, accounted for 1.12 million employees.

Average compensation growth across all states ranged from a low of -1.8 percent in Idaho to a high of 8.5 percent in New Hampshire (chart 6, page 5). The average compensation for an employee in the core industries was $70,803 (table 1). The average compensation for an employee in the supporting industries was $75,390.

Employment and compensation in arts and cultural industries vary widely across states and industries. A location quotient (LQ) allows users to compare state concentrations of industries with the concentrations for the entire country. (3) Fifteen states and the District of Columbia have a higher concentration of employment than the United States (chart 7, page 6). Nine states and the District of Columbia have a higher concentration of compensation than the United States (chart 8, page 6).

The remainder of this article highlights arts and cultural production in three industries: government, sound recording, and manufacturing.

Government

Government accounted for 1.12 million jobs in 2014 (table 1). It is the largest arts and cultural industry in terms of employment in 44 states and the District of Columbia. In the District of Columbia, more than 50 percent of arts and cultural employment is in the government sector (table 2, page 7). More than half of this employment is accounted for by museums, zoos, botanical gardens, historical sites, nature parks, and similar institutions. This is expected since employees of the Smithsonian Institute and the National Park Service are federal government employees. Another approximately 25 percent of this employment is accounted for by government information services, which includes the Library of Congress and the National Archives.

In Wyoming, government employment account for more than half of total employment; national parks contribute a large portion of the government employees. In contrast, government employment in California and Florida account for less than 20 percent of employment in arts and cultural industries; employment in these states are primarily in the private sector.

Sound recording

Sound recording accounting for 12,605 thousand jobs in 2014 (table 1, page 3). Although California and New York are typically associated with the sound recording industry, Tennessee has the highest LQ (6.48) for employment in the sound recording industry (table 3, page 7). This comes as no surprise to country music fans or to those who know that Nashville's nickname is "Music City." New York and California--with LQs of 3.09 and 1.91, respectively--also have a greater concentration of employment than the United States in the sound recording industry. With a LQ of 1.86, ranking fourth, the concentration of employment in Nevada is only slightly below that in California. Average compensation per job in the sound recording industry in all four states was above $135,000 in 2014, with New York leading the way at $269,068.

Manufacturing

Manufacturing accounted for 174,804 thousand jobs in 2014 (table 1, page 3). Several manufacturing industries contribute to arts and cultural production. These include the jewelry and silverware manufacturing industry, the musical instrument manufacturing industry, the custom architectural woodwork and metal-work manufacturing industry, and the printed goods manufacturing industry as well as others. In New Mexico, 71 percent of these manufacturing jobs are in the jewelry and silverware manufacturing industry. In South Dakota, jewelry and silverware manufacturing accounts for one-third of arts and cultural manufacturing jobs (table 4, page 7). Both of these states are known for their Native American silver production. In New Mexico, the LQ of employment in all manufacturing industries is 1.24, indicating that the concentration of employment in arts and cultural manufacturing is 24 percent higher than in the United States as a whole. Employment in jewelry and manufacturing has an LQ of 5.96, the highest in the nation, demonstrating the high concentration of this industry in New Mexico's economy.

In the musical instrument manufacturing industry, Tennessee has the highest concentration of employment with an LQ of 4.64 (table 5). The world's largest guitar manufacturing company has their headquarters in Tennessee. Compensation for workers in this industry averages $82,974 per year, compared with $61,841 in arts and cultural manufacturing as a whole. Indiana is another state with a high LQ in the musical instrument manufacturing industry. Although the industry has declined over the years, Indiana is still the "band instrument capital of the United States" and is home to several long-time manufacturers of band instruments. The average compensation of $85,964 in this industry is higher than the average compensation of $55,764 in arts and cultural production manufacturing as a whole.

With only 691 arts and cultural production manufacturing jobs, Vermont is among the smaller manufacturing states. The largest portions of these jobs are in the custom architectural woodwork and metalwork manufacturing industry. The employment LQ for this industry is 4.72, indicating that Vermont has an extremely high concentration of employees in this industry, compared with the United States as a whole (table 6). This industry uses skilled craftsmen as labor and produces custom pieces made to order.

Wisconsin is well known for its production of beer and cheese, but it also has a robust printed goods manufacturing industry. Wisconsin's arts and cultural employment manufacturing LQ is 2.66, placing its concentration of such manufacturing employment well above that of the nation. The majority of that employment comes from the printed goods manufacturing industry whose LQ is 3.23 (table 7). This industry produces items that are inputs to other artistic products, such as books and manuscripts. In Wisconsin, commercial gravure printing employs the most workers in arts and cultural industries.

Next Steps

In early 2018, BEA will release for the first time state-level estimates of value added for arts and cultural industries. Value added will allow the public to determine how much arts and cultural production contributes to the gross domestic product of each state.

In addition, BEA will continue to focus on improving and refining the methodology for these estimates. For example, one area of continued focus is advertising and broadcasting. Sports are not considered to be part of the cultural production portion of this account and are specifically excluded in the national numbers. BEA is currently exploring the use of microlevel data from several data sources to enhance and refine the state numbers for advertising and broadcasting in order to exclude firms that engage in sports-related broadcasting and advertisements. Comments, questions, and suggestions are welcome at artsandculture@bea.gov.

By Elizabeth P. Cologer and Mauricio Ortiz

(1.) Paul V. Kern, David B. Wasshausen, Steven L. Zemanek, "The Arts and Cultural Production Satellite Account" (abstract, 22nd International Input-Output Conference, July 1-18, 2014, Lisbon, Portugal).

(2.) Paul V. Kern, David B. Wasshausen, Steven L. Zemanek, "BEA Briefing: U.S. Arts and Cultural Production Satellite Account, 1998-2012," SURVEY OF CURRENT BUSINESS (January 2015).

(3.) A location quotient (LQ) measures an industry's concentration of employment or compensation relative to the U.S. industry's share. An LQ is computed as an industry's share of a regional total divided by the industry's share of the national total for the same statistic. An employment LQ of 1.2 indicates that the state's employment in the industry is 20 percent greater than the industry's national employment share. An employment LQ of 0.8 indicates that the state's employment in the industry is 20 percent below the industry's national employment share. Table 1. Employment and Average Compensation of Employees Per Job by Industry, 2014 Industries in the arts Employment Compensation Average and cultural (millions of compensation production satellite dollars) (dollars) account Total 4,802,813 355,213 73,959 Core arts and 1,023,812 72,489 70,803 cultural production Performing arts 259,606 18,909 72,837 Performing arts 103,911 7,920 76,219 companies Promoters of performing arts and similar events 92,408 2,943 31,848 Agents/managers 23,889 1,319 55,214 for artists Independent artists, 39,398 6,728 170,770 writers, and performers Museums 129,599 4,028 31,080 Design services 488,583 42,109 86,186 Advertising 146,395 13,049 89,136 Architectural 110,115 11,889 107,969 services Landscape 23,256 2,247 96,620 architectural services Interior design 22,067 1,873 84,878 services Industrial design 28,230 1,128 39,957 services Graphic design 62,609 4,072 65,039 services Computer systems 19,837 2,817 142,007 design Photography and 73,633 4,545 61,725 photofinishing services All other design 2,441 489 200,328 services Fine arts education 49,592 3,133 63,176 Education services 96,432 4,309 44,684 Supporting arts and 3,578,839 269,809 75,390 cultural production Art support services 1,193,517 86,284 72,294 Rental and leasing 37,858 1,390 36,716 Grant-making and 6,010 412 68,552 giving services Unions 21,932 1,206 54,988 Government 1,124,098 82,981 73,820 Other support 3,619 295 81,514 services Information 1,178,134 126,238 107,151 services Publishing 327,004 41,518 126,965 Motion pictures 374,162 29,351 78,445 Sound recording 12,605 2,514 199,445 Broadcasting 410,178 35,459 86,448 Other information 54,185 17,395 321,030 services Manufacturing 174,804 10,429 59,661 Jewelry and silverware 25,864 1,555 60,122 manufacturing Printed goods 92,037 5,266 57,216 manufacturing Musical instruments 8,471 712 84,051 manufacturing Custom architectural woodwork and metalwork manufacturing 30,194 1,441 47,725 Camera and motion picture equipment manufacturing 258 11 42,636 Other goods 17,980 1,445 80,367 manufacturing Construction 100,222 5,809 57,961 Wholesale and 191,285 14,877 77,774 transportation industries Retail industries 740,877 26,172 35,326 All other industries 200,162 12,916 64,528 Table 2. Total and Government Employment in the Arts and Cultural Production Satellite Account by State, 2014 Government's Total Government share of total employment employment employment (percent) United States 4,802,813 1,124,098 23.4 Alabama 47,458 14,963 31.5 Alaska 11,825 5,216 44.1 Arizona 85,976 18,055 21.0 Arkansas 34,186 14,158 41.4 California 674,865 88,795 13.2 Colorado 96,610 23,926 24.8 Connecticut 57,444 13,692 23.8 Delaware 8,996 1,741 19.4 District of 51,603 26,520 51.4 Columbia Florida 236,557 37,559 15.9 Georgia 126,519 26,023 20.6 Hawaii 21,748 4,754 21.9 Idaho 20,235 6,015 29.7 Illinois 202,397 54,373 26.9 Indiana 93,772 27,163 29.0 Iowa 41,443 12,002 29.0 Kansas 45,513 14,672 32.2 Kentucky 51,398 17,387 33.8 Louisiana 56,368 17,085 30.3 Maine 16,112 4,377 27.2 Maryland 80,498 20,275 25.2 Massachusetts 128,349 24,556 19.1 Michigan 122,364 29,312 24.0 Minnesota 98,400 23,558 23.9 Mississippi 26,110 10,403 39.8 Missouri 92,216 26,815 29.1 Montana 15,039 5,001 33.3 Nebraska 27,406 7,090 25.9 Nevada 40,323 7,657 19.0 New Hampshire 19,960 4,423 22.2 New Jersey 130,603 27,752 21.2 New Mexico 25,620 8,831 34.5 New York 459,942 90,075 19.6 North Carolina 113,064 26,286 23.2 North Dakota 13,764 4,352 31.6 Ohio 171,902 48,353 28.1 Oklahoma 44,108 11,931 27.0 Oregon 64,712 18,154 28.1 Pennsylvania 169,761 32,579 19.2 Rhode island 17,882 3,958 22.1 South Carolina 49,828 14,707 29.5 South Dakota 14,179 4,710 33.2 Tennessee 83,305 15,838 19.0 Texas 350,643 105,377 30.1 Utah 55,965 12,595 22.5 Vermont 10,486 2,113 20.2 Virginia 120,808 36,369 30.1 Washington 154,230 35,190 22.8 West Virginia 17,399 6,699 38.5 Wisconsin 91,471 24,413 26.7 Wyoming 11,451 6,250 54.6 Table 3. Employment and Average Compensation Per Job in the Sound Recording Industry for Selected States Employment Location Average quotient compensation (dollars) 2013 2014 2014 2013 2014 Tennessee 1,594 1,620 6.48 191,003 210,423 New York 2,496 2,542 3.09 252,330 269,068 California 2,736 2,898 1.91 205,228 223,485 Nevada 196 213 1.86 162,627 136,711 Table 4. Employment and Average Compensation Per Job in Arts Manufacturing and in Jewelry and Silverware Manufacturing for New Mexico and South Dakota Employment Location Average quotient compensation (dollars) 2013 2014 2014 2014 Arts manufacturing New Mexico 1,149 1,154 1.24 39,825 South Dakota 1,051 1,072 2.08 45,266 Jewelry and silverware manufacturing New Mexico 818 824 5.96 40,000 South Dakota 395 388 5.19 47,499 Table 5. Employment and Average Compensation Per Job in Arts Manufacturing and in Musical Instrument Manufacturing for Indiana and Tennessee Employment Location Average quotient compensation (dollars) 2013 2014 2014 2014 Arts manufacturing Indiana 5,780 5,834 2.50 55,764 Tennessee 4,225 4,147 1.37 61,841 Musical instrument manufacturing Indiana 424 427 2.30 85,964 Tennessee 774 779 4.64 82,974 Table 6. Employment and Average Compensation Per Job in Arts Manufacturing and in Custom Architectural Woodwork and Metalwork Manufacturing for Vermont Employment Location Average quotient compensation (dollars) 2013 2014 2014 2014 Arts manufacturing 682 691 1.81 46,598 Custom architectural woodwork and metalwork manufacturing 318 313 4.72 37,927 Table 7. Employment and Average Compensation Per Job in Arts Manufacturing and in Printed Goods Manufacturing for Wisconsin Employment Location Average quotient compensation (dollars) 2013 2014 2014 2014 Arts manufacturing 8,868 8,847 2.66 56,378 Printed goods manufacturing 6,152 6,092 3.23 57,189