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

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
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Author:Cologer, Elizabeth P.; Ortiz, Mauricio
Publication:Survey of Current Business
Article Type:Statistical data
Geographic Code:1USA
Date:Sep 1, 2017
Words:3613
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