The value of the creative economy in 2015 amounted to $763 billion dollars, which is more than construction, mining, utilities, and accommodation and food service industries. It is also unionized. This article documents how much unions impact wages and employment in the creative economy and also demonstrates that unions have no impact on the gig economy–independent artists, writers, and performers.
The Bureau of Economic Analysis publishes data on the creative economy in its Arts and Cultural Production Satellite Account. There are a few key variables that it publishes. First, it publishes total compensation and total employment for core arts and cultural production for each state. See notes for which industries fall under core arts and cultural production.
Second, the Arts and Cultural Production Satellite Account publishes a location quotient for unions in the arts based on union employment. The location quotient measures a state’s union concentration relative to the nation. For example, a location quotient of 1.0 in unions means that the state and the nation are equally concentrated in unions; while a location quotient of 1.8 means that the state has a higher concentration in unions than the nation.
To determine the impact of unions on total employment in core arts and cultural production, I regress total employment on the union location quotient. To determine the impact of unions on total compensation, I regress total compensation on the union location quotient. The regressions predict the impact of a one percentage point increase in union location quotient on total employment and total compensation.
Figure 1, below, shows the impact of union concentration on total compensation and total employment of core arts and cultural production. The regressions also control for state GDP to control for differences in the size of the economy in each state. I also control for year to control for changes in the macro environment.
The results show that a one percentage point increase in union concentration leads to $3.25 million increase in total compensation. A one percentage point increase in union concentration leads to an increase in total employment of 33 people. The reason why we see these increases is because unions are able to negotiate higher wages and more employment for their constituents.
| Figure 1. Impact of Union Concentration on Core Arts and Cultural Production | |||
| Dependent Variable | Coefficient on Union Location Quotient | t-statistic | Significant? |
| Total Compensation in Core Arts and Cultural Production | $3,250,204 | 5.07 | Yes |
| Total Employment in Core Arts and Cultural Production | 33.28 | 4.34 | Yes |
There is also an opportunity here to see if unions impact the gig economy–in this case, independent artists, writers, and performers. The quick answer is no. Figure 2, below, shows that the impacts of union concentration on total compensation and total employment for independent artists, writers, and performers are both highly insignificant.
| Figure 2. Impact of Union Concentration on Independent Artists, Writers, and Performers | |||
| Dependent Variable | Coefficient on Union Location Quotient | t-statistic | Significant? |
| Total Compensation for Independent Artists, Writers, and Performers | $41,419 | 0.58 | No |
| Total Employment for Independent Artists, Writers, and Performers | 0.05 | 0.25 | No |
The findings are that union concentration increases both wages and employment in core arts and cultural production industries as a group. The gig economy–independent artists, writers, and performers–are not impacted by union concentration. This analysis is silent on how to extend wage and employment gains to independent artists.
Notes: Core arts and cultural production include performing arts companies, promoters of performing arts and similar events, agents/managers for artists, independent artists, writers, and performers, museums, advertising, architectural services, landscape architectural services, interior design services, industrial design services, graphic design services, computer systems design, photography and photofinishing services, all other design services, fine arts education, and education services.
Sources: https://nasaa-arts.org/nasaa_research/facts-figures-on-the-creative-economy/ , https://www.bea.gov/data/special-topics/arts-and-culture