Spotlight: New York City’s Creative Economy

Introduction

New York City is the artistic and creative epicenter of the country and, in many respects, of the world. It is where the world-class art of great museums meets the ad firms of Madison Avenue, where high fashion struts among the sound stages of Astoria and the bright lights of Broadway, where news and culture and books and music are produced for the world even as media continue to evolve, where artists and creators develop and come to make their name.

The “Creative Economy” is more than just an agglomeration of cultural pursuits: It is a defining economic sector for New York City – on par with finance, real estate or law. New York City’s creative sector has long been a vital contributor to the city’s economy, its vibrancy, diversity, and overall quality of life. That’s why, in November 2019—prior to the COVID-19 pandemic—the Comptroller’s office produced an in-depth study on this segment of New York City’s economy as it stood in 2017.

In this Spotlight we use parallel methodology and metrics to look at how the city’s Creative Economy has fared as it has emerged from the pandemic, and how this critical segment of New York City’s economy has changed over the past five years. We’ve also updated the online Creative Economy Dashboard on the Comptroller’s website.

Our analysis finds that the Creative Economy has emerged strongly from the pandemic. Both employment and inflation-adjusted wage & salary earnings had surpassed 2017 levels by 2022, roughly matching overall job growth citywide. Within the Creative Economy sectors, the strength of the rebound varied substantially. The city’s sizable Creative Media segment, which comprises Publishing, Broadcasting, Media Streaming and related industries, saw employment surge by almost 20% by 2022. In other segments, notably Fashion, Museums & Libraries, and Performing Arts, the post-pandemic recovery in employment still lagged in 2022, though more recent data suggest a solid rebound in the latter two by early 2024. Jobs in most of these creative industries tend to pay above the city’s median income, though the sizable number of freelancers in creative occupations tend to have lower and more variable incomes.

Perhaps the most striking observation is that, even coming out of the pandemic, which hit New York City particularly hard and might have diminished people’s appetite for the kinds gatherings with strangers (e.g. Broadway shows, music venues, museum-going) that drive much cultural production, all these industries continued to be more highly concentrated here than nationally and also more than in almost every other major U.S. city.

Defining the Creative Economy

In designating employment and other economic statistics, the government does not have a particular classification for the Creative Economy. However, a portrait of this segment of the economy can be created by grouping together relevant industries (based on the nature of the employer) and/or occupations (based on the role of the person) that are considered “creative.”[1] Because both dimensions are important, the earlier study and this one profile the Creative Economy as both a cluster of industries (the creative sector) and a cluster of occupations (the creative workforce).

As described in the 2019 study, the Creative Sector “… includes any industry the primary output of which is creative or cultural—from museums and art galleries, to film and television production, theater and dance companies, fashion, publishing, advertising, and more.” [2]

Industries: The Creative Sector

The cluster of industries assembled to define the Creative sector is shown in Chart 1 below, along with their relative size—both in 2017 and in 2022.  Because of the rising role of digital media and the Internet, and due to changes in the way some industries are defined, we have developed a new industry group called Creative Media, which essentially replaces Publishing and TV—two distinct segments in the earlier report—with a wider definition that includes both of these, as well as internet-based media, such as Internet Publishing and Media Streaming services. We did not include Software Publishing in this group, as this rapidly growing industry was not included in our earlier study, and even though it certainly includes creative activity, it also includes a good deal of business type applications and represents a part of the tech sector that is less characteristic of the Creative Economy as defined here.

As of 2022, these Creative industries together employed an estimated 274,000 people in New York City—up 3.4% from 265,000 in 2017, and modestly exceeding the 2.2% increase in total employment in the city. Total wage and salary earnings in these industries rose by 24% over these five years, and average earnings rose by 20%, slightly exceeding CPI inflation.

Some segments, notably Creative Media, saw net job creation over this period, while most saw steady to slightly declining employment. However, it is worth noting that some of these segments, such as Museums and Libraries and Fashion, were still in the process of rebounding from COVID-driven closures and weak demand during the pandemic.

Chart 1

Source: NY State Department of Labor, Office of the NYC Comptroller

Average wage & salary earnings have grown briskly in some of these industry groups—and, in a number of cases, from already fairly high levels, as shown in Chart 2 below. Average earnings over the entire Creative Sector group stood at $146K in 2022—well above the citywide overall average of $114K. However, there is wide variation both across and within sectors, as we expore further below when we look at the Creative workforce.

The Independent Artists[3] and Music Recording segments, though two of the smallest groups, were the highest-paying of these in 2022, with average annual earnings of more than $200,000—up 37% and nearly 60%, respectively, over the five-year period. Creative Media, Advertising, Art Galleries, and Motion Pictures were also among the highest-paying. At the other end of the spectrum, those employed in Fashion, Performing Arts, Museums & Libraries, and Applied Design earned less than the citywide average across all industries.

Chart 2

Source: NY State Department of Labor, Office of the NYC Comptroller

Industry Concentration & Location Quotient

New York City is the home to a disproportionally large segment of U.S. based Creative Industries. As the largest U.S. city, New York leads the nation in the absolute size of many industry sectors in terms of employment, earnings, and number of business establishments. But within every one of the creative industries, it leads the nation by an outsized margin. To illustrate this, New York City accounts for 2.6% of the nation’s population and 3.0% of its jobs. However, as shown in Chart 3 below, the city accounts for a much larger proportion of nationwide jobs in all of the Creative Economy segments, ranging from 4.4% for Fashion to 19% for Advertising.

Chart 3

Source: NY State Department of Labor, Office of the NYC Comptroller, U.S. Bureau of Labor Statistics, Moody’s Economy.com

The relative importance of a particular local industry is generally gauged by its employment concentration or location quotient (LQ). An industry’s LQ measures a locality’s share of nationwide employment in that industry divided by its total share of nationwide employment. An LQ of 1 indicates that an industry’s share of employment is about the same locally as nationally, while a higher LQ signifies an industry that is more highly concentrated locally. Chart 4 below shows New York City’s LQs for each of the Creative industries highlighted here along the horizontal axis.

As an example: within the Advertising industry, New York City’s share of nationwide employment was 19% in 2022, as indicated in Chart 3 above; this is 6.6 times as high as its 2.9% share of U.S. employment across all industries, thus its LQ is 6.6, as shown in Chart 4. The industry’s average wage & salary income is shown on the vertical axis; each bubble represents one of the creative industries included here and its size represents the number of jobs in New York City in 2022. New York City has relatively high concentrations not only of the group overall but of every one of these individual segments, as well. For the Creative sector overall, the New York City’s LQ is 4.29, down slightly from 4.33 in 2017.

Chart 4

Sources: NY State Department of Labor, Office of the NYC Comptroller, US Bureau of Labor Statistics, Moody’s Economy.com

But how does it compare with other major urban hubs across the U.S.? Chart 5 below compares the relative size of the Creative Economy group—measured as a share of total employment—for some of the largest cities across the nation (based on their primary urban counties). The only cities with a higher Creative employment share than New York City are San Francisco (due to its large Creative Media segment) and Los Angeles (due to its dominant Motion Picture industry). It is instructive to note that all but two of these have a higher concentration of Creative-sector employment than the nation as whole, illustrating the urban nature of these industries.

Chart 5

Source: U.S. Bureau of Labor Statistics, Moody’s Economy.com

These Creative industries altogether comprise a sizable share of the city’s economy and job base, representing slightly over 6% of employment and 8% of wage & salary earnings. Yet the economic benefit to the city goes well beyond that.

While difficult to quantify explicitly, Advertising, Creative Media, Music, and Fashion bring revenues into the city from outside and abroad. The prevalence of Broadway theaters, world-famous museums, libraries, art galleries, concert venues, and myriad outdoor events serve as major tourist attractions, a big part of what draws tens of millions of people to New York City each year. This Creative ecosystem also draws world-class talent to live and work in New York, leading to the creation of new businesses, brands, and creative practices, many of which draw from the diverse cultures of New Yorkers.

In addition, of course, while this analysis looks specifically at economic issues, the benefits of the strong presence of the Creative sector goes far beyond the economic, providing New Yorkers with joy, camaraderie, and wellbeing which are notoriously hard for economists to measure.

Occupations: The Creative Workforce

Having reviewed the local industries and businesses that can be characterized as creative, we briefly turn to the workforce side, as defined by occupation. Not all people working in these creative industries delineated above are necessarily in occupations that one would describe as “creative”. For instance, a bookkeeper, accountant, or HR executive working for a theatre company would not generally be considered in a creative role. Conversely, a photographer or writer would be considered part of the creative workforce whether they were working for a publishing firm or a major Wall Street bank. Thus, we now look at another dimension of the Creative Economy: the creative workforce.

As of the 2022 ACS (American Community Survey), which is the latest data set available, an estimated 234,000 New Yorkers worked in a creative occupation—little changed from 2017—accounting for roughly 6% of employment. Table 2 below shows the number of city residents in each of these occupations in both 2017 and 2022, along with the percentage change. While the overall number of city residents in creative occupations did not change much overall, there were some substantial changes within a number of the individual categories.

Table 1: Number of NYC Residents by Occupation

Source: U.S. Bureau of the Census’ American Community Survey, Office of the NYC Comptroller

The steep drop in the number of Actors may represent a holdover from the pandemic; occupational data for 2023 (available for the broad metro area but not the city proper) point to a sharp rebound in 2023—at least as of May, prior to the strike, when the annual survey was conducted. Some of the other declines, though not showing signs of rebounding in 2023, may also be pandemic-related.

In contrast to the industry data, the occupational data include New Yorkers who are self-employed, and these workers can be distinguished from those on a firm’s payroll.  As was the case in 2017, many creative workers are freelance, with fluctuating and—in many cases—modest incomes. Across these occupations, 36% of workers residing in New York City described themselves as self-employed in 2022—little changed from 38% in 2017. However, a majority of artists, musicians, and photographers reported being self-employed.

To illustrate this dimension, actors who were employed by an establishment (i.e. a theater, motion picture firm, or agency) earned $78,000 on average—well below the average across all industries in the city—while the average freelance actor earned just $52,000. The respective earnings figures were $107,000 and $38,000 for musicians and singers and $69,000 and $36,000 for dancers & entertainers. Interestingly, for artists and related workers, freelancers earned more on average ($82,000) than those on payrolls ($63,000), though both were well below the average across all industries.

Recent Trends

Our analysis of the Creative Economy focuses on 2022 for two major reasons. First, 2022 is the latest year for which detailed occupational data for New York City are available. Second, while industry employment and earnings data are available for 2023 and even early 2024, those statistics for at least some of the creative industries would have been temporarily distorted by the 2023 actors’ and writers’ strikes, which lasted close to four months. For example, as of the first quarter of 2024, employment in the city’s motion pictures industry was still down roughly 14% from comparable 2022 levels.

Still, for at least some of the creative industries less affected by the strikes, it is encouraging to note that employment appeared to be on an upward trajectory through the early part of this year. In particular, the Performing Arts segment, which had been severely impaired by the pandemic, registered more than 10% job growth from early 2022 to early 2024; Art Dealers, which were less affected by COVID, saw roughly 7% growth, and jobs in the Creative Media segment expanded by about 3%.

Not all the news is positive, as illustrated by scattered layoff announcements in the Music industry and elsewhere. But overall, the outlook is encouraging, as Broadway theaters have seen attendance and revenues rebound to pre-pandemic levels, and there are indications that off-Broadway theaters have been seeing a resurgence as well. Meanwhile, museums, such as the Metropolitan Museum of Art (the Met), have welcomed a growing number of visitors.

Outlook

Many of the issues and challenges that were facing the Creative Economy in 2017 continue today. Volatile employment situations for some creative workers and high rates of self-employment contribute to economic insecurity. Part-time work remains prevalent, especially for actors and musicians. With rates of self-employment that triple those of the overall workforce, many lack access to benefits and protections available to employees, such as affordable health insurance and unemployment insurance.

Finding affordable places to live and work for Creative sector workers has become an ever-steeper challenge, perhaps the greatest obstacle for the future. If New York City is allowed to become a place with limited economic footholds for artists, writers, and others who yearn to stake their claim, it will cease to be a beacon for creative types across the globe and the city will pay a steep price – in both economic activity and the cultural riches that have long defined the five boroughs.

Public policy can make a meaningful difference for the Creative Sector. In 2017, following advocacy by Freelancers Union, the New York City Council passed the Freelance Isn’t Free Act (the lead sponsor was then-City Councilmember, now Comptroller Brad Lander), which provides the strongest protections in the country for freelancers against being stiffed or exploited. The law has enabled thousands of NYC freelancers, many of them in the Creative sector, to recover millions of dollars they were owed,[4] and has recently been expanded statewide.

As was identified in the 2019 report, more can and should be done to strengthen and sustain the city’s sprawling yet often fragile cultural eco-system. To fortify and grow the creative sector and expand access to New Yorkers of all incomes and ethnicities, the City should treat the sector as the economic engine and resource that it is, and at the same time tackle the challenge of making the City more secure and affordable for creative workers. Supporting the creative economy more broadly will require both targeted investments in specific industries, as well as broad based investments aimed at making New York City a more affordable place to live, work and create. Many of the recommendations from the 2019 report therefore remain relevant.

Even with these challenges, however, New York City’s Creative Economy, hard-hit by the pandemic, has seen a strong and dynamic recovery. The Creative sector remains a bellwether of not only the city’s economy, but also of its resilience, wellbeing, and thriving future.

Appendix: Methodology

Each of the industry groups in this report are based on the NAICS codes, as shown in the table below.  Due to changes in industry classifications between 2017 and 2022—most notably for the Creative Media segment—BLS (Bureau of Labor Statistics) industry crosswalks were used to optimize comparability.

Table 2: Industry Groupings by NAICS Code, 2017 & 2022

Source: Office of the NYC Comptroller, U.S. Bureau of Labor Statistics

Acknowledgements

This report was prepared by Jason Bram, Director of Economic Research, with assistance from Jonathan Siegel, Chief Economist, Stephen Corson, Senior Research Analyst, and Astha Dutta, Economic Data Analyst. Archer Hutchinson, Creative Director, and Addison Magrath, Graphic Designer led the design, with assistance from Angela Chen, Senior Website Developer and Martina Carrington, Web Developer.

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Endnotes

[1] Both dimensions—industry versus occupation—have drawbacks. For instance, based on industry, an architect working at a construction firm would not be counted as a creative worker, while that same person working at architectural design firm would. Meanwhile, the head of accounting or human resources at an ad agency would be counted as creative workers—indistinguishable from the people who design ads. Conversely, based on occupation, an editor working on an IT firm’s technical manuals would be counted—indistinguishable from an editor working on a movie script.

[2] The 2019 study used data from 2017; this one looks at 2022—after the worst of the pandemic was over but before the writers’ and actors’ strikes in 2023.

[3] The Independent Artists industry includes independent artists, writers, and performers that are incorporated as freelancers.

[4] https://www.nyc.gov/assets/dca/downloads/pdf/workers/DCWP-Freelance-Isnt-Free-Act-Five-YearReport-2023.pdf