Quality Jobs and the Creative Economy

There is a growing consensus that the 21st century will be the century of creativity.¹ Worldwide government officials, corporate executives, and policy experts are rallying around the potential for creativity to “generate financial returns with minimal production and distribution costs, help people escape poverty, and bolster cross-cultural exchange and understanding.”²

One question lurking beneath this enthusiasm is: What does the transition to a creative economy mean for workers? 

Jobs in the creative economy go far beyond employing artists and designers. The foundation Nesta measured employment in the creative economy in the United States and found a total of 10.3 million jobs³ or nearly 10 percent⁴ of total U.S. employment to be in the creative economy. Over two-thirds of these jobs were non-creative support jobs across the employment spectrum, including management, manufacturing, service, and retail.

What is known about quality jobs?

Most research on job quality addresses 20th century jobs in manufacturing and services; very little addresses 21st century jobs. Given the rapid transition to automation in 20th century job sectors and anticipated growth in the creative economy globally,⁵ there is an urgent need to understand the impact of the creative economy on job quality.

Academics,⁶ advocates,⁷ investors,⁸ and grantmakers⁹ are increasingly focused on job quality, not just job growth.¹⁰ After the 2008 recession, the United States experienced a period of significant job growth. Much of that growth, however, was in service sector jobs that did not pay a living wage, provide benefits, or offer predictable schedules, respect, and security in the workplace.¹¹

A report from Pacific Community Ventures (PCV) found “employment numbers have recently bounced back to pre-recession levels, but the overwhelming majority of the jobs created have been in low-income, low-skilled sectors. The economy might be recovering, but the recent growth is small comfort to the millions of low- and moderate-income workers who were hit hardest by the financial crisis.”¹² PCV, among many other organizations, has turned its attention to measuring and promoting quality jobs as opposed to focusing on basic job growth.

Defining quality jobs

PCV’s report defines a “quality job” as having at least three of the following five elements:

1. A living wage,
2. Basic benefits,
3. Career-building opportunities,
4. Wealth-building opportunities, and
5. A fair and engaging workplace.¹³

PVC is not the only organization to define a quality job. Among others, the American Sustainable Business Council developed Principles of High Road Employers,¹⁴ which includes several labor-related policies; B-Lab includes Good For Workers Standards¹⁵ in its certification requirements.

Another leader in promoting quality jobs was the Hitachi Foundation, with its program Good Companies @ Work.¹⁶ The program researched, highlighted, and published case studies on “Pioneer Employers” – companies that had positive financial performance and provided quality jobs. The nearly 100 Pioneer Employers profiled are mostly in the manufacturing and healthcare industries, although four are in the culinary arts.¹⁷

The Hitachi Foundation’s report on Pioneer Employers concluded that “the success of these firms and their workers demonstrates that employers in the course of routine strategic development can help lower income employees attain a higher standard of living. They do so by strengthening the mechanisms within their control through targeted employment practices and policies, strategic deployment of human resources, revamped production and service models, and management follow-through.”¹⁸ (The Hitachi Foundation ceased operations in 2016 and divided the Good Companies @ Work program among the Aspen Institute, MIT Sloan School of Management, and Investors’ Circle, where the work continues.)

Zeynep Ton’s book, The Good Jobs Strategy, examines the employment practices at four companies: Trader Joe’s, Costco, QuikTrip, and Mercadona. These four companies, operating in the highly competitive, low-margin retail space, manage to deliver good customer service and strong investor returns while also providing quality jobs. Ton argues that the happy customers and good financial performances at these companies are because of, not in spite of, the companies’s commitment to worker-friendly employment practices.

Defining quality jobs for the creative economy

While many experts and organizations are tackling the challenge of creating quality jobs in the 21st century, few of those active on the quality jobs issue take into account the growing creative economy and its likely impact on the job market. A premise of many discussions about quality jobs is that, in the past, the manufacturing economy offered respectable, fulfilling jobs that paid a living wage and, in the present, the service economy offers low-paying jobs that do not garner the same level of respect and fulfillment as the manufacturing jobs of yore. This premise naturally leads to two objectives: How do we boost manufacturing, and how do we turn service jobs into higher quality jobs?

Whether a fallacy exists in the underlying premise is a debate for another place and time.¹⁹ We concur that these are important questions, but we also believe these questions ignore the fact that automation is eliminating whole segments of the workforce, the gig economy is growing, and creative work is an increasingly significant and automation resistant segment of the workforce. Little research addresses whether jobs at Creative Businesses are quality jobs and, if they are not, how to turn jobs at Creative Businesses into higher quality jobs.

Let’s start with the definition of a quality job and whether it applies to the creative economy. When defining a quality job, several factors applicable to many workers in the creative economy are not addressed. Many creatives pursue individual artistic practices outside of the role where they earn a living. So having a flexible work schedule and independent work environment is critical. Similarly, having a job that allows a person to exercise his or her creativity may outweigh, in part, certain of the PCV factors. Some creatives find intangible benefits to exercising their creativity that are not captured in the PCV definition. Self-employment and freelancing are widespread in the creative economy.²⁰ One result of this common employment arrangement is that creative workers value portable benefits over having a single-employer provided benefit plan.

Intangible benefits tied to exercising creativity, benefit portability, flexibility, and independence are not adequately reflected in the PCV and similar definitions. This is not a critique of the PCV definition, which is an excellent starting point for examining job quality. But for purposes of analyzing job quality in the creative economy, researchers and advocates should consider whether additional or alternative factors should be examined.

What is known about creative jobs?

Most research about workers in the creative economy focuses on identifying occupations²¹ that require creativity and counting the quantity of jobs supported by the creative economy. We are not aware of any research that examines quality of jobs in the creative economy.

One key quality of many creative jobs is that they are resistant to automation. “Robots are to blame for up to 670,000 lost manufacturing jobs between 1990 and 2007 … and that number will rise because industrial robots are expected to quadruple.”²² Creativity is one work function few believe robots can mimic. The results of a 2015 report from Nesta “strongly confirm the intuition that creative occupations are more future–proof to computerisation. In the U.S., 86 percent of workers in the highly creative category are found to be at low or no risk of automation.”²³

Regardless of near-term quality indicators for employment in the creative economy, investing in the creative economy is likely a good long-term strategy for creating quality jobs simply because these jobs will endure the coming automation transformation in the economy overall.

How many jobs are there in the creative economy?

Studies measuring the number of people employed in the creative economy report widely varying figures based on their definition of creative economy. But by any measure, the number of people employed in the creative economy is significant and, given their resistance to automation and anticipated growth in the creative economy, the number of people employed in the creative economy is likely expanding not contracting.

According to Richard Florida, under his broad definition of the creative economy, which includes law, business, and health care, there are more than 40 million creative class workers, equal to roughly one-third of the U.S. workforce.²⁴

The National Endowment for the Arts’s Creative Placemaking report developed a different definition tied to industries that employ a high concentration of artists and identified a workforce of 27 million people.²⁵

Nesta, a UK-based foundation that does research on the creative economy, looked at creative jobs and non-creative jobs (or support jobs) in the creative economy and outside the creative economy in the United States, and found a total of 10.3 million jobs in the creative economy.²⁶

Under Americans For The Arts’s narrow definition, examining only businesses, including nonprofits, involved in the production or distribution of the arts, there are 2.9 million people employed in the creative economy.²⁷

Are creative jobs by definition quality jobs?

If a business’s product is creativity, then its most valuable asset is its employees and their  individual and collective creativity. Logic suggests that to optimize the output of an employee whose contribution is his or her creativity, the employee needs to be compensated and cared for in a manner conducive to creative thinking, paid a living wage and treated with respect in a humane working environment. Having a productive creative workforce is a principal economic driver in the business model for all Creative Businesses. That fact would seem to incentivize providing quality jobs. Does the evidence support this conclusion?

The NEA’s analysis of artist income (a very narrow category of creative worker) finds artist income is higher than the median annual national income in the United States.²⁸ Richard Florida’s work comparing jobs between what he calls the Creativity, Working, and Service Sectors reaches a similar conclusion. As described already, his definitions do not mirror ours. He incorporates several types of jobs (e.g. management, medical, legal) that do not tie to arts and creativity as we’ve defined them.

Nevertheless, Florida’s research on income itemizes findings by industry.²⁹ He found that the average annual income in 2010 for workers in the Working Class was $36,991 and the Service Class was $29,188 and the average annual income in Arts, Design, Entertainment, Sports, and Media occupations was $52,440 and in Architecture and Engineering occupations it was $75,550. The occupations in creative sectors are all higher than the Working and Service Class income levels. While this analysis is by no means conclusive, and it does not address varying levels of education, it does suggest that for the income-prong in the definition of a quality job there is reason to be optimistic that creative jobs are quality jobs.

Are support jobs in the Creative Economy quality jobs?

Evidence from the quality jobs movement suggests that investing in workers and providing quality jobs, including for manual and service workers, improves financial results.³⁰ The creative economy creates far more support jobs than creative jobs, by nearly three to one.³¹

We believe there is a symbiosis between creativity and job quality, and that Creative Businesses will thrive by providing quality jobs for both creatives and support workers. Advocates, policymakers, and investors who care about quality jobs, should find a receptive audience among Creative Business entrepreneurs and owners able to understand the relationship between providing quality jobs and expecting quality output from workers.

Role models among creative businesses

Anecdotally, there are examples of Creative Businesses leading the way in providing quality jobs. Ten percent of B Corporations – for-profit companies certified by the nonprofit B Lab to meet rigorous standards of social and environmental performance, accountability, and transparency — are Creative Businesses in the United States.

A handful of case studies from traditional job quality research highlight Creative Businesses: four of the Pioneer Employers profiled by the Hitachi Foundation were culinary arts businesses, Steven Dawson’s research highlights Universal Woods³² and Opportunity Threads,³³ and Creative Businesses, EILEEN FISHER, Patagonia, Etsy, and Ben & Jerry, adhere to the American Sustainable Business Council’s Principles of High Road Employers.

The Role for Impact Investing

As the creative economy grows there’s every reason to believe employment in the creative economy will grow too. Infusing the creative economy during this growth phase with values-driven capital that prioritizes good jobs over mere job growth will influence the creative economy’s growth trajectory. That means there is an opportunity to influence the structure and nature of work in the creative economy for creative workers and support workers.

Impact capital can reward companies that treat workers well and can ensure the future creative economy is inclusive, equitable, and sustainable. Impact investors can influence the structure of the creative economy as it grows. Once the creative economy is large and entrenched, it will be more difficult to re-make the creative economy to deliver positive social impact, including quality jobs.