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Counting on the arts as economic drivers is a dicey proposition

We shouldn’t delude ourselves into believing that if we merely concentrate on being hip and art-driven, we will attract a wealthy and educated creative class.

intermedia arts mural
Art confers plenty of benefits on the Twin Cities, but significant economic growth probably isn’t one of them.

A while ago, a rather eminent editor said to me — with a sneer, “I love the way you people atMoney magazine quantify the unquantifiable, like ‘How much is my spouse worth?’ “

In my 14 years at Money, I am pretty sure that we never tried to tell readers how to calculate the monetary value of their marriage — except maybe for the purpose of buying life insurance. But this snarky editor did have a point. These days, there seems to be a requirement that every activity under heaven prove its financial value.  

I don’t know where this mandate is coming from. Maybe it’s due to an outpouring of MBA graduates who feel the need to bring their spreadsheet know-how to bear on all that they touch. Or perhaps the veneration of business success has so bent our minds to the importance of the Almighty Buck that we have come to think that even qualitative elements — like vitality, creativity, meaning and so on — can and should be measured and assigned dollar values.

In recent years, the urge to measure has extended to “the arts.” (The term is pretentious, but it’s the only one that scoops up theater, music, dance, painting, sculpture and so on in one simple phrase.) In its fourth Arts and Economic Prosperity Report [PDF], Americans for the Arts, a national nonprofit advocacy organization, points out that of course, the arts beautify our towns and provide enjoyment and inspiration to citizens, but adds that it’s also nice to know that the industry generates $135.2 billion a year in economic activity (not too shabby in a $15 trillion economy), supported 4.1 million full-time jobs and produced $22.3 billion in state, local and federal tax revenues, nearly five times the government expenditures for the arts.

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“Business and elected leaders need not feel that a choice must be made between arts funding and economic prosperity,” declared AFA, sounding a lot like a booster from a local Chamber of Commerce. “This study proves that they can choose both. Nationally as well as locally, the arts mean business!”

‘The Artistic Dividend’

That arts boosterism has some theoretical legs too. In 2003, Ann Markusen, a University of Minnesota economics professor, and David King in a paper called “The Artistic Dividend” [PDF], attempted to show that arts activity is not just the icing on the cake of business but “a major and varied contributor to economic vitality … the productivity of and earnings in a regional economy rise as the incidence of artists within its boundaries increases, because artists’ creativity and specialized skills enhance the design, production and marketing of products and services in other sectors.”  

The fact that the Twin Cities have more artists per square foot than most other U.S. cities, says Markusen, “is one reason we are not losing population.”

Published around the same time, “The Rise of the Creative Class,” by Richard Florida, then a Carnegie-Mellon professor, hypothesized more broadly that if cities could attract the hip and highly educated crème de la crème of society —pretty much anybody who was creative, including software developers, architects, biomedical researchers, financiers and other innovators — business and growth would follow. It’s a mangled Field of Dreams strategy: Gaggles of laptop toting, Starbucks-drinking go-getters will come and then maybe they’ll start businesses or maybe some cool companies will come.

In a more recent work, “The Great Reset,” Florida kissed off this proposition, claiming that the recession had sent some cities into such a steep decline, there was no helping them. Despite that, cities across the nation have commissioned studies to measure their creative class and to figure out what to do if they don’t have a big enough chunk of it.

Descriptive index for Minneapolis

Minneapolis, never one to be left behind by the latest trend, last year set up an office of Arts, Culture and Creative Economy headed by Gülgün Kayim.  Recently it issued the city’s very first Creative Vitality Index Report [PDF]. Spoiler alert: We are ultra-artsy.

The CVI was developed by the Denver-based Western States Arts Federation (WESTAF), which says it is “dedicated to the creative advancement and preservation of the arts.” Bryce Merrill, senior associate director, says that the purpose of the index is descriptive of the role that the arts play in the local economy.

In contrast, input-output studies showing that the arts — or anything else, like a football stadium, for example — actually grow an economy “come more from advocacy than accuracy,” Merrill says. Unless they are really rigorous and, of necessity, really expensive, such analyses are superficial glosses used to sell legislators and citizens on particular projects. Their fallacy? While a stadium or a series of performances by Beyoncé and Jay Z (yes, they’re artists, you snobs) can draw dollars from residents and visitors, that money would probably have gone to other entertainment venues (like movie theaters or circuses) in the same city if there had been no stadium or Beyoncé-Jay Z concerts. Ergo, the city would experience no net financial gain — or only a very marginal one.

Ergo, WESTAF has stuck to a descriptive index that’s basically a mashup of data streams — the number of jobs in highly creative occupations like dancer, fashion designer, sound engineer, actor and so on with per capita spending on the arts by audiences and nonprofits. Its appeal to the cities and states that have used it (Oregon, Washington, Nashville, Philadelphia, Raleigh-Durham) is that it can be compared across cities and repeated from year to year — so policymakers can see whether their town or state is getting more or less artsy.

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Sixth strongest arts community in nation

The verdict? Minneapolis has an index of 1.506, which makes it the sixth strongest arts community in the nation after New York; Washington, D.C.; L.A.; San Francisco; and Boston. It’s four and a half times the national average. Supposedly, the arts inject $700 million a year into the Minneapolis economy and support 20,000 jobs. Kudos to us. We’re up there with the guys who have the Kennedy Center and Broadway and the Boston Symphony Orchestra.

One problem: Economic activity in the entire metro measured about $192 billion in 2012, according to the Brookings Institution. Arts would make up less than a half percent of the total. If you toss in Bloomington and St. Paul, possibly doubling that $700 million, the arts would still make up less than 1  percent of economic activity.

I’m all for the arts. (Who would be agin’ em?) The ability to attend plays, concerts, readings and shows practically every night of the week is one of the great joys of living here. But we should not delude ourselves into believing that if we merely concentrate on being hip and art-driven, we will automatically attract a wealthy and educated creative class that will in turn generate commerce and jobs.

Companies move to places that offer low costs and a work force that has the skills they need. People move to places where there are jobs, family and friends. Plenty of folks in the Twin Cities can’t — but would like to — count themselves among the working class. Maybe we should focus on them.