California's Fine and Performing Arts Hit Hardest During Pandemic Says 2022 Otis Creative Economy Report
Jose Luis Valenzuela thought the Latino Theater Company would close for six weeks in 2020. Then, it became three months. It finally turned out to be two years. With those couple of years, said LTC art director, also went two years' worth of revenue.
“For artists and others, like people that we hire, you know, they just work gig by gig in a way,” Valenzuela said. “So it was devastating. They had to pay their rent. They had to eat.” In yet another blow to its finances, two days ago, the company was forced to cancel its return to in-person performance due to a COVID-19 outbreak during its production of "SHE." According to CDC guidelines, rehearsals would have to be suspended for about two weeks — time and finances the company couldn't support. While cast and crew would still be compensated for their work, LTC's plans for a return to stage this April have been scuttled.
This is only the latest in the company's trials during the pandemic. Like many others, the LTC tried to host digital shows, but the theater that typically held a staff of 300 found it difficult to make a profit after crossing over to the new format and ended up losing money instead.
LTC wasn't alone in its struggles to stay open during the pandemic. Much of the creative industry in California, and Los Angeles specifically, suffered while the pandemic raged.
The 2022 Otis College Report on the Creative Economy analyzed the impact of COVID-19 on five sectors in California: fine and performing arts, entertainment and digital media, architecture, fashion and creative goods. The report found that employment in these industries dropped a total of 85% from 2007 levels in Los Angeles County, while California employment only grew 15%, down from 22% in 2019.
The fine and performing arts, like LTC, struggled the most in 2020 with the pandemic shuttering concert venues, cultural centers and exhibition spaces. The sector lost a number of the jobs it gained in the past few years, with over 18,000 jobs lost across the state from 2019 to 2020.
Adam Fowler, partner at CVL Economics and a contributor to the report, said that the creative economy report began as a way to advocate for the creative sector following the Great Recession. Though the creative sector suffered economically during the pandemic, Fowler said that the arts remained prominent in California.
For artists and others, like people that we hire, you know, they just work gig by gig in a way. So it was devastating. They had to pay their rent. They had to eat.Jose Luis Valenzuela, art director at the Latino Theater Company
"That's not to say there wasn't kind of a spectrum of impact, but in California, I think almost a fifth of the economy in 2020 was supported through this [creative] activity," Fowler said. "It might not have been out in the world like we normally think of it, but it was still really strong for us here in California."
The average annual wages for the sector actually increased. This likely signals greater layoffs of lower-level workers and the retainment of high-wage executives, skewing the average salary.
Valenzuela said that as the LTC prepared to return to the stage in March 2022, they have struggled to find employees.
"I think a lot of people left the field, you know, and now people, you know, it's hard to find people to come to work," Valenzuela said. "We're all just scrambling, trying to find technicians and trying to find everything inside the theater to reopen, and everything is so much more expensive."
An Uneven Jobs Loss Picture
The job loss in California echoed nationally. SMUDataArts reported that unemployment in the arts and culture sector was double the national average, at 30% early in the pandemic. On average, unemployment in the arts remained 2% higher than the national average throughout the pandemic.
Though the fine and performing arts sector suffered the greatest, the entertainment and digital media sector stayed strong through the pandemic despite production pauses and cinema closures.
Movie theater closures and production pauses caused the sector's performance to dip by 3.3% in 2020, but it continues to employ almost one million workers found mostly in L.A. County and the Bay Area. Fowler said that the job growth in entertainment and digital media is due in large part to the rise of streaming platforms, especially over the last few years.
The comparatively minor decline in the sector mirrors a strong decade of growth, 34.8% according to the Otis report, in digital media and entertainment in California. The sector grew year to year before the pandemic's abrupt halt in movie and television production interrupted this pattern.
In light of the broad reach of digital content, Fowler said he saw potential to use the digital format to fortify other sectors of the arts, especially in the case that something like the pandemic or Great Recession happens again.
"A lot of the business models in the performing arts, it was bodies buying tickets and going to a place," Fowler said. "There's a real desire not to lose the amazing in-person experience, but almost build some firewalls around should something like this happen again, where that work could still be monetized in a way to make them a little bit more resilient."
The Need for Long-Term Additional Support for Creative Economies
Despite these losses, the creative economy still employed around 1.4 million people and supported nearly 4 million workers total in California. Creative industries outperformed other statewide sectors, including government and healthcare, yet the Otis report noted, it doesn't receive the same economic development or policy support.
The California state budget for 2021-22 drew attention for the historic one-time allocation of $616 million to the creative sectors. Though the arts received $873 million in 2018, even before the pandemic, it still ranked 8th in the state's funding priorities.
L.A. County's funding patterns show promise, with the creative sector ranking 4th in funding priorities behind education, health and human services.
Building Buffers to Shield Creative Economies
Going forward, the pandemic and accompanying supply chain disruptions, inflation and labor shortages will rustle the creative economy going forward. The report doesn't predict a totally bleak future and recommends ways to support the creative economy as it faces these obstacles.
One solution suggested including the VFX, post-production, animation and gaming industries in California's film tax incentives. The report also mentioned supporting creative talent by linking public schools, community colleges and the commercial sector as a way to bolster the industry going forward.
Though the report did support short-term fixes like philanthropic support, it stressed the importance of long-term solutions. Creative placemaking is among them, in which historically underfunded areas in L.A. that typically house artists would be simultaneously protected by gentrification and strengthened creatively.
While one-time payments have softened the impact of COVID-19 on creative sectors, according to the report, the state's framework has reached its limit and given the state a chance to position California on top of the creative world again.
There's a real desire not to lose the amazing in-person experience, but almost build some firewalls around should something like this happen again, where that work could still be monetized in a way to make them a little bit more resilient.Adam Fowler, partner at CVL Economics
"One of the things that I think is very interesting and we flagged at the end is that the days of California being on top of the mountain in terms of the world's global creative hub, I think, are in flux now," Fowler said. "There are a lot of jurisdictions around the globe that are really leaning into building out talent, business and other nonprofit infrastructure for these industries."
While SMUDataArts estimated that the unemployment levels in the arts industry returned to pre-pandemic levels at the end of 2021, ticket sales stayed below the pre-pandemic numbers. Yet, Valenzuela remains positive about the industry's future and the future of his own theater.
“We always think theater [people] are the most positive people. I think that the future of theater is going to be great,” Venezuela said. Despite the cancellation of "SHE," LTC continues to work on the rest of its in-person 2022 performance lineup, which includes three world premieres of original works, a presentation from a Spanish theater company and the return of a signature holiday pageant in December. “You know, the LTC is going to be fine.”
