The Arts, Culture, and Child Care: Good for Business and Everyone’s Business

The threat of funding cuts to the National Endowment for the Arts (NEA), National Endowment for the Humanities (NEH), Corporation for Public Broadcasting (CPB), and other arts agencies provides an opportunity to highlight the frequently overlooked value of the arts and culture industry to U.S. business and the economy. As an arts education organization that focuses on early childhood, we also cover in this post the similar way in which the child care industry (of which early childhood centers are a large component) makes a substantial—though often unrecognized—business and economic contribution to our nation.


Arts and Culture Industry

The benefits of arts education programs for children are far-reaching. We have previously discussed compelling reasons to value arts education and the power of the arts to turn around struggling schools. In addition to those and other benefits, the arts and culture industry has a positive economic impact that the U.S. Bureau of Economic Analysis (BEA) describes as “easy to miss.”

The NEA, NEH, and CPB account for a mere 0.02% of federal spending. By contrast, BEA’s statistics show that in 2014, arts and cultural activity:

  • Accounted for 4.8 million wage and salary jobs across the nation

  • Comprised 4.2 percent of our nation’s gross domestic product (GDP), or $729.6 billion, contributing more to GDP than the construction ($586.7 billion), and transportation and warehousing ($464.1 billion) industries

  • Made a larger contribution to GDP than 45 states, including Pennsylvania ($663 billion) and New Jersey ($537 billion)

Further, the arts and culture industry benefits taxpayers throughout the United States—not just in large coastal cities like New York and Los Angeles. As the BEA’s Employment Location Quotient Index map shows, the arts and culture industry provides a greater proportionate share of jobs in Wyoming, Utah, and Colorado than it does nationally. The industry also generates significant event-related commerce for other industries such as food, lodging, and transportation.
 

Child Care Industry

Similarly, the child care industry provides easily overlooked, widespread economic benefits that sharply exceed what the U.S government spends on the industry. As we have highlighted previously, the economist James Heckman has written at length about the public impact of quality early childhood development programs, including reductions in health care costs and crime. Furthermore, a 2015 report commissioned by the Committee for Economic Development states that while total federal and state government provided $15.8 billion in child care subsidies in 2012-2013:

  • In 2012, more than 768,500 child care facilities produced revenue totaling $41.5 billion and employed 1.57 million wage and salary and self-employed workers in the U.S.

  • Service industries of comparable size to the child care industry in 2012 included women’s clothing stores ($43.1 billion), waste collection ($41.3 billion), and home furnishing stores ($40.4 billion)

  • The child care industry supported another $41.6 billion in “spillover” (spending) in other industries in 2012: $17.8 billion in “indirect” activity from the child care industry’s purchases of goods and services from other industries and $23.8 billion in “induced” activity from consumer spending out of child care wages and salaries.
     

Conclusion

The arts, culture, and child care industries have far-reaching business and economic value, just as industries like construction, transportation, and retail do. Moreover, the arts, culture, and child care industries yield significant benefits beyond their cost to the federal government in the form of jobs, increased commerce, and reduced costs in other areas. Their benefits extend not only to direct producers and consumers of these industries such as artists, arts patrons, and parents, but also to other industries, and to taxpayers across our entire nation—which makes them both good for business and everyone’s business.