Despite digital media growth, L.A.’s ‘creative economy’ lost jobs in 2018. Here’s why

Despite a boom in television and digital media production, employment in Los Angeles’ so-called “creative economy” shrank in 2018, buffeted by long-term job losses in the fashion and toy manufacturing industries, a new report says.

L.A.’s creative economy directly employed 402,465 workers in 2018, down 0.1% from 2017, according to the annual Otis Report released Wednesday.

The study, commissioned by the Otis College of Art and Design, tracks employment across a swath of creative industries, including television and film, music, fine arts, fashion and toy manufacturing.

The employment decline was led by a long-term contraction in the region’s fashion industry, including apparel and cosmetics manufacturing, which fell 3.8% in 2018 versus 2017, the report states. Creative goods and products, which includes toy manufacturing and industrial design, dropped 1.6%.

The job losses come as manufacturers continue to outsource more work to China and other lower-cost countries.

However, overall employment in the creative industries in L.A. County rose by nearly 2% between 2013 and 2018, according to Beacon Economics, an independent research firm that authored the Otis report.

Within that broad category, the entertainment and digital media sectors generated most of the jobs, employing 258,000 wage and salary workers in 2018, or 64% of the total creative workforce in the county, with an average wage of $148,000 (the county average is $68,000). Those sectors added 18,000 jobs in six years as Netflix and other tech giants expanded into L.A.

“Since the Great Recession, the creative economy has continued to be a backbone industry in California,” said Adam Fowler, director of research for Beacon. “With the rise of new digital platforms and distribution channels a lot of that ecosystem is converging.”

Sound recording in California experienced huge growth over the last five years, expanding its workforce by 22%, outpacing New York State’s 9% growth during the same period. The report’s authors cited L.A.’s burgeoning podcast ecosystem, which includes Crooked Media, Wondery and podcasting network the Ringer, which was recently acquired by Sweden’s Spotify.

Another bright spot was fine arts and performing arts, a category that includes museums, fine art schools and musical groups. Although it is one of the smallest creative industries in L.A., employing 17,500 workers in 2018, it was the fastest-growing, adding 4,000 jobs during the six-year period. Museum employment increased 30% and dance companies added 104 workers from 2013 to 2018.

The report also highlighted the shift toward so-called gig work. The county’s share of wage and salary employees in creative industries declined from 46% to 39% from 2008 to 2017, while the share of contractors increased from 40% to 43%.

That could be important when considering the effect on Hollywood and other creative businesses of Assembly Bill 5, the controversial legislation that took effect this year that makes it harder for companies to treat workers as independent contractors.