New LAEDC Report Shows Further Declines from Runaway Production

New LAEDC Report Shows Further Declines from Runaway Production


A brand new report released this month from the Los Angeles County Economic Development Corporation (LAEDC) paints an impressive picture of the entertainment industry and its economic impact in Los Angeles County.  Indeed, the combined number of direct entertainment industry jobs for both salaried positions and free-lance professionals was 247,000 in 2011.  According to the LAEDC, this makes the entertainment industry one the largest industries in the county:

The entertainment industry employed nearly 162,000 wage and salary workers in Los Angeles County during 2011, equivalent to nearly 5 percent of the 3.3 million private sector wage and salary workers in the county. In addition, the industry employed more than 85,000 free-lance professionals and other independent contract workers.  With a combined total of 247,000 workers, this is one of the largest industries in the county.

To be precise,  the entertainment industry is now the fifth largest industry in Los Angeles County in terms of employment (and either second or third largest in terms of total industry impact).  The jobs held by workers in the entertainment industry support an additional 339,000 indirect and induced jobs in Los Angeles County, for a combined total of 586,000 jobs.  The economic impact from those jobs, wages and spending is staggering:

Film production (motion picture, video and related categories) is one of several sectors that comprise the “entertainment industry”, but is by far the largest in terms of jobs and payroll:

The Motion Picture, Video and Related sector is by far the largest sector of the entertainment industry. With 117,841 jobs, it makes-up nearly 73 percent of total industry employment. This sector accounted for 4,927 establishments, just over a third of the industry total, and $11.3 billion in payroll in 2011, which was 60 percent of total entertainment industry payroll.

If these seem like impressive numbers, that’s because they are.  But a closer look at the data offers nonetheless some cause for concern.  Since 2004, employment in the Motion Picture and Video Related Subsector declined 12.1 percent with over 16,000 jobs lost.  Just look at how the blue bars in this chart fluctuate even as other colors remain somewhat constant:

What is causing the decline?  As Film Works has maintained since the beginning, jobs are being lost because of runaway production fueled by film incentives in countless other states and nations.  Los Angeles County’s share of Motion Picture and Video Production jobs was 60 percent in 2004; by 2011, it was barely over 50 percent.   According to the LAEDC, Los Angeles County started losing jobs at “the same time other states were implementing film incentive programs”:

Arguably, runaway production has had a deleterious effect on industry employment.  Looking exclusively at the Motion Picture and Video Production subsector… employment in Los Angeles County peaked in 2004 at 118,200 jobs… by 2011, the subsector lost 16,100 jobs (a decrease of 13.6 percent), falling to 102,100 jobs and 51 percent of the nation’s 199,200 subsector employment.

In order to stop further erosion, the LAEDC said it is vital for a program like the California Film & Television Tax Credit to be in place to prevent runaway production to other states or countries and preserve “a critical mass of creative workers”.  We couldn’t agree more.

FilmL.A. and Film Works commend the Hollywood Chamber of Commerce for commissioning the LAEDC report.  Those with an interest in viewing the report can find it on the front page of the Chamber’s website.

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