{"id":1320,"date":"2014-06-02T05:33:01","date_gmt":"2014-06-02T12:33:01","guid":{"rendered":"http:\/\/www.artsjournal.com\/worth\/?p=1320"},"modified":"2014-06-02T05:33:01","modified_gmt":"2014-06-02T12:33:01","slug":"film-tax-credits-jobs-and-lost-incomes","status":"publish","type":"post","link":"https:\/\/www.artsjournal.com\/worth\/2014\/06\/film-tax-credits-jobs-and-lost-incomes\/","title":{"rendered":"Film tax credits, jobs, and lost incomes"},"content":{"rendered":"

\"the-last-picture-show-poster\"<\/a>This morning artsjournal.com<\/a> links to yet another chapter in the endless series of different states, provinces and countries deciding how much in tax credits ought to be granted to commercial film and television production, because: jobs. I recently posted re Maryland here<\/a>. Today, Hollywood Reporter, er, reports<\/a>:<\/p>\n

\n

the California Film and Television Job Retention and Promotion Act of 2014 was approved by the state assembly Wednesday by a unanimous vote of 71-0.<\/p>\n

The legislation, authored by Assemblymen\u00a0Mike Gatto<\/strong>\u00a0(D-Los Angeles) and\u00a0Raul Bocanegra<\/strong>\u00a0(D-Pacoima) had more than 60 co-authors.<\/p>\n

However, there is still no specific amount of money the state will put up for the new legislation, which would replace the current program that allocates $100 million a year, which has not proven to be enough to stem the flow of production to other states and countries that offer even greater incentives. …<\/p>\n

\u201cWe can\u2019t sit by and watch a $17 billion dollar a year sector of our economy leave California,\u201d said Bocanegra. \u201cThis expanded and improved program will go a long way toward making California more competitive with other states’\u00a0programs.\u201d<\/p>\n

Between 2004 and 2012, California lost more than 16,000 film- and television-industry jobs, according to the U.S. Department of Labor, resulting in more than $1.5 billion in lost wages and economic activity.<\/p><\/blockquote>\n

Why this<\/em> industry deserves tax credits for production and jobs in ways that other industries do not is not made clear. But let me just pick on one particular aspect of the story, from the last paragraph I quote, since it gets to the heart of what is wrong with ‘economic impact’ studies.<\/p>\n

Suppose I am a computer technician working in the film industry, earning $100,000 per year. Suppose I then switch jobs, and begin working as a computer technician in the transportation sector, still earning $100,000 per year. The film- and television-industry has lost 1 job. But California has had no loss in wages and economic activity.<\/p>\n

I trust the Department of Labor estimate of the decline in employment in the industry from 2004 to 2012. But that does not<\/em> translate into lost wages and economic activity (and the Dept of Labor would not make that claim – it is coming from partisan analysis). People do other<\/em> jobs. The fundamental (and it is<\/em> fundamental) error made in economic impact calculations is the assumption that were it not for the particular spending under analysis, the wages and income would simply be lost from the region.<\/p>\n

But it wouldn’t be. People do other things than work in media production. People move between sectors. Numbers in these studies are presented as factual when the truth is they are generated through faulty reasoning.<\/p>\n","protected":false},"excerpt":{"rendered":"

This morning artsjournal.com links to yet another chapter in the endless series of different states, provinces and countries deciding how much in tax credits ought to be granted to commercial film and television production, because: jobs. I recently posted re Maryland here. Today, Hollywood Reporter, er, reports: the California Film and Television Job Retention and […]<\/p>\n","protected":false},"author":3,"featured_media":1322,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[26],"tags":[],"class_list":{"0":"post-1320","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-issues","8":"entry"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/06\/the-last-picture-show-poster.jpg","jetpack_shortlink":"https:\/\/wp.me\/p3dIW5-li","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":1067,"url":"https:\/\/www.artsjournal.com\/worth\/2014\/02\/today-in-film-tax-credits\/","url_meta":{"origin":1320,"position":0},"title":"Today in film tax credits (Updated December 2, 2014)","author":"Michael Rushton","date":"February 21, 2014","format":false,"excerpt":"It never ends: production companies asking for, and getting, tax credits for local production when the economic case is cloudy, to say the least. The Washington Post reports: A few weeks before\u00a0Season 2 of \u201cHouse of Cards\u201d\u00a0debuted online, the show\u2019s production company sent Maryland Gov. Martin O\u2019Malley\u00a0a letter with this\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"created six thousand jobs","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/02\/Maryland-film-tax-credit.jpg?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":1148,"url":"https:\/\/www.artsjournal.com\/worth\/2014\/03\/tax-relief-for-british-theatre\/","url_meta":{"origin":1320,"position":1},"title":"Tax relief for British theatre (updated)","author":"Michael Rushton","date":"March 20, 2014","format":false,"excerpt":"The budget just announced by the British government provides for significant tax relief for live performing arts. Here are reports from The Stage, The Telegraph, and The Independent. The Stage gives details as follows: The scheme will mean producers are able to claim up to a 25% tax rebate on\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"how shall we spend it?","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/03\/Blithe-Spirit-at-the-Schu-002.jpg?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":1310,"url":"https:\/\/www.artsjournal.com\/worth\/2014\/05\/why-tax-breaks-for-commercial-theatre\/","url_meta":{"origin":1320,"position":2},"title":"Why tax breaks for commercial theatre?","author":"Michael Rushton","date":"May 23, 2014","format":false,"excerpt":"The Stage reports (and I repost the story in full here): Tax breaks for the theatre industry to be introduced this autumn could bring in \u00a3100 million for commercial theatre and \u00a320 million for touring productions in coming years, Arts Council England\u2019s chair PeterBazalgette has said. He said the initiative\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"coherent arts policy","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/05\/Pound-Sterling-Progress.jpg?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":1468,"url":"https:\/\/www.artsjournal.com\/worth\/2014\/08\/doras-amazing-tax-credit-adventure\/","url_meta":{"origin":1320,"position":3},"title":"Dora’s amazing tax credit adventure","author":"Michael Rushton","date":"August 18, 2014","format":false,"excerpt":"The New York Times Arts page reviews the new adventure of Dora the Explorer, now a little older, and starring in 'Dora and Friends: Into the City!', which apparently looks pretty suburban. And Dora's talking backpack is full of dollars, courtesy of New York state taxpayers. Variety reports: While states\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"indeed","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/08\/swiper-265x300.png?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":3049,"url":"https:\/\/www.artsjournal.com\/worth\/2024\/07\/does-it-matter-if-the-subsidized-arts-are-mostly-attended-by-the-well-off\/","url_meta":{"origin":1320,"position":4},"title":"Does it matter if the subsidized arts are mostly attended by the well-off? 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