Statement of the Hon. Dean Phillips on The Power, Peril, and Promise of the Creative Economy

First, thank you to all our witnesses for being here today. It's a pleasure to have such a talented and accomplished group of witnesses representing the arts sector. As you can see, I am sitting in for Chairwoman Velázquez who was unable to chair this hearing today.

The arts sector employs nearly 5.2 million Americans and contributes $919 billion to the economy annually. In my Congressional district, the influence of the creative economy is all-over. Writers, photographers, musicians, and designers launch small businesses, employ workers, and help make Minnesota great through their art.

But the impact of the arts economy isn't confined to America's largest cities. It's evident in every part of the country. America's 675,000 art-centered businesses are present in each congressional district. Unfortunately, the pandemic has touched nearly every business in the arts economy.

Creative businesses and workers usually rely on in-person gatherings and live events to sustain themselves. However, as the virus spread throughout the country, leading to Americans staying home and socially distancing. Ninety-nine percent of entertainment productions canceled events throughout the pandemic, resulting in a loss of $557 million in ticketed admissions. At the height of the pandemic, sixty-three percent of creative workers experienced unemployment, and ninety-five percent lost creative income.

The live events industry is a crucial component of the creative economy that has struggled greatly throughout the pandemic. The industry comprises not only theatres and music venues, but also musicians and performers and those that support live events such as event planners, caterers, designers, and so much more. These workers and small businesses have seen precipitous declines in revenue due to the ongoing COVID-19 pandemic and related public health concerns, with countless events and gatherings being canceled or delayed for the third year in a row.

To help mitigate the impact of the pandemic on this industry, Congress created the Shuttered Venue Operators Grant program - or SVOG, as many have come to know it. To date, the program has delivered over $13 billion in grants to struggling venues. This funding helped many businesses - including several in my district - avoid permanent closure.

However, SVOG was not accessible to the many independent contractors and small business owners that comprise the broader live events industry, leaving them out in the cold. Last August, I held a listening session with business owners in the live events industry in Minnesota and heard heartbreaking stories of dreams delayed, and hardships faced. Five months later, Congress has yet to take action.

It's crucial that we pass additional small business targeted relief to help those small businesses most impacted by the ongoing pandemic, including those in the live events industry. These funds would help business owners keep their doors open and workers employed - and it would help strengthen our economic recovery too, with the understanding that arts and culture are the second-highest sector for value added per dollar in the U.S. economy.

It is important to note, the benefits of the arts go well beyond the economy. They have a substantial impact on our country's social, civic, and cultural well-being. Alongside preserving and celebrating culture, research shows that as creative and artistic enterprises arise, ancillary businesses are more likely to form around them creating jobs and stimulating local economies.

But the wounds the pandemic inflicted on the arts economy are deep and painful. If we want the industry to return to pre-covid trends and continue to be an economic engine for local communities, these businesses need more support and investment. Investing in the creative economy will help this crucial sector recover while also fueling overall economic growth.

So today, I hope this hearing allows us to examine the challenges that those operating in the creative economy continue to face. I also look forward to discussing policies that can help support this prominent sector.

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