In Policies for boosting arts demand I build on my argument that Australian cultural policy needs more demand-side policies. The case is based on the observation of recent data on the Australian cultural sector and some simple economic supply and demand modelling. This post supplements these articles by explaining the modelling process and reasoning that underpin them. This is a rough draft – I welcome comments or suggestions.
Recent data suggests that the Australian arts sector is grossly ‘oversupplied’. In the first decade of the century, Australian participation in creative arts work increased dramatically – in some arts activities it more than doubled or tripled! At the same time, artists’ relative incomes have declined. The Census, for example, shows that the full time incomes of artists dropped by $4,000 relative to other professionals. The figure below puts the two trends together to illustrate how dramatic the inverse relationship has been between involvement in creative arts practice and artists’ incomes.
These are classic signs of a sector straining under the weight of labour supply: increases in labour supply tend to reduce wage rates, which is likely to be reflected in declining incomes. Australia’s cultural policies predominantly work on stimulating supply, and so are likely to have made matters worse. Continue reading