Until recent times, public relations practitioners have been in the position of having to build a case for the value of their work in the overall business marketing mix. Thankfully, that debate has been largely put to rest, as more and more organizations (corporate, nonprofit and academic) have actually elevated its importance in driving business, not just reputation. A compelling case can also be made for the value that the public relations industry brings to a city’s financial well-being, particularly here in Los Angeles.
Before 2010, no study had been done to look at the economic impact of the profession on a city as a contributing industry. That year, the L.A. chapter of the Public Relations Society of America embarked on a study in partnership with the Los Angeles County Economic Development Corp.’s Institute for Applied Economics to look at the jobs and revenues created by the public relations industry here in Los Angeles for calendar year 2008. We recently repeated that survey, looking at calendar year 2013, when the most recent data were available, and now have a comparative analysis.
The findings demonstrate that our industry makes significant contributions to Los Angeles County’s economy to the tune of $1.4 billion in the areas of jobs, spending, and wage and tax revenues, and that impact is growing.
In 2013, there were 9,450 public relations professionals employed across a wide range of industries in the county and earning a total of $788 million. Most notable, the 3,760 employees on the agency side of the business actually supported a total of 7,480 jobs in the county as a result of direct, indirect or induced effects of public relations employment, an increase of 16 percent compared with 2008.
These agencies and independent consultants spend money on goods and services, such as office supplies, rent and insurance, and the wages they pay to their employees support household spending on groceries, clothing and medical care. This creates a ripple effect that helps support additional industries in the region, making the total economic impact of the public relations industry larger than just its direct activity.
Expanded opportunities
While public relations jobs in the county have remained relatively flat from 2008 to 2013, the opportunities have expanded to include content development and paid or owned media, and its earning potential has grown. L.A.-based PR workers earned an average annual wage of $86,421, which is 57 percent above the average in wage-paying jobs in the county. Public relations managers earned an average of $118,560 in 2013, which is higher than the national average wage for PR managers of $111,260. Total annual earnings for public relations professionals in the county across all industries reached $788 million in 2013.
Public relations agency jobs alone generated a total labor income (including wages and benefits) of $510 million, more than a half-billion dollars. This translates to significant state and local tax revenues – $52 million in 2013, up from $45 million in 2008. The tax revenues are derived from the income taxes and property taxes paid by public relations workers and firms, and the sales taxes result from the purchases of goods and services by PR professionals and by the households whose wages are supported by the industry.
Public relations long ago shed its image as an ancillary, nonrevenue-generating aspect of business. In addition to the value employers place on the contributions of public relations professionals, this industry has assumed an important place in the Southern California region’s economic picture, moving from its entertainment roots to a significant role in virtually every industry and contributing more than $1.4 billion to the county’s economy each year.
Jean Gonsoulin is president of the L.A. chapter of the Public Relations Society of America.
