Tennessee’s Fiscal Responsibility Sets Nashville Music Scene Apart From New York, Los Angeles

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Posted by Karl Abramson on Thursday, May 6th, 2021, 2:04 PM PERMALINK

The vibrant music scene in Nashville, Tennessee has earned the area a well-deserved nickname: “The Music City”. While the origins of the moniker are unknown, it is believed that the first person to call Nashville “Music City” was Queen Victoria when she remarked that the Fisk Jubilee Singers, an African American choral ensemble from Fisk University in Nashville, had such beautiful voices they must have come from “Music City”.  

Perhaps a more fitting nickname, however, would be “The City of Music and Low Taxes”, as the incredible success of Nashville’s music industry is aided by Tennessee’s zero personal income tax and low regulations that have allowed Nashville’s music scene to be the fastest growing in the country by a landslide. 

The total economic impact of the music industry in the United States has increased by 9.2% since 2013, totaling more than $500 billion dollars a year. However, this growth is dwarfed by the massive success of Nashville’s music industry which has grown since 2013 by a staggering 43%. 

The music industry in Nashville contributes 80% more today to the Tennessee’s gross domestic product (GDP) than it did in 2013. This has given Nashville the opportunity to improve its already strong quality of life as tens millions of dollars each year in music-related tax revenue goes toward funding public works programs, community safety initiatives, and wage hikes for K-12 teachers. 

Compared to the ten largest cities for music-related jobs in the U.S., Nashville ranks first for net job growth as well as overall growth rate. In 2012, Nashville’s music industry employed 27,000 people. As of 2019, it had swelled to 41,000. Further, these jobs are incredibly well-paying. The median annual earnings for music and entertainment industry jobs in Tennessee is over three times the annual median earnings nationwide for all employment. 

Even though New York and Los Angeles employ more total people, Nashville’s per capita music industry employment is over three times that of Los Angeles’ and nearly four times higher than New York’s. More striking, however, is the disparity in job growth. Between 2009 and 2019, jobs in Nashville’s music industry have increased 31%. In Los Angeles, industry job growth is 2%. In New York, there has been a paltry net increase of ten total jobs over the ten-year period.  

The Recording Industry Association of America published a report on Nashville’s music industry, attributing its success to “the entrepreneurial drive that has characterized Nashville’s music industry from the start”, adding that it, “continues to be the core of this unique industry cluster.” This is largely due to Tennessee’s fiscally responsible economic policies that promote innovation and entrepreneurship through low taxes and reasonable regulations. 

In addition, Tennessee’s cost of living is the second lowest in the country, an attractive feature for young singers, songwriters, and producers looking to make a living in music or entertainment. Meanwhile, New York’s cost of living is third highest in the nation, just barely beating out California, which ranks second. The tax burden in Tennessee is also the second lowest in the country. Sales and property taxes are minimal, and the state’s personal income tax rate is zero.  

The Tennessee Entertainment Commission advertises the advantages of moving a music or entertainment company to Nashville. One of those advantages is free use of state-owned property for shooting music videos or feature films. As maintenance of this property is paid for by taxpayers, this is a simple, common sense policy that helps set Tennessee apart from its competition. Another noted advantage is Tennessee's status as a right-to-work state. Unionized and non-unionized workers are guaranteed equal treatment under the law, ensuring freedom of choice for workers considering unionization. 

Tennessee has prioritized fiscal responsibility, allowing Nashville’s music industry to grow in unprecedented numbers. Even though the Covid-19 pandemic has done considerable damage to many small businesses across the U.S., with the music industry being no exception, experts predict this downturn will be short-lived. While revenues are understandably down in 2020, the industry is poised for, and expected to have, a robust comeback.

The Music City has been an integral part of the American music and cultural experience for over a century. With the assistance of sound fiscal policies that make Tennessee one of the most economically competitive states in the nation, Nashville’s music industry will certainly continue to be a hub for musical innovation for decades to come. 

Photo Credit: munabril

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