The High Cost of Losing Your Creative Class

When you lose your creative class, you're not just losing artists and their cultural inputs; you're losing the economic ecosystem they create.

Meredith Martin

Mike Moffatt

, and

Sabrina Maddeaux

Aug 20, 2025

Canadian cities are facing a creative crisis. Rising housing costs are driving artists, musicians, designers, and other innovators out — and it’s not just culture that’s at risk.

In this episode, Sabrina Maddeaux and Mike Moffatt break down how losing the “creative class” hurts local economies, tourism, and even a city’s ability to attract tech and finance talent. From the ripple effects on nightlife and small businesses to the loss of vital cultural spaces, we explore why cities can’t afford to price out their creative heartbeat — and what policies could help keep them.

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Below is an AI-generated transcript of the Missing Middle podcast, which has been lightly edited.

Mike Moffatt: So, Sabrina, when you pitched this idea at our weekly meeting, I instantly loved it, but my first thought was, I'm not sure what the audience is even going to know what we mean by the creative class. So when we talk about the creative class, who exactly are we referring to, and how significant is this group?

Sabrina Maddeaux: So the creative class was a term first really popularized by Richard Florida, and it includes not just the obvious artists or musicians, but a broader group of knowledge workers—everyone from architects to writers, designers, the people making video games and so on. In Canada, this represents roughly 30% of our workforce. That's big, obviously, but what makes them really economically important isn't just that sheer size or their individual contributions, but their role in what economists call innovation catalysts. So they create new ideas, products, and cultural assets that drive broader economic activity.

And we know in Canada, innovation is an issue, productivity is an issue, and having a vibrant and thriving creative class drives those things. So in Toronto alone, the Toronto Arts Council says artists contributed around 12 billion a year to the city's economy before the pandemic, but we never made it back to that point. And that's just a more narrow group of artists. So then you broaden that out to the entire creative class, and you can see how big the impacts are.

Now, when it comes to housing affordability, which impacts everyone, there is something uniquely devastating about how it impacts creative workers. Unlike other professions that have seen some wage growth, many creative careers have been even more outpaced by housing costs. But it's not just that. The nature of creative work also makes them more vulnerable to these cost increases.

Now, Mike, can you walk me through how exactly housing costs hit the creative class differently than other workers?

Mike Moffatt: Yeah, certainly, this has impacted all young middle-class workers in our big cities, but it disproportionately affects the creative class.

Partly it's that many of those occupations have had wage growth that has been slower than average for other groups. So, it makes the distance between home price growth and wage growth an even larger gap. But an even bigger issue is the precarity of work.

I’d like to bring this back to TVs and movies. Think of the show Big Bang Theory, where you have an actor, Penny, who, when she's not doing a TV show or a movie, works at the Cheesecake Factory. And this is very, very common. So if those kinds of server jobs aren't paying well, then it's harder to be a creative class person in these cities because you need that income to fill in those gaps.

Even if we go beyond actors, musicians, and so on, a lot of the game designers and other groups often work for startups. And those startups can often fail. These workers are forced to jump from company to company to company. There can be periods of layoffs. And that's not necessarily anything new. I've seen our friend, Jason Slaughter from Not Just Bikes, talk about his experiences during the dot-com crash. And that's common in these fields. And it's a little bit easier to navigate than 25 or 30 years ago when home prices and rents were a lot less than they are today. So house prices and rents do disproportionately affect the creative class.

So, it's been hard for this group to make it in big cities like Toronto. You see this exodus of young creative class persons to less expensive places. You're London's, you're Windsor's, you're St. Catharine's, Niagara's. And many folks, like me, who grew up in London, might not be going to Toronto in the first place because they can't afford it.

The immediate reaction you get from people is often that, well, “that's just gentrification,” or that “cities change”. And of course, these people should move to other cities if they can't make a go of it in Toronto. But you've argued that that has larger systemic effects, that we shouldn't just be looking at this at the individual level, or even necessarily just at the cultural level. What this means for the culture of Toronto is quite a bit, but you've also argued that there are real economic consequences when a city systematically prices out its creative class. So could you walk us through what those economic consequences are?

Sabrina Maddeaux: Yeah, so it's a twofold problem in that you do have the creative class who is leaving, or not coming to begin with. But then you also have people who are just leaving the creative class altogether, because it's not possible to afford rent if you're an artist or a musician or a writer. So you're just straight up losing those creatives; they're not even going somewhere else.

This is actually a more serious problem than most people realize. When you lose your creative class, you're not just losing artists and their cultural inputs; you're losing the economic ecosystem they create.

Creative workers are what economists call economic multipliers. They start small businesses, they create demand for unique retail and hospitality services, and they also help attract the kind of talent that drives innovation in other sectors. So it's very common when you see artists leave a neighbourhood, it's often also followed by a departure of entrepreneurs, tech workers, and other professionals, especially young professionals, who were drawn to that creative energy and that vibrancy to begin with.

You end up with what Richard Florida calls vanilla cities. Places that might be wealthy on paper, but they lack that diversity and cultural dynamism that drives long-term economic growth. These aren't places people actually want to live, or go out after work anymore. So it creates a bigger ripple effect.

But you're the resident economist here. What's your perspective on the economic impacts of the city losing its creative class?

Mike Moffatt: Well, I think it's all of those things. And you know, I think we should recognize that it affects, you know, big companies as well, that a lot of the creative class folks might, you know, be artists and musicians, but have day jobs in, you know, marketing, in a big kind of Bay Street or Wall Street type firm. So you know, those larger companies are losing that talent.

You certainly get better ideas together when you have a lot of creative people in the same space who are sharing ideas with each other and building off of each other and so on.

There's also a big impact on the tourism sector. If a city doesn't have a great music scene, a great art scene, theatre, and so on, it's not going to attract as many tourists. So it does have all of these ripple effects, where if you're missing this one really key industry, it affects all of these other industries around it.

Sabrina Maddeaux: For sure. I mean, when you even talk about the question of why haven't downtown cores come back the way they were before? Or cities like Ottawa bring on a nightlife mayor? Well, all of that is often driven by the creative class, which makes going out after work or coming to the city for nightlife much more interesting.

And there's also an infrastructure question I want to touch on, because when creatives get priced out, we're not just losing individual artists, we're losing that ecosystem of, you know, concert venues, studios, galleries, and creative spaces that support them. So how does that loss also compound over time?

Mike Moffatt: Well, absolutely. It slows the growth of the sector. Like, if you look at one of the reasons why in the late 80s, early 90s, Seattle had such a great music scene, they had a lot of these relatively inexpensive clubs, inexpensive real estate, where people could go, play for a small crowd and so on, and build it up that way. You saw that in London, England, in the 60s and 70s. You had all these great bands like Queen and Led Zeppelin and The Who - they all got their start in these little, tiny, rundown clubs that were very inexpensive. So when those kinds of venues close, because of rent increases, and those rehearsal spaces get converted into condos - yes, we need condos, we need places for people to live, but you're destroying decades worth of accumulated creative capital.

It's not that much different than if you tear down a manufacturing facility. Let's say you have a big automotive assembly plant in a community, once that closes, you're going to lose all of those parts companies around it, all of that specialized knowledge, the supply chain, the trained workforce, all of it goes away.

And, you know, we are really good as a society of thinking about the value of manufacturing infrastructure we can think through, ‘Okay, what does it mean if we lose this assembly plant in this community? What does it mean for those jobs, those spinoff jobs, the supply chain jobs, and so on?’ But we don't think of creative spaces the same way, but they have the same impact. In fact, I would argue an even larger impact, because it's not just economic, but it's cultural as well.

Here's where it gets really interesting economically: cities that lose their creative class often become less attractive to exactly the kinds of businesses and workers they're trying to attract. So can you explain this paradox to us where, on the one hand, cities have some industries that are growing, the population might be going up, causing rents and prices to spike up. But at the same time, as rent and prices spike up, it makes the city less attractive to future investment and for company expansion.

Sabrina Maddeaux: It really does make it less attractive.

Cities often think they can trade artists for tech workers or finance professionals, or they can become more serious, quote unquote, economically by pricing out the creative class. But research consistently shows that tech companies, financial firms, and what politicians would consider “high-value industries” are drawn to cities with these vibrant creative scenes.

I mean, you look at Austin or Montreal, or even Toronto a decade or two ago, those same factors that attract the artists, diversity, cultural amenities, creative energy are what attract types of workers and companies that drive economic growth, especially if they are going to be paying higher rates for office space or housing, right? It's because you want to be near that cultural center. And creative workers aren't just producing art, they produce that type of culture and lifestyle that attracts other high-value workers.

We see this where tech companies choose to locate where young professionals decide to build their careers - cultural energy and amenities are major factors. Again, Austin, Portland, Montreal. Austin, being the most recent example, is able to attract major tech headquarters.

Austin was known for its creative scene. Austin likes to be weird - the music scene - that's why young professionals wanted to move there. It wasn't just about it being more affordable. And if Toronto becomes a place that's known for being a place where only people with generational wealth can afford to be artists, that sends a signal to everyone else about who's welcoming here.

And it's not just artists who ultimately get that message. There's also that tourism angle that I do think gets overlooked. And cities like Toronto, Montreal and Vancouver market themselves globally as cultural destinations. They promote their music scenes, art festivals, and gallery districts. Toronto alone counts the Toronto International Film Festival, Illuminato, and North by Northeast as these really major economic drivers, and we've also seen a lot of festivals shrink, close and struggle in recent years.

So if you're systemically pricing out the artists who create that culture, what happens to the tourism economy, Mike?

Mike Moffatt: Well, it's going to shrink. And we have to understand that the tourism economy, particularly in our cities, is massive. It's tens of billions of dollars a year.

And here's where it gets really interesting: this trade-off between housing and the tourism economy, where home prices go up, rents go up, and that prices out some of the creative class. But one of the things that we're also seeing is that as prices go up and rents go up, you actually start to get a little bit of a backlash to tourism. And we're seeing this in Spain right now, where locals are protesting short-term rentals and hostels and so on. And protesting the tourism industry in general, saying, ‘We want the city to be for people who live here.’ So it creates this tension where normally we think of the creative class, and we think of tourism as being a good thing. And it is. I mean, it improves our cities culturally and economically. But if you don't deal with the housing crisis, you can see these industries shrink, or in the case of Spain, start to see a backlash towards these industries.

Sabrina Maddeaux: So Mike, to wrap things up, if you were advising policymakers who are concerned about maintaining their city's economic competitiveness, what would you tell them about the importance of retaining creative workers? Is this something they should be worried about? And should they be as worried about it as, say, losing young professionals or service workers?

Mike Moffatt: I absolutely think they should be worried about losing creative workers just as much as they are losing young workers in other industries.

The nice thing is that a lot of the policy solutions are the same. They're dealing with the housing issue. It's making sure that young single workers, and families as well, have relatively inexpensive places to live.

In the case of creative fields, I think it's also making sure that you have, you know, those inexpensive places to practice, inexpensive pubs, and that kind of thing to play. So it has that less expensive real estate as well. And that can often get gentrified as well, where we say, ‘Okay, we're going to build these apartment towers, but we don't want all this noise and congestion.’ So we zone that out of existence. And there's always this trade-off, right? Where we want more housing, but are we making these other problems worse? So I think it takes a balanced approach. But I also think it really comes down to housing at the end of the day. That if you can fix housing for young, middle-class workers, you're like 90% of the way there. And then you can focus on that other 10% around venues and locations and so on. But if you don't have the housing, nothing else is going to work.

Sabrina Maddeaux: Absolutely. Thank you, everyone, so much for watching and listening, and to our amazing producer, Meredith Martin.

Mike Moffatt: And if you have any thoughts or questions about the jobs on The Big Bang Theory, please send us an email to [email protected].

Sabrina Maddeaux: We'll see you next time.