Here’s some food for thought while we’re in the midst of summer blockbuster season.
Someone very late last night (I apologize for not remembering who) posted a question asking why we hardly ever see practical effects in movies anymore. The effects in even the biggest, most expensive summer blockbusters are generally computer renderings, which, despite their sophistication, oftentimes just don’t look as good or seem as convincing as practical effects.
The short answer is: it’s cheaper.
Digital production, as the Variety article notes, has become a globalized business, which makes it particularly hard to organize workers. The nature of the work also makes it very easy for a studio to shop around for the cheapest rates. This has resulted in a race to the bottom in the industry, in which VFX work leaves countries with relatively stronger worker protections and higher wages to countries with lax labor laws and low wages. Predictably, this has led to worker exploitation. One former visual effects artist in India recounts,
At one studio, artists are asked to work without salary for at least four months, at which point the studio can ask them to leave if they didn’t find their performance “good” enough. At another studio, they reduced their staff in the 3D animation department from 150 people to a mere 5 people. One studio takes Rs 30,000 (approximately $550) as a deposit from artists and only returns to the artist (without interest) once they complete two years employment at the studio. [Note: An average MONTHLY salary might be Rs 7,500 ($138 month) so the deposit is equivalent to nearly 4 months salary.]
This situation isn’t just a result of technological advances and the ‘natural’ workings of the free market. David Sirota points out
That’s where governmental subsidies came along to distort the market. Violating the spirit, and the letter, of World Trade Organization regulations and U.S. domestic trade statutes, industrialized countries like Canada, Britain, Australia, Germany and New Zealand have started offering massive taxpayer-financed handouts to studios if the studios source their visual effects and post-production services in those nations. In British Columbia, for example, public subsidies pay up to 60 percent of the entire salary of visual effects workers. The United Kingdom and New Zealand have been following suit with recent efforts to further expand their own subsidies.
This never-ending taxpayer-funded bailout has grossly distorted the global market for visual effects, artificially deflating studios’ overall price for visual effects in the high-subsidy nations.
Things are quite dire. As Sirota notes, U.S. states are spending about $1.5 billion in subsidies fighting over the scraps of domestic visual production work that are left but these investments of taxpayer money aren’t generating significant revenue or local economic growth. Dozens of visual effects companies have gone out of business or are teetering on the edge. Artists at home can’t find work and artists overseas are being treated like indentured servants.
The Variety article assesses the crisis quite bluntly:
A harsh question has to be addressed: Would the studio tentpole business be viable if it couldn’t get vfx companies, states, nations and, yes, even artists, to subsidize the pictures either through tax policy, working for below cost or accepting poor compensation? In short, would tentpole production make financial sense if the studios couldn’t play all these people for saps? I’m not convinced it would.
You might think it’s odd that I’m writing so much about what is, relatively speaking, a rather small segment of the U.S. labor market. And I am not at all an expert in the movie business. But I do pay attention to labor issues and have noticed the same interlocking pattern of outsourcing (when possible) or casualization (when not), flagrant abuse of workers, and deeply misguided government policies—a pattern which always results in fewer good, full-time jobs, lower wages, and deepening inequality.
It’s not just blue collar factory workers or Walmart employees or fast food workers who are being underpaid and overworked and thereby forced to subsidize profits that largely go to shareholders and CEOs. It’s also well-educated, white collar workers in highly skilled fields.
Perhaps the comfortable, white collar folks who supported NAFTA and other neoliberal policies that have decimated U.S. manufacturing are finally realizing that no worker is insulated from these trends. It doesn’t matter how smart, educated, skilled or hardworking you are. If the bosses can figure out a way to rip you off, they will.
So the workers at Volkswagen Chattanooga voted 712-626 against joining the United Auto Workers (UAW) tonight. What was interesting about this case is that Volkswagen was interested in forming a German-style works-council with employees there. One condition of accomplishing that was instituting a union at the plant.
Republicans heard about what was going on and went berserk, even threatening to cut off subsidies to VW. That’s how anti-labor these shitheads are: they’d rather risk having the plant leave the state than allow workers to form a union.
…[M]any of the plant’s workers are themselves conservatives — and have started to wonder why the politicians who represent them oppose their right to organize. John Wright, 43, is a test driver at the plant and identifies as a right-leaning independent. He says he makes between $30,000 and $40,000 a year, and supports a wife and three young daughters. When Corker — who takes more money from the securities and investment industry than any other — came back to Nashville to voice his opposition to the UAW, Wright was puzzled.
“It made me really start thinking about my position, when it comes to political parties, because I can’t for the life of me understand why the Republicans and big money are coming against us so bad. To me, they’re attacking the average worker," Wright said, in the hours before the election results were announced. "To have politicians think that there’s nothing more important than coming down and picking on the little guy because he wants a union, there’s a national debt we’ve got to control, we have foreign policy things that we elect them to go up there to do, but you have to fly home for an emergency meeting because I want a union?"
Jindal and his allies want the public to see them as entirely sincere. They’re not trying to crush teachers’ unions, and they’re not on a privatization crusade, intent on destroying public institutions. They just want to help low-income children, even spending public funds to advance their goal.
But their purported concern for the poor is literally unbelievable. When the issue is health care and housing, Jindal and other conservatives say struggling families should rely on the free market and their capacity to pull themselves up by their bootstraps. When the issue is education, suddenly the right cares deeply about disadvantaged children and is eager to “help.”
When Jindal and other school voucher advocates are ready to assist “poor and disadvantaged” families in ways that don’t undermine public schools and teachers’ unions, I’ll gladly revisit the debate. Until then, this looks a lot like a scam.
Hostess Brands acknowledged for the first time in a news report Monday that the company diverted workers’ pension money for other company uses.
The bankrupt baker told The Wall Street Journal that money taken out of workers’ paychecks, intended for their retirement funds, was used for company operations instead. Hostess, which was under different management at the time the diversions began in August 2011, said it does not know how much money it took.
“It’s not a good situation to have,” Hostess CEO Gregory Rayburn told the WSJ.
“Whatever the circumstances were, whatever those decisions were, I wasn’t there,” Rayburn added. As the founder and owner of Kobi Partners, a restructuring advisory firm, Rayburn was appointed acting CEO in March 2012.
Hostess Brands, which filed for bankruptcy for a second time in January, started liquidating its operations in November after the bakers’ union refused to take another pay cut and went on strike. The liquidation will leave about 18,000 workers without jobs.
In November, a judge approved Hostess’ plan to pay $1.8 million in bonuses to 19 executives, according to CNBC. Rayburn declined to take a bonus but also avoided a company-wide pay cut that he imposed, Hostess told HuffPost.
Twinkies are unlikely to go extinct, since Hostess is in talks with 110 buyers about its brands. But the snack cake genre may need a revamp, as Americans have become increasingly health- and quality-conscious.
Incompetence, greed, theft…or business as usual for corporate America
— President Obama • During a speech in Michigan today, clearly laying out his views on a new law that will make Michigan the 24th “right to work” state in the country. Michigan’s House of Representatives is expected to review the bill on Tuesday, and Gov. Rick Snyder could sign it into law by the end of the day. Massive protests took place at the capital building, and union workers opposed to its passage say they’ll be back tomorrow. source (via shortformblog)
Joe Hill, “The Preacher and the Slave”, 1911
Joe Hill's actual name was Joel Hägglund (or perhaps Hillström). He was a Swedish American immigrant and labor activist. He was arrested numerous times for trying to organize laborers in Chicago and Cleveland and, in 1910, joined the San Pedro, CA chapter of the Industrial Workers of the World (IWW). The IWW was the only union at the time that would admit immigrants. Hill became a popular songwriter and cartoonist for the union. Songs like this one were useful in organizing efforts because many workers at the time were illiterate.
"The Preacher and the Slave" is a parody of the Christian hymn, "In the Sweet By-and-By". According to PBS:
…”The Preacher and the Slave” was initially printed in the 1911 edition of the LITTLE RED SONGBOOK…The song mocked organized religion and the Salvation Army, whose sidewalk brass bands broadcasting a message of heavenly redemption were the Wobblies’ main competition for the hearts and minds of the down and out. Referring to it as the “Starvation Army,” the song mocked their lack of compassion for the temporal needs of struggling laborers and their siding with the bosses.
Hill was executed in 1915 on dubious murder charges, but his song lived on in migrant workers’ camps, and in the pages of the the Little Red Songbook and The American Songbag (1927). Hill’s enduring contribution is probably the idiom, “pie in the sky”—a phrase that mocked the Christian idea of enduring hardship in the here-and-now in the hopes of being rewarded in the afterlife.
Hill’s last will is pretty great too:
My will is easy to decide,
For there is nothing to divide.
My kin don’t need to fuss and moan,
“Moss does not cling to a rolling stone.”
My body? Oh, if I could choose
I would to ashes it reduce,
And let the merry breezes blow,
My dust to where some flowers grow.
Perhaps some fading flower then
Would come to life and bloom again.
This is my Last and final Will.
Good Luck to All of you
This piece by Seth Ackerman is a fascinating take on the Hostess situation. He argues that the way neoliberals disparage unions for enforcing ‘uncompetitive’ wages can be traced back to—literally—medieval notions of moral worth, class status, and the economic value of one’s labor.
First, Ackerman points out how rare it is for wages to be cut. Employers tend to fire workers rather than cut wages because doing so risks walk-outs and decreases in morale and productivity:
…Judging from the commentary, you would think that out there in the real world, 30% pay cuts are the norm and people just suck it up. In reality, nominal pay cuts are rare. This is a well-known phenomenon in economics: it’s called downward nominal wage rigidity. Companies rarely impose actual reductions in the dollar amounts of pay for existing workers. In the most reliable studies, using company payroll records, about 2%-3% of workers experience a pay cut each year. Data from national surveys are notoriously prone to measurement error, but after correcting for it, 4%-5% of workers are observed experiencing falling wages.
[Yale economist Truman] Bewley summarized what he found this way: “All employers thought cutting the pay of existing employees would cause problems. The main argument was that employee reactions would cost the firm more money than a pay cut would save, so that it would be profitable only if workers accepted it.”
Interestingly, while many are eager to criticize unions for enforcing ‘uncompetitive’ wages that hurt firms, those same critics fail to discuss how those firms can hurt themselves by not offering competitive wages (emphasis mine):
In a piece for Salon, Jake Blumgart quoted a bakery worker who had been at the company for 14 years. “In 2005, before concessions I made $48,000, last year I made $34,000…. I would make $25,000 in five years if I took their offer. It will be hard to replace the job I had, but it will be easy to replace the job they were trying to give me.”
What we have here is a situation where a company offered a wage in the marketplace and couldn’t get any workers to accept it. Consequently, it went out of business. The word “competitive” gets thrown around a lot, often with the murkiest of meanings, but in this case there can be no doubt at all that a company, Hostess, was unable to pay a competitive wage. Ninety-two percent of its workers voted to walk out on their jobs rather than accept its wage, and they stayed out even after they were told it was the company’s final offer.
By all the canons of competitiveness, it was the company that was deluded. Hey, it’s a tough labor market out there. Hostess just couldn’t compete.
Yet many were quick to blame the Hostess unions for the company’s failure to stay competitive. Here’s the thing, though: if you can’t run your business without making your employees so unhappy that they’d rather walk out and forgo pay than continue working, then you probably shouldn’t be in business. Cutting wages is not the only way for a business to remain competitive. In fact, doing so can be bad for business, as the employers interviewed by Bewley point out.
So if there’s no objective, economic reason to blame unions for Hostess’s failures, then why do so many do it? What do they really mean when they say unions are harm businesses by demanding ‘uncompetitive’ wages? (emphasis mine):
But the union got blamed instead, and that points to a fascinating aporia in neoliberalism. The competitiveness ideology keeps a double set of books. On the surface, it celebrates free individuals making voluntary agreements on a footing of formal equality. But look just a little deeper and it turns out to be a musty, medieval system of morality that venerates human hierarchy and inequality. If taken literally, an accusation of insufficient “competitiveness” would refer to a failure to buy or sell on the terms objectively demanded by the dispersed actors of the marketplace. But nine times out of ten, this literal meaning is just a facade for the real underlying meaning, which is all about policing the socially accepted rules concerning who is a worthy human being and who is not. Workers at an industrial bakery are losers. They need to take a pay cut — not so much to make the numbers add up…but as a ritual affirmation of their debased social status. The refusal to take the cut was shocking and revolting — an act of lèse-majesté. It’s in that sense that the union was uncompetitive. The workers didn’t know their place.
Erik Loomis neatly sums up the ugly classism lurking beneath complaints about uncompetitive union wages:
So much of our ideology about workers is looking down on blue-collar labor. They aren’t educated so they deserve to be at the bottom. Plus I have a college degree and I have an unpaid internship. I am so lucky to get this “job” and I am so valuable with my bachelor’s degree in journalism from Michigan. So if I’m not getting paid, certainly those losers should be getting even less.
When a business fails, why should workers, rather than management, be blamed? It was the bakers’ job to bake. It was management’s job to make sure the company stayed in business. This included making sure they were paying wages that would attract and retain workers. The Hostess bakers were doing their jobs. The people running Hostess failed to do theirs. To argue otherwise is to suggest that blue collar employees are somehow more responsible for keeping a company successful than the white collar people paid handsomely to manage it.
I actually had some hope for this Adam Davidson piece. After all, he quotes my favorite labor economist, my buddy Mark Price (follow Mark on Twitter here).
But he lets it all collapse at the end, after pointing out rightly that the so-called skills gap isn’t a skills gap at all. “Trying to hire high-skilled workers at rock-bottom rates is not a skills gap,” a study from the Boston Consulting Group noted. Skilled, educated workers, many of whom have debt out their ears from getting said education, are expected to work for $10 an hour?
“It’s easy to understand every perspective in this drama,” Davidson writes, but as usual he finds it much easier to relate to the bosses than to the workers.
Which is perhaps why Davidson takes “weakened unions” as a fact of life, rather than a result of years and years of sustained attacks on unions from all angles, from the courtroom to Congress to the shop floor. “The social contract has collapsed” is a passive-voice monstrosity that masks the reality that the workers kept up their end of the bargain and indeed conceded time and again (witness the Hostess story for a perfect example). The contract didn’t collapse of its own weight, it was violated again and again.
Davidson could find experts and a boss to quote, but couldn’t go find, say, a union manufacturing worker to discuss, say, the last twenty or thirty years of attempts by the bosses to force down wages, turn pensions into 401(k)s, cut back on healthcare contributions, and lay off workers entirely to ship jobs to China.
The last paragraph, where Davidson’s argument collapses entirely as he lets the boss steer him into the neoliberal blogger’s favorite hobbyhorse, is really special. Education is the problem! Education will save us! He conveniently neglects to mention that $10 an hour starting salary from just the previous page. Hell, I’m surprised that he didn’t find a way to outright blame teachers’ unions for the fact that “too few graduate high school with the basic math and science skills that his company needs to compete.”
As Seth Ackerman pointed out, “competitive” wages is a stick applied to workers by neoliberal writers and opinion leaders to remind the proles of their place. The wage that Davidson’s pet boss is offering is uncompetitive even in a country where real wages are debased—nobody will take the jobs he’s offering at the pay rate he’s offering them.
Yet Davidson, who wholeheartedly believes in free markets, has to find something else to blame for the failure of employers to offer a wage that workers will take. Enter the favorite punching bag of the well-educated pundit class: public schools.
You see, if those schools were just cranking out workers with the right math and science skills, we’d be able to compete! (Which, in this case, means “get workers to take lousy $10 an hour jobs”.)
Here’s the thing: if public schools were actually graduating close to 100% of the students they taught with the precise math and science skills that Davidson and his pet boss want, they’d still be “competing” for the same lousy $10 an hour jobs. In fact, the glut of skilled workers would most likely push those wages down, because even though, as Price pointed out, the “shortage” of skilled workers hasn’t seen a rise in wages for those skilled jobs, we most certainly have seen downward pressure on wages as unemployment has remained high.
In other words, we don’t need more educated workers until we have the good jobs to offer them.
Education is a great thing for its own sake. I want to see free higher education for all who want it. But even without the millstone of student debt around the necks of young people, $10 an hour jobs are not going to fix the economy. As Heidi Shierholz, Natalie Sabadish and Hilary Wething at the Economic Policy Institute pointed out in a recent report, young people still have few opportunities, face high unemployment and even higher underemployment.
But that’s a scary thought, and so even though Davidson starts off heading in that direction, he screeches to a halt and turns off down the reliable path of calling for “education”, never mind that his conclusion almost completely contradicts the points he’s made earlier in the piece.
Because if he were going to open up a real discussion about low wages and skilled workers and outsourcing, he’d perhaps have to admit that the market solutions he favors won’t fix these problems.