Tuesday, August 27, 2013

Macro Wages, Micro Wages

People complain to me on a regular basis that they're working for the same money or less than they were five ... ten ... fifteen years ago. Turns out there is a lot of that going around (who would have guessed?):

You're going to have to be patient. Very patient.

The wage "stagnation" workers are experiencing even as the economy and job numbers continue to improve is going to last considerably longer than expected, according to economists at the Federal Reserve Bank of San Francisco.

That wage increases come to a complete halt during recessions and don't recover immediately after is not unusual. But this time, the freeze and the decline in the real value of wages is "more pronounced than the pattern observed in past recessions. The economy has been recovering for four years and unemployment has declined considerably, but wage growth has continued to slow.

"The trend will probably continue ... long after the unemployment rate has returned to more normal levels," the economists write in a July paper.

The economists, basing their findings on Bureau of Labor Statistics data, said they do expect wage growth to "accelerate" sometime in the future, but don't say when. Right now, "the spike in workers who are experiencing no wage changes has reached record levels." ...

The Los Angeles animation industry has been sort of an outlier in the roller-coaster pattern of weekly salaries.

In the 1980s, artists got pretty close to minimum scale at lots of animation houses. Disney Feature paid veterans a bit more than newbies, but wages were anything but extravagant.

In the 1990s, salaries took off as both television and theatrical animation expanded at the same time and demand way outstripped supply. By the early 21st century the boom and feeding frenzy were over (particulalry for traditional artists) and the big bucks were being made by CG artists with production backgrounds. (Adam Smith lives!)

But now it's the second decade of the new millenium, and even CG tech directors and animators are getting hit in the pocketbook. Pay is (once more) bumping against minimums, and nobody is gloating about big money. The days of making twice the Animation Guild's minimum rates are long over. And our cousins, brothers and sisters in the VFX arena?

... Visual effects is the one key piece of filmed-entertainment production that operates under the Randian free-for-all that those economic sages prescribe for America’s greater prosperity. Until around 10 years ago, vfx artists and their skills were relatively scarce, so their jobs tended to be permanent and lucrative.

When IATSE tried to organize Sony Imageworks in the boom years, almost none of the company’s employees voted to unionize. That mindset held across the industry — and proved short-sighted. The major studios never had to become guild signatories for visual effects artists as they are for actors, directors and other specialties. They remained free to use f/x made anywhere, under any working conditions. And so they do.

As a result, downwardly mobile SoCal vfx artists — the canary in the coal mine for the rest of L.A.’s production pros — are learning to their terror just how much they have in common with laid-off machinists in Milwaukee. ...

We noticed this "lower pay" trend in cartoonland start in the late 1990s, but it's gone on to 2013. Animation is lucky compared to live-action and visual effects in Los Angeles. We've seen erosion of paychecks, but there is still a sizable workforce and lots of t.v. and theatrical work.

For grips, electricians, camera operators and everyone else on the live-action side, the high-end television shows and big-budget threatrical motion pictures are being made far away from L.A. County. The work that's remained has been (relatively) low paying.

Not good, but the way it is.


Grant said...

The bush economic debacle continues. If the gNOp teabaggers would work for their constituents instead of for themselves, and not confuse national politics with their local pork, we'd be better off even than we are now, which is 100% better than when shrub left office.

David said...

5 years in and it's STILL Bush's fault ? LOL. How long are you going to keep beating that old drum ?

Justin said...

Lower wages is not particularly surprising. With such a high unemployment rate it is easy to find people who are just happy to have a job; they're not going to bitch over how much they're getting paid. As unemployment drops it will become difficult to find people willing to work for pennies and employers will have to start offering financial incentives to lure in employees. Good old capitalism + supply and demand at work.

Steve Hulett said...

One of the more interesting parts of the story will come in four to eight weeks, when the Republicans will try to leverage a debt ceiling vote to further cuts in the budget. The administration says it won't negotiate paying for bills congress has already incurred.

Interesting times.

But the annual federal deficit is trending to "non-issue" status. Next year, deficit-to-GDP will be back under 4%, about where it was a decade ago. The yelling and hand-wringing over the "crushing debt" ignores the stats that tell us our federal budget-cutting is now inhibiting growth.

Reagan and Bush II both expanded public sector federal employment, but this hasn't happened with Obama. Public employment at the county, state and federal levels has shrunk, and it's impacted the recovery.

As for local animation employment, visual effects is now leaving for places that offer big rebates, and conglomerates are happy to take government money for their private businesses. There's a move afoot in Hollywood to lobby Sacramento to push through bigger rebates and tax incentives to compete. Crappy way to go, but if nothing is done, then vfx jobs will continue to shift to Canada, New York, Georgia and other places where rebates are in place.

Celshader said...

... if nothing is done, then vfx jobs will continue to shift to Canada, New York, Georgia and other places where rebates are in place.

I think shuffling artists around the world to chase rebates hurts VFX quality. I like to think that keeping a VFX crew intact and in one place for years helps that crew develop infrastructure, methods and teamwork that pays off in better quality work with each new gig.

However, I can see why Warner Bros chases rebates. Hollywood's behavior is rational, even if it hurts VFX artists and their craft.

Unknown said...

"... Visual effects is the one key piece of filmed-entertainment production that operates under the Randian free-for-all that those economic sages prescribe for America’s greater prosperity."

I haven't read Ayn Rand, but I'm tired of the obligatory mud-dragging of her name and ideas. We all know that VFX operates in a market severely distorted by government tax incentives; not only was the comment unnecessary, it was inaccurate.

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