Tuesday, August 21, 2007

Unemployment and the Economy

Hey! But at least they're coming back up a little!

Time out for a quick economic post, with help from The Big Picture (Barry Ritholtz's fine economic and investing blog).

Barry today has some pretty good analysis of where the economy and unemployment is:

...So long as we are popping economic myths, let's also dispatch with the 4.5% unemployment rate. That number has been largely caused by several million exhaustees and others simply leaving the work force...

The actual unemployment rate is closer to 6.5%. And if we measured it the way the Europeans do, its closer to 8%. This explains why wages and labor costs have remained subdued despite the alleged 4.5% UE measure.

Anyone with more than 4 functioning brain cells should be able to figure out that a 4.5% unemployment rate would be causing huge labor shortages and wage increases.

Instead, the average income gain is merely a measure of inflation: reported gains reflect increased costs for medical care -- the exact same coverage (but with a higher copay) which costs 15% more year-over-year shows up as increased total wages.

In animation land -- as in the entertainment business generally -- employment/unemployment is way more pronounced.

Employees go from sizable salaries (relative to the national average) to unemployment in three-month, six-month, nine-month cycles. Small wonder the stress levels get so high in Toon Town. The man or woman collecting eighteen hundred or two thousand per week today might well be down registering at the Employment Development Department tomorrow.

"Project to project" is a major theme among industry workers. And the anthem in-between the work? "Bleeding ulcer to bleeding ulcer."

9 comments:

Anonymous said...

Time to get that fork lift operator certificate...It's only $99, and you can get it in one day....

R.

Steve Hulett said...

Sadly, my teaching credential has lapsed...

Anonymous said...

Y'know, there are other ways to use your animation skill and knowledge to earn a living besides working on TV or film projects. Lots of people do them every day, and many of these jobs are far more stable than the 6 on, 6 off schedules that seem to be at issue here.

No one's forcing anyone to work in a business that's known for it's cyclical nature. Working in TV or films and complaining that it's not steady employment is akin to a roofer complaining about having to work outside...

Anonymous said...

Y'know, there are other ways to use your animation skill and knowledge to earn a living besides working on TV or film projects.

I dunno. I do have a computer science degree. However, I suspect I have about the same job security in the VFX/animation industry as I would in the computer science industry. A lot of computer programming jobs are at risk of getting outsourced overseas.

Steve Hulett said...

No one's forcing anyone to work in a business that's known for it's cyclical nature. Working in TV or films and complaining that it's not steady employment is akin to a roofer complaining about having to work outside...

The nature of the 'toon business has changed in the twenty-first century, and people get caught betwixt and between. Here's what I mean:

For decades, Disney was a relatively stable employer. After the layoffs of '58, its animation department employed a pretty consistent number of people (170-210) in animation for thirty years. And then employed more twelve months a year for over a decade.

Hanna Barbera employed over a thousand employees for years. Granted, there were months-long layoffs between television seasons, but people built their calendars around network schedules. They knew when they would be working and when they wouldn't.

In the 90s, a huge number of new jobs industry-wide pulled in a huge number of new people. Competition for qualified artists was fierce, and studios retained people. Warner Bros. Animation, for example, kept a sizable staff on payroll year-round, even when there wasn't work.

My point: large numbers of people built lengthy careers on long-term employment, not the on-off thing we see today. The project-to-project work schedules have only kicked in over the last 7-8 years. Artists with ten, fifteen, or twenty-five years in the business have a vested interest in hanging in and trying to maintain viable careers.

Then there's also the idea that lots of folks love what they do, and want to continue doing it if at all possible.

Anonymous said...

Steve, everything you say is true, but let's look at it objectively:

Disney's decades of stability employed fewer people than work at the local WalMart (o.k., maybe two WalMarts).

Hanna Barbera's on and off schedule isn't really any different than what's happening today, with the exception of the predictability, so it's not really a great example.

The current on-off schedule has been around for 7-8 years, as you say. Isn't that enough time for most people to notice it's going on and make decisions appropriately? If you'd said 7-8 months, it'd be a different story.

Of course people want to keep doing what they love. Change happens though, and you've gotta adapt if you want to stay in the game. It doesn't do any good to wish things were different, and at some point one may have to make a choice between what they love and what they need to do to survive. It's not pleasant, but it's life.

Steve Hulett said...

The current on-off schedule has been around for 7-8 years, as you say. Isn't that enough time for most people to notice it's going on and make decisions appropriately?...

Yep. And many have. And many have tried to keep going.

Some people make life decisions on a more emotional basis than other people. Me, I saw that a middle-aged animation writer was probably not going to make a viable living if he didn't make a shift, and so I shifted.

Change happens though, and you've gotta adapt if you want to stay in the game. It doesn't do any good to wish things were different, and at some point one may have to make a choice between what they love and what they need to do to survive. It's not pleasant, but it's life.

I've preached for years that folks in the biz need to have multiple arrows in their quivers.

What keeps a lot of people going is that there's sufficient work around to carve out a career, you just can't do it at one studio.

From this end of the telescope, I see fairly high overall employment numbers but lots of churn.

As you say, not pleasant, but the way it is.

Anonymous said...

Steve Hulett said...
Sadly, my teaching credential has lapsed...


It can lapse?!?!

I have a substitute credential I got out of college in '06 that's good for CA. Does that mean I need to renew it or retest every so often?

Anonymous said...

Average income and median income are calculated differently:

http://en.wikipedia.org/wiki/Income_in_the_United_States

It seems mediam income is a slightly more accurate satistic.

I'm no expert though.

Rufus.

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