The Price Of Unionization

VFX Law has a post on unionization as does TAG organizer Steve Kaplan. One of the reasons VFX artists are reluctant to join a union is that the costs are too much and/or they already receive benefits through their employer. Mr. Kaplan has an interesting post called The Fallacies of Costs and Unionization which goes over the actual costs the employer would pay for union fringe benefits.

The question for me has been this:

How much do companies pay for fringe benefits without a union?

Well, I’ve been given some information that gives us a small glimpse into just how much it is.

Fringe Benefits Costs

For those of you who don’t know what fringe benefits are, they are essentially non-salary compensation usually in the form of retirement and health benefits. I’ve been able to attain the following information of one producer who works at a studio:

Yearly Salary Expense: $100,000

Yearly Fringe Expense: $20,000

The same studio is a signatory to The Animation Guild. What would be the costs for an artist with the same salary?

Yearly Salary Expense: $100,000

Yealy Union Fringe Expense: ~$15,000

I’m using Steve Kaplan’s contribution rate of $4.53 per hour plus 6% of scale minimum which amounts to about $9,422 and 5500 respectively. In this situation, the employer actually saves money providing fringe benefits through the union. Obviously this is just one salary but it gives a glimpse into the costs and while unionization may be more or less, it certainly isn’t going to be explosively expensive.

How is this possible? Well as I hypothesized in one of my previous posts, 50-60% of fringe benefits are already paid for every year through residuals by the big six studios.

Hollywood’s Peculiar Industry

One of the things that makes the Hollywood industry unique is most of the workers work project to project and need health coverage when there are gaps in between. The unions were set up to handle and provide fringe benefits because the workers move around so much. The studios pitched in with residuals to offset and share some of those costs with the employers. This is the system that has been around for decades and how most workers from the directors to the caterers get their benefits and sustain longevity in the industry.

As VFX Law correctly points out, the big VFX facilities provide decent benefits for their workers. However, those benefits usually begin after vesting periods of 6-12 months and are only good while you are employed at the facility. With many vfx artists working 6-15 month gigs at various facilities, you can quickly see how many of those benefits fail to help artists in our industry. Even for an artist that is long term staff, the ability to know that you will get the exact same union benefits at another facility makes it a bit more relieving if you get laid off.

A VFX union would bring a few things VFX artists need:

Portable union benefits – You can go to another guild signatory and maintain the seamless cloak of benefits.

Enforcement of labor law – OT would be mandatory and 1099 wouldn’t even pass the smell test.

Bank of hours – You will be able to maintain health insurance for your family in between jobs for almost a year and a half.

The last one is huge.

As TAG business rep Steve Hulett pointed out with the closing of Asylum VFX, coverage under COBRA health insurance would basically end.

So for example if you were an artist that was laid off from Asylum back in June and you elected to keep your health insurance, you were probably stunned that it would end with the closing of the facility. However, for artists who were TAG members at ImageMovers Digital, most of them will get to keep their insurance for a year or more, and then be able to go onto COBRA.

The reason why is because the union administers the benefits, not the employer.

Doing Nothing Is Not An Option

VFX Law ends his post with a plea to owners:

If you want to have a say in how you treat employees, and if you don’t want to deal with a union workforce, start following the law and get people off 1099′s.  Pay them vacation.  It’s almost Christmas.  How about a bonus for their hard work?  Not financially an option for you? Are your margins so small that you can’t even fathom the thought?  Perhaps you’re in the wrong business then. Or perhaps, you could sit, wait, and watch, because the free ride you’ve been taking on artist’s backs is not going to last much longer.  Pretty soon you won’t have a choice, and no amount of greed can save you.  Time to start packing that golden parachute.

So many times artists such as myself have supported the notion of the facilities forming a trade organization to stop the race to the bottom. ILM/Digital Domain general manager Scott Ross led the charge and what was the response from the facilities? Nothing. They have expressed zero interest in a trade organization.

Jeff Heusser even reported from the latest VFX Production Summit in October (which facility owners did not stay to answer Jeff’s questions):

Cheap labor was discussed along with tax incentives and both were dismissed as not long term solutions. Cheap labor does not stay cheap and tax incentives have been under attack in some places as not working and can change, as can value of currency between countries. Cooperation between facilities was a topic with Fink relating how in the UK with facilities located so close and the pub culture that often problems get solved across company divides. Kilkenny talked of a job where a facility was able to borrow artists from another facility when they had overflow needs.

Facility owners know cheap labor and tax incentives aren’t the answer, however what have they been doing? They’ve just continued chasing cheaper labor and more tax incentives.

The framework of union benefits could allow facilities to better share resources. I’m not saying unionization is the solution, but it can be a part of the solution. It could help equalize the costs of labor across facilities and stop the race to the bottom.

A Plea To Artists

Look, the change we need in this industry isn’t going to come from up top. It’s not going to come from the studios. It’s not going to come from facility owners either. Hell, with responses from facility owners like this, the message should be abundantly clear.

Change is going to have to come from the artists. I’m already getting word of another facility in Montreal that isn’t paying its artists. Being jaded, complacent, and apathetic isn’t going to help. Start showing up to those VFX union meetings and voice your concern.

Soldier On.

3 Responses to The Price Of Unionization

  1. chris says:

    i kinda like the unionization-idea and it seems that – if everybody agreed – it could be set up quite quickly in the US…
    but are there are any efforts outside of the US to make something like that happen? otherwise – if it’s established in the US only – it wouldn’t make much sense, right!?
    if there’s something serious going on worldwide, it would be nice to get a vfxsoldier-post on it🙂

  2. […] actually seen the costs of fringe benefits for a non-union worker and a union worker at one facility and the union fringe benefits were actually cheaper. Why? Because 50% of the health […]

  3. […] benefits could actually be cheaper for facilities that pay for fringe benefits. Some facility owners have been bold enough to say […]

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