Saturday, August 27, 2011

VFX Wages Discussion

This post is in response to a comment on a previous post.  See this post and follow the comments there for the full original comment. (Toward the end from Anonymous) Unfortunately once I wrote this response it was bigger than a comment could be so I've done it as a post.

Here's part of that comment (focused for this post) but request you read it all to see it in context:

"Here is my thought on this: We got greedy.


During boom times artist rates went up and up. I now make more money than most doctors. I know plenty of others who do just as well. We are the most expensive part of production on most films. While single individuals may get larger paychecks- the director, producer, lead actor, a massive amount of money goes to VFX.


We are too expensive. I make, on average, 5 to 10 times more than other Americans. Why?! It just happened that way over time, I didn't ever expect to be doing this well as an employee of another company. I am well beyond my own expectations."

We got greedy? I don't recall a mass rally outside vfx company offices calling for huge pay increases. I don't recall any company just deciding one day they will pay more simply because vfx workers would like more.

I'm still not clear why people are apologetic for being paid above a national average as if it were a sin. Especially if you're actually a skilled and knowledgable worker creating something or performing a real service that will ultimately be very profitable. According to some of these people we're all so well paid none of us should get health care or any other benefits.

I'd like to think that decades of experience in a very difficult creative and technical industry would amount to something. That the time and effort put into keeping up with quickly changing software, images and techniques would be of some value. I'd like to be paid more than I was 20+ years ago. Some movies makes hundred of millions of dollars (and some even more than a billion dollars). Movies that we helped create. I'd like to think that those of us who do this are paid enough money to have a reasonable home in the cities we work in, that we can afford to raise children, that we don't have to worry about health care bills, that we don't have to scrape the bottom of the barrel to try to retire one day, and that we we're paid enough so we don't have to worry if we don't get a call for a project next week. Is that being greedy? I don't think so.

There will always be people who make more than you and people who make less than you. Bill Gates isn't always the top of the list. You may not have  made any money last year but there's likely someone who hasn't made money for the last 2+ years.

The average US CEO of a public company makes over $10 million a year. [To put that in perspective many CEOs earn as much in 1 day as a typical US worker does in an entire year. 1 Day] Are they that much smarter? Harder working? Working longer hours? From my experience you could actually replace most CEO's with a rock and it wouldn't make a bit of difference to the bottom line since it tends to be the workers and managers that handle the actual running and in many cases the non-CEOs are the ones that are forward thinking. (Steve Jobs is a rare exception)  I suspect many of these CEO's have assistants that probably make more than a CG supervisor. At the other end of the spectrum are people working multiple jobs cleaning toilets and digging ditches just to try to make a living for themselves and their family. There are some teachers and regional pilots that make less than the poverty level of income. Is any of that fair? No, but all we have at most is a tiny bit of control of our own wages.

I know someone who works in non-vfx that probably puts in half the hours I do and is paid 2-4 times what I make. I know a non-vfx software engineer who was very well paid at a permanent position. More than you are. He received a $300,000 bonus when they shipped on time. When was the last time you got paid a bonus? Any type of bonus? [Supreme Court Clerks now receive over $280,000 signing bonus when they go to work at a law firm.] Most of the time people put in an incredible number of hours at the end of a project and may not even receive a thank you from the company. If the company is really feeling up to it they might have a wrap party as a thank you.

Drive around Los Angeles and look at the pricing of homes in areas you wouldn't mind living in. Base price of a reasonable house (small 2 bedroom) in LA is over $800,000. Many start at $2 million and go up. There are a lot of people in LA making a lot of money and they're not vfx people. Do you think all of these people are going without health care and pensions? Do they all feel guilty?

We are the most expensive part of production on most films.
Well we’re a large expense IF the show is a VFX show.  I’d hardly call vfx the most expensive part of most films. Most films don't have extensive vfx. Most films burn through $100,000-$300,000 per day while shooting. Most films spend tens of millions of dollars on advertising and promotion. Most films employee at least some actors making $2 million to $20 million. On most of the vfx projects I’ve worked on, vfx typically use less than ½ the budget, in many cases 1/3 to ¼.  Published movie budgets are seldom accurate.

While single individuals may get larger paychecks- the director, producer, lead actor, a massive amount of money goes to VFX.”
I cover a few other people below. You act as if it’s our fault and something we should be ashamed of. A studio chooses which projects they feel will make money in the box office. Most of the top 20 moneymaking movies have made extensive use of vfx. It wasn’t the only reason for their financial success but vfx is part of the reason and with some films, it’s very high on the reasons. The studio chooses to make a vfx film. It’s not something we’re pushing on them. A studio makes tradeoffs and may choose to spend more on vfx than on A actors on some projects and just the opposite on other projects. And the thing about vfx is it’s not just one person.  You’ve lumped in all the vfx people costs (which can be hundreds of people) against individuals. When you compare the costs of a full shooting crew on a large vfx movie (including 2nd unit and all the support teams) shooting for 6 months then it’s a much different balance between the ‘expensive vfx crew’ and the shooting crew. The live action crew can be just as expensive, if not more expensive.

Film business: In addition there are quite a few others in the film business making above the national average by week/day/hour. Studio executive, jr executives, editors, DPs, production designers, stunt supervisor, special effects supervisors, sound mixers, DI colorists, etc.
I haven't checked salaries lately but suspect most of the crew make above the national average as well. And why do people make good money in Hollywood? Because they're working on large projects with very good profits if done well. A VFX heavy film will likely make hundreds of millions in profit if done correctly. These people have developed skills and experience that can't be simple bought or learned in a course. They go from project to project so they're not permanently employed. They freelance. They have to be paid more simply to average out and be able to afford the same thing that someone is permanently employed can afford. They put in long hours. Shooting days are 12hr days. Shooting weeks can be 5-7 days. They live in LA and similar areas where the cost of living and housing is above the national average.

Realize the national averages really haven't gone up much in the last 20-30 years.  Most pay has been relatively stagnant with 2% increases a year, if that. Even while many companies have become much more profitable. So where does the extra money go to? The CEO, upper management and shareholders. CEO's 30 years ago made approx 30x their average employee.  It's now over 300x. GE made record profits last year. Paid no taxes. What do they want to do? Cut wages and benefits of their workers.
Why were Verizon workers on strike? Verizon is making very good profits, paying their upper management very, very well and not paying taxes. And yet they're still asking their workers to reduce there benefits. "That loss of health benefits and other givebacks in the proposed contract would net Verizon annually about $1 billion, or $20,000 per worker, according to the unions." ref  And these are benefits that had already been agreed to by both sides and awarded. Now the company wants to reduce them.

From the sounds of it you're in a very sweet spot.  You seem to be permanently employed, paid a very high salary and get paid overtime. "I now make more money than most doctors." Really? You make more than most doctors? What you’re describing is not the average or typical for the majority of vfx workers.

If we're going to even try to compare any of this to the national average there are a few things to do. So let's take a look at what an average vfx worker deals with. First calculate rates 1 1/2x for over 8 hrs and 2x for over 12 hrs to work out an average 40hr week. Most of us work 50 hrs to 90 hr weeks but for comparison we have to put it relative to a 40hr workweek. Don't forget those who work a flat rate (no overtime pay). Use the same formula and see how that works out, especially once you hit 90hrs+ a week. VFX workers who do work a lot of overtime end up sacrificing time with their families and their health in the long run that many other jobs do not.

 "So many of my friends are unemployed right now."
Even at ILM it was common for people to be laid off for 3-6 months during the 'slow' periods and now we're seeing people go for even longer stretches.  So cut the cut the pay period from 12 months to 6-9 months. Now calculate a yearly average or 5-year average.

Oddly when you take that high salary and try to stretch it from 6 months to cover a year, it doesn't look nearly as large. And in the case of most vfx workers there's no guarantee when they will be re-hired. It may seem like the perfect time to take an extended vacation but if you don't know whether you're working again in a few weeks or a year from now it's hard to plan.

Now not everyone in vfx is covered for health care or pension. Even if they were covered if they're off for an extended time or have to switch companies they have to start over. So calculate in the cost of Cobra insurance or self-insurance.  Also calculate a pension fund. Not cheap. And we're adding this because most full time jobs include these as part of their compensation.

If a vfx worker has to work outside of town for a given period and has to cover related expenses (travel, boarding, phone calls, etc) then deduct those as well from the vfx wages. A percentage of non-vfx workers work for companies that offer other benefits. (Discounts on products, discounts on services, profit sharing plans, stock options, bonuses, etc) So now compare the full compensation package of the national average with the average vfx worker and what it costs to create that same level of benefits.  That average vfx salary that may have looked huge on the surface is likely to be much closer to the national average than it first appeared.

Are there 1000's of people who could do what you do? Can they step into the job you're currently at and do just as well? Do you have years of experience, expertise and skills that means you're much more likely to do something much faster and to avoid the pitfalls? Do you have to take responsibility for the project or a team of people? Do you have to manage people? Do you save money for the company even with your salary?  When I work I don't feel bad about being paid well because not only do I accomplish what needs to be done I usually end up saving the vfx company or studio a few times my salary just on avoided expenses. (Avoiding or minimizing costly sets, having the option not to travel the entire cast and crew halfway around the world, improving the pipeline, minimizing the amount of overtime that I can, doing multiple tasks, doing my own mockups, etc)

Companies can and do at times hire poor employees/managers that not only don't accomplish what they need to but that cause losses by making bad decisions. In the end the roto and paint team may have to solve problems because of mistakes made early in the process.

So how does this all work in today’s vfx world?  Yes, workers in China and India are paid less but they typically have a lower cost of living. And even in these places as the workers get more skills and experience their wages are going up.

Why don’t all vfx workers in California cut their wages in half?  Certainly that would have an impact and counter the imbalanced tax incentives? Yes, but probably not in the way most people might expect. First, many vfx companies would be unlikely to pass all of that savings on to the studios.  They would want to keep some to increase their profits and increase salaries of their management. Second, the studios would ask the vfx companies for even lower bids, because after all, the workers cost less.  Those places in other countries and areas would be forced to follow suit because the companies that employee them and the studios would point out those in LA don’t make as much. End result could simply be evenly lower bids with the tax incentives still in place and the work still going else where. And now everyone is paid less.  Doesn't seem to be much of an advantage.

Why did we end up with the salaries in vfx that we do?
It just happened that way over time.."  Nope.
First off there is no standard.  People tend to assume there is because some of the bigger companies have somewhat similar rates. But without a union there’s really no standard rates and people doing the same job at different companies (or even within the same company) could be paid drastically different rates. (and of course different locations and countries differ as well).

Companies don’t just randomly choose to pay a higher rate for workers. Nor do they tend to volunteer to pay increases and other job incentives.

One of the reasons why people are paid the amount they are because when digital vfx started it was made up mainly of union people. ILM was all union when I went to work there. Say what you will about the unions but the fact is in many industries you’re paid a reasonable rate because a group of people organized and asked for given rates. There was a shift to digital as time progressed but many of the people shifted to similar jobs in the digital world if they could. That also meant that 2D animators (with skills and existing experience) tended to move into 3D. Once again people who were already up to speed and able to accomplish the work are worth far more than a number of less expensive people with no experience and that would require training and hand holding.

Those working in VFX are also paid what they are because similar jobs in other industries might pay well. Digital vfx were ramping up as Silicon Valley was at full speed. Whether it’s in graphic arts, software development or other areas, if companies wish to either hire someone from that other industry or want to retain people from going to another industry, then they have to pay a competitive rate. Do you think everyone at Apple, Google, Microsoft and Adobe are being paid minimum wage or even the national average?

And the other reason for the pay to be the way it is because there was a lack of skilled, experienced talent at the beginning and some companies would essentially compete to get key people. The result is there was a spike at one point but much of that has already been scaled back. Will there be more scaling back in the future? Possibly.

But don’t forget the US Justice Dept found that there was collusion between ILM and Pixar regarding non-competing for animators. So that created artificially lower rates for animators and prevented some opportunities for them.

As stated the reason why the rates are where they are elsewhere is due to the rates that have been paid to key vfx people in California. We’re now seeing a flood of vfx students trying to be employed. Many of these people are willing to work for anything, including free and minimum wage. Some would be happy to pay the first year if necessary.  What they don’t understand is by working free or cheap they can end up pushing all wages down, including their future earnings. They may find next year, once they’ve gained more experience, they aren’t given a raise simply because this years batch of students are willing to work for even less. And some producers prey on these types of people and employ essentially students to do their work for free or cheap.

The point here is that we should be looking for solutions to the problems of the vfx industry. Outsourcing and tax incentives are some of the problems. Overtime and overtime pay is another issue. Being forced to be an independent contractor is another problem. I'm sure we could list many more but I'm hoping we focus discussions on potential solutions; throwing out and discussing possible ideas. Simply shrugging our shoulders and saying "woe is me" is not a solution.

It's not easy. This is a global problem but hopefully we'll be able to come up with some ideas to balance this out.

Thanks.

5 comments:

  1. Agreed. Lots of points.
    Odd thing is the generalizations like how much we make?!?!? um, do we make that much? Doctors? Right they make a lot more wtf was that comment?
    I wonder if that person really is a vfx artist. I feel I know people who I would pay anything to get them on my projects. And they are worth it! I feel most sr level artist would feel this way after see the scarsity of talent. You want talent in any industry you have to pay. It's not just vfx it's everything. The top chefs make bank.... That not unfounded. People respect talent and pay for it. That's how the world works. why can't you get a reservation at many restaurants around town? Bc they're freackin good! Same goes with vfx...
    Lame. It annoys me that those comments are general and exaggerated.

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  2. I agree with Mr. Squires as well. From my short experience I have seen that there is more bitterness and complaining then actual action. Which is as contagious as a disease. From starting my career in Europe I am coming from a mentality where I can NEVER make more in the same industry then my senior. This is great but can frustrate as well as this person sometimes can be less talented or quick as the younger person. Now working in the States I have seen that at most vfx companies talent is cherished and rewarded. It gives me as an artist the drive to become better and smarter every production and be that weapon for my supervisor. I am young, naive and by no means try to be as experienced as half the people on this blog, but I feel that most of the VFX outsourcing will be a cycle of events.
    At a certain point Mr. India and Mr. China will be having a lot of experience and will be looking at the work and talent that people in LA and London do and want that pay as well and will try to leave. Talent will be unstable there and countries like that (no disrespect intended) will be stuck doing the grunt type work. Why the work is so beautiful is not because of an army of cheap people but because of an experienced talented VFX supervisor artistically directing a great pool of artists.

    Thank you

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  3. I love how artists are quick to place blame on themselves and call themselves greedy. Meanwhile they never look at the corporations they work for and point out corporate greed.

    I wish I had someone to work for me that would blame and deprecate themselves for everything and exalt me, their boss. That would be a wonderful life.

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  4. I just stumbled across this when looking for a resource like vfxwages.com, which seems partly dead to me.

    While I currently don't have the time to read it all, I do agree with the overall tone, it is good to see when people publicly acknowledge the problems and would just like to make a few comments.

    Most importantly, in general terms... related to the anonymous comment containing "I love how artists are quick to place blame on themselves and call themselves greedy". It's not just artists. When you switch on the TV or read comments of people in other areas, it's all across the board. It's rarely the people who make millions who got greedy (well... always were, I suppose), it's usually those with low/middle or even NO income at all. Phrases like "Being poor today is not what it used to be", "We have to compete with China", "Unionized workers are lazy and overpaid", etc. are all over the place. It's not artists, it's this damn obsession of incorporating/parroting all that manipulative nonsense that is spread by those who would obviously just love to see slavery return in legal form. Hyperbole? Maybe for our field, currently. But there are other fields where it is not and the trends are similar. Just like with the "outsourcing and tax incentives" - it's really great to see companies getting government subsidies (apparently without strings attached?) that result in heavier investment abroad AND the companies partly don't just not pay taxes but even receive refunds. So to sum up: exploiting workers abroad while getting subsidies and refunds at home. Great.

    More about our industry and specifically to the point about VFX students looking for employment. This is a case where I'm afraid I'm not too happy that you have sort of blamed the victim. Sure you are basically right with everything you say but I don't think it's reasonable to demand of students to not let themselves be exploited. What else are you supposed to do if you're already at home for half a year or a year, mooching off your parents because no non-exploitative company is looking for people?
    Or in my case, I had to be able to survive in a foreign country or return home. And I did find at least one company that exactly preyed on such people. But there I also saw that not all hope is lost. Because everybody I knew there was constantly looking for work somewhere else. They may be able to constantly replace those artists with new ones but that way, they will never build up a great team and business might just go downhill.
    At any rate... I think change cannot happen from the bottom, especially if the bottom has almost no control (just like replacing a couple of light bulbs won't save the environment...). Sure, one can and should fight but still, without a change in corporate culture and companies realizing that in the long run, they are likely only screwing themselves (oh how many complaints I have heard and read about unreliable employees, low quality work from India, etc. - well...), I don't think there's much chance of a change occurring.

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  5. "This is a case where I'm afraid I'm not too happy that you have sort of blamed the victim. Sure you are basically right with everything you say but I don't think it's reasonable to demand of students to not let themselves be exploited."

    The point is everyone, including students, should avoid being exploited. Students should exhaust all other avenues before allowing themselves to be exploited. If you're willing to travel to another country then you should be able to locate some type of paying job in the basic area you're interested in, especially as a new worker. Should they be forced to be exploited they should try to gain as much real knowledge and credits as quickly as they can and move on.

    "They may be able to constantly replace those artists with new ones but that way, they will never build up a great team and business might just go downhill."

    No, companies that exploit their workers tend to do crap work and will continue to do crap work. And at the end of the day how much have students benefited by having crap work on their reels? How much did they really learn given the amount of work put into it for free? Would they have been better off spending the time creating better demo material on their own?

    " I think change cannot happen from the bottom, especially if the bottom has almost no control (just like replacing a couple of light bulbs won't save the environment...). Sure, one can and should fight but still, without a change in corporate culture and companies realizing that in the long run, they are likely only screwing themselves"

    It needs to happen to all levels. Imagine a crap vfx company where all the workers decide to pickup and leave in mass. That's the power workers have that they tend to ignore. That is control. Sure 1 light bulb may not make much difference but what if you changed all or even most light bulbs? That would make a big difference. All it takes at a company for enough individuals to get together.

    Companies want to make as much money as possible. A small percentage of companies actually care about their employees but most do not. Management that exploits their employees will never realize they're screwing themselves. By allowing yourself to work for free you're saying my work, experience and knowledge isn't worth anything. And your employer agrees. Next, their clients will agree. And the downward spiral continues.

    Now a client comes along and wants a project done. To them they may think all companies are the same and one is able to do the work for 20% less (simply because workers are not being paid). Now the better company that paid their employees a living wage will either close or reduce their wages so they compete. And at some point you may only end up with crap companies treating employees poorly. Where will you work then?

    As I've said before a workers group (union or other) is the balance to companies that exploit their workers. In a reasonable government there are laws to prevent exploiting of workers but that can't be counted on and if the employees do not report it, it will continue.

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