Digital Domain plans to have paying students make up 30% of workforce

[Update: 9/15/2012 DD has now closed their Florida facility. Some of the classes have been put on hold and certainly students won't be working at the DD facility as planned. But the post is still useful read since it clarifies some of the attempts to take advantage of workers, students and the visual effects industry]


In case you haven’t already been made aware of this Digital Domain (DD) is starting up a school in Florida which is funded by the Florida State government. I won't do a detailed recap here since that's already more than well covered on other sites. And thanks to VXFSoldier from bringing this up.

For more info and to see an extraordinary video: (I urge you to read the comments as well since most commentors make valid points. Check out Dave Rand’s comments as well.)

DD "Free labor is much better than cheap labor"  - VFXSoldier
"Paying to work for free" business model  - VFXSoldier
Questions and Reactions  - VFXSoldier
LA Times on DD Institute  - VFXSoldier
Paying to work for free - Motionographer
CEO brags about exploiting animation students - CartoonBrew
Free labor! - TAG, Animation Guild
Working = money, right? - Canadian Animation Resources

DD will be making money off of the students ($105k tuition) in a for profit school (as other most for profits- turning out more visual effects graduates than there are openings). But the additional kicker is they setup a studio in Florida where 30% of the workforce will be made up of students.

For those who might think that would be good for the students and don’t see the harm:
1. it is against Federal law to have interns and others working for free doing work that is productive (i.e actually paying positions).

2. The reason this is a law because any business could simply staff up with non-paying positions (interns, students, experienced… doesn’t matter). There are enough people hungry for certain types of jobs that would be happy doing them for nothing. Businesses would be more than happy having free labor, even if it meant more poverty. That’s why there are also minimum wage laws. (unfortunately they’re still below the poverty line). In a perfect world businesses would be a balance of making great products or services, making money and treating people fairly. In the real world today the name is greed. In days past a mom and pop store tried to be responsible and to consider the consequences. Today most companies are owned by stock holders and investors who’s one and only focus is squeezing more of a return out of company. The CEOs and others in management fall in line so they can get their slice of the pie too. They take no responsibility for these types of actions and simply blame it on the shareholders.

3. These students are paying a lot of money to work there. So they’re not just working for free, they’re paying to work. Double bonus for Digital Domain to get paid by clients and workers.

4. Once it becomes possible for a visual effects company to staff up to 30% of their labor with students paying to do so, it’s possible for not only other visual effects companies to do so, but any other company to do so.

5. If 30% of the work force are students paying to work, why would companies hire people? Why should they hire you, an experienced visual effects worker, when they can get someone better than free?

6. This leads to the question of where all these graduates will be working. They’ve paid$105,000 to do this and likely taken out loans to do so. They expect to be hired since they’ve be taught specifically in visual effects. DD in Florida will already be staffed up. They have a steady stream of students paying every year so there will be little need for them to hire these graduates.

7. DD can now offer a 30% discount on any work done in Florida. Actually more than a 30% discount since they’re getting money from the students. How will other visual effects companies compete? Why starting their own students paying workforce of course!

In the end this means more imbalanced competion for both companies and workers.
This means lower of rates for all companies and all visual effects workers and actually creates less opportunities for new graduates. The only one to profit from this is DD and only in the short term. Florida will gain little and spent a great deal of tax money that could have been used productively.

To potential students:
There are much cheaper ways to become educated in visual effects if that’s what you want. There are online classes, books, DVD’s, etc. There’s no need to go 10’s of thousands of dollars in debt if all you want is visual effects education. If you want to get a college diploma that’s fine and serves it’s purpose but beware of those offering it.

Getting into visual effects is hard. The visual effects industry is going through some rough transitions currently. Be ready to move elsewhere. No school can guarantee employment.

All that stuff about getting credit on films, etc. - Forget it. These days politicians, CEOs and Hollywood produce far more BS than the world needs. Those of us who have been working for a while have seen far too many examples of unkept promises and sugar coating. Don’t be suckered for these.

The CEO is surprised that more visual effects workers aren’t jumping at the chance to pickup and move to Florida. They’re not jumping because most of us know the drill. The lure of working in another place with an unknown future. Sure, we’ll be more than happy to sell our homes, uproot our family, say goodbye to friends and move. And at the end of that project when they don’t have much work you’re laid off. And without many other visual effects companies in the area you’re forced to return to where you moved from. No thanks.
[Update: 9/10/2012 Unfortunately this came true. The DD studio in Florida has closed down and the workers there were laid off without warning and without severance pay. From what I gather most had moved there from other locations, many selling their homes. These unfortunate workers are now in a location without other similar jobs so they will likely have to move back to where they were or to another location. Moving is not cheap, especially if you have a house of furniture and possessions. And trying to find a new job in this industry is not easy. ]

The CEO actually talks about VFX being a dying industry and is expecting you to work on military or medical projects after graduating. This comes after they’ve sold you on the dream of working on Hollywood movies. Most of us got into visual effects because we wanted to create content and work on films and tv projects. While I applaud the use of visual effects technology to help with medical causes, you should be aware of the distinction. For an animator who wants to bring characters to life it’s a much different job if you’re animating a heart or military aircraft. The CEO makes the mistake that labor is simply a commodity. If you went to school to be a painter of fine art, would you be happy when the school says at the end: “Sorry, there’s not much call for fine artists but there is a large need for house painters. Enjoy it.”


Those who live in other countries may think this has nothing to do with them. As I’ve said before, we’re all connected at this stage. If there’s a major change in pay or working conditions somewhere in the world regarding visual effects, then it will likely affect you sooner than you think. That 30% discount that DD can now offer is on par with many tax incentives. That alone could shift the balance. 30% of labor that pays to work will cause a downward spiral in pay. And the company you work for and the studios will point that out and say that you will have to follow suit. “After all, we have to remain competitive”. And around it goes.

I urge all visual effects workers to step away from their workstations for a moment and check in with the rest of the world. There’s a lot going on. I know it’s great focusing on what you’re doing but there are large changes in progress throughout the world that will affect you and your future. You can’t simply ignore it all and hope it never affects you.

You should also educate yourself on unions and trade associations. Please don’t fall prey to the stereotypes or the paid for misinformation. There are pros and cons of each of these and you should be aware each has different goals.

Some of the things that are happening to the industry you work in, hopefully doing what you love, should make you angry. It should make you sit up and take notice. If that’s the case, make yourself heard. If you have thoughts, opinions, solutions, make yourself heard. If you know of problems let yourself be heard. The internet and social media has opened up and connected us in ways not possible before.

For those you would like to speak out about what DD is doing in Florida, contact and tell them what you think.

Commissioner of the Florida Department of Education: Commissioner@fldoe.org

Wage & Hour division of the Department Of Labor: http://www.dol.gov/whd/america...

Bonus: Should I work for free chart

Other sites of interest:
ImageWorks artists in support of a better VFX Industry - SPiUnion - info about unions and other things

Game of Aeron Chairs: A song of beer and pixels - tk1099 on vfx unions and movement

Supermodel sets up an Alliance with Bill of Rights and push for health care and better working conditions.
Initial story
Alliance site

In the last few months car washes, sandwich places and now supermodels are either unionizing or creating a group to at least represent them and help improve their situation.
What about us?

How do these things tie together?

Early last week I posted about what was going on in Wisconsin and how that tied into Unions, the Middle Class and Visual Effects.  A couple of posters took issue with my posting so let’s review a few things.

I started this blog and podcast to cover visual effects issues that weren’t covered elsewhere.  I wanted to provide the full spectrum of vfx knowledge based on my experience.  I had no interest in yet another blog about setting key frames in Maya.  To that end I’ve covered budgeting, careers, creative choices, technical concepts, business and other issues.

One of the larger issues that Visual Effects workers have to deal with is quality of life and benefits. I think these are important issues to those involved professionally in visual effects and those planning to get involved in vfx as a career.  Many things have been changing both locally and globally that need to be addressed.  So that’s why I’ve written a number of posts about these issues and will continue to do so if I think there is something new to report or discuss. You may be with a company or in a country such that you’re not directly impacted by any of this and just want to ignore it.  But at the end of the day this is all interconnected, like it or not.  The fact you may not seeing it first hand doesn’t mean it’s not happening.

Visual Effects has always been a field that has had its ups and downs based on the amount of work available.  In the last several years many countries and states have been offering various incentives to productions.  That combined with emerging vfx globalization has caused a number of vfx companies in the U.S. and more specifically California, to close.  Many vfx artists have had to travel to other locations around the world to keep working. The visual effects work done around the world have helped US studios make record profits and yet vfx artists are often considered as secondary to many of the other groups in filmmaking.

VFX are the last link before a film is released and as such most vfx artist put in a lot of hours, especially toward the end of the production.  90+ hrs is fairly common at times. So what happens to those people who put in all that time? Most are laid off at the end of the project unless the company has another film or tv project lined up. And when they are laid off any benefits they had soon go away as well.  VFX is one of the few areas in motion pictures not covered by unions. Many vfx companies are in a race to be the cheapest supplier of vfx so they can compete with 20-40% tax incentives.  One of the ways this is done by forcing artists to be independents contractors with no benefits who then have to pay all taxes and benefits themselves. At the end of the day in many parts of the world, and certainly in the US, it’s the employees that are being squeezed between the studios and vfx companies.

Last year Lee Stranahan wrote an article in the Huffington Post addressed to James Cameron regarding fairness to vfx artists.

This started the ball rolling to finally have vfx artists speaking about some of the issues that they face.

Lucasfilm and Pixar, two of the most successful vfx and animation companies, have been charged with collusion by the Department of Justice in order to avoid competing for animators and to avoid increasing wages for these artists.
Who’s looking after the artists?  Currently only the artists are looking after themselves and most don’t.

One of the problems has been those of us in vfx enjoy the creation process so much and are so focused on the actual work we often lose sight of reality with the rest of our lives. Having a balanced family life and being continually covered for such things as health care and retirement at time seems like a pipedream.  Some of those who worked on Star Wars are now closing in on retirement without a lot to show for it.  Many of the digital age are being burned out or being left behind by productions going elsewhere.

VES
So what can be done to help the state of vfx artists?  How do we help ourselves and the business we love to work in? There is the Visual Effects Society (VES) which provides a worldwide professional organization that helps to raise awareness of VFX, provides education and standardization.  Many in the vfx community have looked to the VES to handle all of these other problems but the VES is not a union or a trade organization.  For it to become either of these would akin to the Academy of Motion Pictures and Television to become a union.  That’s not its role.

There are many in vfx that say the VES should do this or that.  The VES is a non-profit involving primarily volunteers.  (I’m on the board of Directors of the VES and as such volunteer my time as I did with the VES Handbook.) And here is the issue that is repeated here.  If you want something then please step forward and lend a hand.

Union
We are now at a crossroads. This fall 2 unions (IATSE, IBEW) stepped forward and have offered to represent vfx artists.  This is a moment of time that won’t last forever.  In a year or two the window will be closed and that will be that, so it’s important that everyone involved with visual effects get educated about these issues and what it means to their future.  Some of the vfx companies have also been meeting regarding setting up a trade organization.  I think both of these would be beneficial to raise the level of vfx production and balance it for the artists and companies.

There are some people saying a VFX Union will be the nail in the coffin for vfx in the US.  We’ve already been non-union and that hasn’t stopped jobs from going elsewhere for the last 10-15 years.  (The unions can’t stop jobs from going elsewhere either.)  So what do these people propose?  Please, post a working solution.  I don’t think ignoring it is going to help. Just how far do you want your benefits and wages to fall before it’s enough?  If low compensation is the only thing keeping vfx in the US then we’d all better be ready to drop our compensation in half to compete with government incentives elsewhere.

This is a note from the Oscars:

ABC News' Chris Marderosian reports:

At the Academy Awards tonight, best cinematography winner Wally Pfister made a point during his acceptance speech of thanking his union crew on “Inception.”

Backstage he went further, expressing shock at Wisconsin Gov. Scott Walker’s budget proposal, which would limit union’s collective bargaining powers. Opponents of the plan have been protesting at the state capitol for 21 days.

“I think that what is going on in Wisconsin is kind of madness right now,” Pfister says. “I have been a union member for 30 years and what the union has given to me is security for my family. They have given me health care in a country that doesn’t provide health care and I think unions are a very important part of the middle class in America all we are trying to do is get a decent wage and have medical care.”

Shouldn’t vfx artists be able to get the same benefits as everyone else in movie and television production?  Just about everyone on stage giving and receiving awards were in unions.  Directors, writers, cinematographers, actors, etc.  Or should we simply try to ignore the situation and continue to have people working as independent contractors with no benefits since that seems to be working so well.  This is not your father's union.  It is up to those in vfx to step up and help make it what they want.  The Animation Union has a posting with related information.

So what does this have to do with Wisconsin and the middle class?  One of the comments was that I was making a big deal about nothing.  There was a similar comment when I discussed health care where the commenter thought I had been exaggerating the issues and costs.  Yet the costs I quoted for health care are what I had to pay in real life. These are facts.  My daughter is in her mid 20’s.  Her insurance increased 19% last October.  She just received a notice that it will now be increased another 19%.  This goes into effect just 6 months since the last increase.  I wish I was exaggerating but this is happening in real life.  If you’re in a location or situation you don’t have to deal with these issues then consider yourself lucky but don’t dismiss them as exaggerations of others.

Middle class – newsflash: vfx artists are the middle class.  We work for a living.  We work long hours trying to make a reasonable living for ourselves and our families. We’re not kicking back and making multimillion dollars off of investments nor are we on the street (although some are coming close).  In case you hadn’t noticed the world economy tanked a couple of years ago.  This was caused by bankers and those on Wall Street.  The rich.  And who exactly has had to pay the price for that problem?  Us.  The workers.  The middle class.  Higher costs, home foreclosures, less jobs, less benefits.  Many laws were broken and incredibly bad decisions were made but the rich aren’t being fired nor is there even consideration to prosecute any of them.  Many received bonuses for driving the companies into the ground. Do you think you'd get a bonus for doing bad work in vfx? Bonuses were in the billions on Wall Street.  What was your last bonus? (Bernie Madoff was a fluke and the only one to get into trouble.) There is still no form of regulation.  This will happen again.  Even though the pay of CEO’s has skyrocketed in the last 20 years, most working wages have been much slower to rise and in fact most workers compensation hasn’t kept up with the cost of health care and other costs.

The unions have helped to provide some standards for working that has lead to the middle class.  The workweek, vacation, etc can be traced back to many of the issues the unions have fought for.  You’ve already benefited from the unions even if you didn’t know it.  Guess which way things will shift if the unions and any type of worker groups are denied? Do you really think companies are going to be jumping in and adding benefits even after the economy gets back on track?

One of the commenter’s thought I had made this into a us versus them type of argument.  I didn’t create the situation but when you actually take the time to read the facts and figures it’s hard to ignore the reality.  There are people focused on specific agendas and improving the world for everyone is not on their list.

What’s happened in Wisconsin and has been happening in other parts of the world is that at some point those working in the trenches finally say enough is enough.   Will that ever happen to you?   Will people be willing to take a stand for themselves and their future?  Should that be happening in visual effects? Are you willing to step forward if you don’t think something is right? Or will you stand on the sidelines?    Related: VFX Solder posting


Wisconsin – On the surface it sounds simple enough.  To help balance their budget the state is asking the people who work for the state to reduce their wages and their benefits, because after all, we all have to tighten our belts.  In visual effects there’s the term “smoke and mirrors” to create an illusion.  And in this case it’s “smoke and mirrors” to be used for its dirtiest deed: propaganda without any truth.

Here are some of the Wisconsin issues in a nutshell for those that don’t like to follow links. For those interested I have a number of links at the end covering all this and more in great detail. Amazing and appalling.

Historical info:
In 2008 Scott Walker was chief executive of the Milwaukee County Board. He was trying to slash union positions and yet at the same time he was trying to get increases for his aides of 11-26%.  He attempted to bypass the county supervisors and make it so.

In early 2010 he wanted to fire 26 union security guards that worked for the county to ‘save money’.  The county board rejected the idea.  He then ignored the board and fired 26 union security guards.  He claimed it was a budget emergency.  Now instead of hiring a local company to provide security (and jobs) Walker hired the non-US security company Wackenhut, the same company that had major problems with their employees in Kabal. (Drunk and naked among other things).  The person who was put in charge of this security team was an ex-convict.  In January of this year a state arbitrator deemed there was no such budget emergency and that Walker had over stepped his bounds of authority.  The county is required to rehire the guards that had been fired and pay them their back pay.  Cost to the county: over $400,000.  Walker would have been fired at most companies.

So what about the current budget woes and emergency?
From the February 18 New York Times editorial, "Just last month, he [Walker] and the Legislature gave away $117 million in tax breaks, mostly for businesses that expand and for private health savings accounts. That was a choice lawmakers made, and had it not been for those decisions and a few others, according to the state's Legislative Fiscal Bureau, the state would have had a surplus."

Odd, for someone who wants to balance his budget he’s put the state in even more red.  I wonder who he can get to make up for these trumped up budget woes?  Who should he blame as the reason for the budget problems?  Why the state union workers of course.  He’ll blame them for causing the financial troubles in Wisconsin and appeal to non-union workers that these union workers are getting way more benefits and aren’t willing to tighten their belts like everyone else.

Many state workers in Wisconsin are covered by unions. Nurses, teachers, firemen, policemen, etc.  They had worked out contracts with the state to be paid at a lower wage rate than most private workers but with higher benefits.  As the years have progressed wages and benefits for private sector workers slowed and in some cases started going backwards.  So now the state workers, who have been doing their jobs and have contracts, are being asked to make up for the Wall Streets melt down and the politician’s self created financial problems.  Note here that some of the unions are being targeted and others, who supported Walker’s election, are not. And so the unions said they were willing to cut back on both wages and their benefits to help out but the governor has refused. He wants to end any type of collective bargaining.  So the main thing he claims to want to do, balance the budget, is not really want he wants to do.  Eliminating collective bargaining itself doesn’t save the state anything.  The latest information is it will likely cost the state almost $47 million in loss of Federal transit aid.  Wow, he’s saving the taxpayers money right and left.
Workers: -1  Wall Street: Bonuses

Among the gems folded into the current Wisconsin budget proposal:
The ability of the state to sell any power plants without bids and without input.
Full control over Medicare by a small committee with no public input.

Taxes
While the middle class is being shaken down and all public projects are being eliminated it’s mind boggling when you find out that much of this could be eliminated if the government simply closed the tax loopholes for the rich and companies.

One thing that’s currently happening in the UK is some people have realized all of the things that are being slashed to save money (Children’s hospitals, etc) would be fully paid for if companies and the rich were actually taxed.

Warren Buffett discovered he was paying a lower tax rate than his secretary and has spoken about how unbalanced the tax structure is.

“As he [Carl Gibson] says, if you have “one dollar” in your wallet, you’re paying more than the “combined income tax liability of GE, ExxonMobil, Citibank, and the Bank of America“”

Summary
So should workers have any rights?  Should the working middle class shoulder even more? Should VFX artists have rights?  I hope this has provided at least a little more insight to how these issues interconnect.

(I have some specific VFX postings in the works but in the meantime feel free to check out some of these links).


Original links
Wisconsin Power Play

Rachel Maddow

Billionaire Brothers’ Money Plays Role in Wisconsin Dispute

Why am I here?

Scott Walker Padded Salary Increases for Cronies During Budgetary Distress

Money Won’t Buy You Health Insurance

Wisconsin
Top 5: Why Wisconsin Matters To You

Rachel Maddow 1
Rachel Maddow 2

Rachel Maddow 3

Rachel Maddow 4

Are These People Overpaid?

Walker’s Budget Plan

The Last Time Scott Walker Went Union Busting, He Was Overruled And Wasted Taxpayer Dollars

Gov. Walker Informed That Bill Targeting Unions May Cost State $46 Million In Federal Funds

Lessons for Wisconsin from Flint 1936-1937

Who 'Contributes' to Public Workers' Pensions?

Shock Doctrine, U.S.A. 

Scott Walker's Plan To Take Control Of Medicaid Decisions In Wisconsin

Public Unions In Wisconsin, Elsewhere Are Scapegoats

Bigger Picture
Our Economic Pain Is Coming from Big Industry CEOs, Not Public Employees' Unions

Plutocracy Now: What Wisconsin Is Really About

It's the Inequality, Stupid.  How Rich are the SuperRich? Graphics

Gov. Chris Christie: The Biggest Sham In American Politics

Koch funnels money to govenors fighting unions

What the Right-wing Assault on Women, Unions, the Environment, Health Care and PBS Is All About

Unions and the Rich

The Liquidation of Society versus the Global Labor Revival

Union-Busting Is Theft -- a Weapon of Class Warfare from Above

Budget cuts to cost 700,000 jobs

Wall Street
Why isn't Wall Street going to Jail (Excellent article)

Taxes
How to Build a Progressive Tea Party - How people in the UK are fighting back (Excellent article)

You Have More Money In Your Wallet Than Bank Of America Pays In Federal Taxes

Warren Buffett:  Raise My Taxes  (Warren Buffett’s tax rate is 16-18%)

US Uncut

UK Uncut

10 step guide to launching US uncut  

Film incentives

Here are a couple of references to those interested in film incentives.  I included these in response to a comment but thought I should also make it full post.


Report on the impact of incentive programs elsewhere and what that has done to the Calif film industry.

"If the state had maintained its former level of dominance, a total of 36,000 jobs would have been saved. The wages and output associated with these jobs would have totaled $2.4 billion and $4.2 billion, respectively."\
(I think there are many more post-production jobs than this lists)


Full Report


EntertainmentPartners Web site with info on film incentives in different states and the world: