Workers of the New World Unite!

By John Gapper
Published: December 12 2007

Given that the US has one of the lowest rates of union membership in the industrialised world, it is not the obvious place to find the future of organised labour.

Only about 7.5 per cent of private sector American employees are in a union and many of those are manual workers in manufacturing industries such as carmaking. One has to search hard to find many service sector professionals in unions.

Maybe the simplest explanation for that is that it is not worth joining a union. Although the median US union member earns more than average – $833 per week against the national median of $642 in 2006 – that owes a lot to the fact that many work in the public sector. Many private sector employers ruthlessly exclude unions, as they are allowed to do.

The best-rewarded workers in recent years have not been those with a union on their side but those who can bargain for themselves, or employ an agent or lawyer to do it. The chief executive, the sports star, the actor or actress – anyone who comes under the mantle of “talent” – stands a much greater chance of being well-paid than a union member.

How, then, to account for the sudden upsurge in labour militancy in the unlikely quarter of the television and film industries? For the past six weeks, 12,000 film and television screenwriters in the Writers Guild of America have been on strike to get, among other things, a bigger share of online revenues.

In the past couple of weeks, another dispute has erupted in the television industry. Hundreds of young people employed on long-term freelance contracts by MTV Networks in New York – so-called permalancers – protested after Viacom, MTV’s parent company, changed their contracts to reduce their entitlement to health and pension benefits.

Strange as it sounds, I think these disputes hold lessons for workers in many industries, not just for New York’s “creative class” of media professionals. But they must do more than hark back to the glory days of 20th century unionism.

The driving force for the labour unrest is clear. Film and television companies used to have lots of money because each new form of distribution – from cable television to DVDs – added more revenues. The internet broke the cycle, leading Global Media Intelligence, a research group, to conclude that Hollywood must “begin a serious effort to rein in costs”.

The easiest place to start is staff costs, which is why many employees are feeling the squeeze. So far, however, there are only haphazard signs of Hollywood talent, with its multi-millions share-of-revenue deals, getting pinched. Sumner Redstone, who controls Viacom, noisily broke up with Tom Cruise but most Hollywood stars are still doing fine.

Things are tougher for junior employees – writers, assistants and designers who swarm around film and television studios. Many work from project to project and are officially freelancers, although it would be more accurate to call them employees. This saves tax but means they have poor pension and health benefits.

Striking collectively to gain better terms, or at least to stop employers from weakening the existing ones, sounds like a sensible thing to do. It fits with the union tradition of individuals banding together to raise their bargaining strength.

A short strike that attracts publicity but does not involve much financial sacrifice can be a good weapon. The MTV freelancers have pushed their employer on the defensive with a couple of brief walk-outs that had news value (and could be watched on the internet). They seem to have learned a trick from the short strike at General Motors this year.

A long strike is another matter. The writers’ strike is well into its second month. It has hurt the networks, with late night talk shows off the air and popular dramas about to follow. But writers are themselves losing money and the strike could accelerate the long-term decline in the audience for television and films.

Nor is it obvious that collective bargaining brings the best rewards for employees in the media industry. If an individual is regarded as one among many, his or her rewards are likely to be worse. Writers clearly suffer from being more anonymous and interchangeable than directors or on-screen stars – being part of the “writers’ room” implies lack of individual recognition.

Collective bargaining has a role in this world – to set standard contract terms or percentages for royalties and residuals – but individual negotiation is where the big money lies. Many technicians and writers are freelancers because it suits them: they get greater freedom to work across the industry and earn more.

Where collectivism could bring unadulterated rewards is outside the workplace – by providing health and pension benefits that freelance workers do not get. It is no coincidence that the MTV freelancers were angered by having their health benefits reduced. If you do not have health insurance in the US, you take a huge financial risk.

US unions are starting to take over responsibility for organising health benefits for members; this was a centrepiece of the GM settlement with the United Auto Workers union. Logically, there ought to be a place for unions or mutual organisations to establish health insurance and pensions for freelancers. Indeed, the Freelancers Union, a New York-based mutual group, is already doing so.

The idea that workers should band together outside the workplace is old: the co-operative movement has a long history in both the UK and US. But its insurance-based health system and defined-contribution pension schemes make the US fertile territory for the workers of the new world to unite.

john.gapper@ft.com
© Copyright The Financial Times Ltd 2007.