Tuesday, April 28, 2015

The Cost of Retraining Workers in the 3D Industry


[In this post, we discuss what I am calling Strategy 2, which is that the disenfranchised worker attempts to leave the industry he has trained for and worked in by retraining him or her self by getting an advanced degree in a different subject at the university.   In a previous post, we discussed the out-of-pocket costs of Strategy 1, which is to try to persevere in the field he or she has worked in by staying current and attending various conferences.  You can find that discussion here.]

Lets examine the real costs to society of unemployment, especially unemployment that is caused by foreign subsidies that damage industries in other countries particularly our country, since that is what we have in the train wreck that is computer animation, that foreign subsidy thing.

A friend who believes in the free market says that those who got screwed by foreign government subsidies are worthless garbage who lost out on the “free market” and deserved what they got.  How an industry that has been devastated by foreign subsidies could be confused with a free market, I do not know. Besides, we have never really had much of a free market in this country, at least not for the rich. You know what they say, its socialism for the rich but the free market for the rest of us.  

Since employment in this industry in this country was severely impacted by these subsidies, and since our government failed to act, presumably at the request of the studios although again no one really knows, nevertheless we can calculate what it will cost to retrain these workers into another field.

But how many workers were displaced?   No one knows the numbers, so far as I know, and no one cares to know as far as I can tell.   But we can look at a few indicators and make our own rough estimates.   I am going to guess that the peak employment in this country for computer animation in the service of visual effects and animation was roughly in the years 1997 - 2004 or so.   If we look at employment then and compare it to now we will get a rough estimate of the change.

R&H goes from 600-1000 people to zero, Sony Pictures Imageworks which used to have over 1,000 people working has moved production to Vancouver.   Digital Domain which used to also be over 1,000 people I think are down to a few hundred.   ILM which was over 2,000 at one point is now about 500 according to one estimate of someone currently working there.    Dreamworks Feature Animation laid off 1,000 people in S. California and then closed their N. California office.   At this point we are nearing 5,000 people.

Now some of these people have in fact found employment overseas.   And some of these people, I do not know how many, will be able to slide into other careers with only some disruption.   Some will be able to work for Google, some for Facebook, and some will get married and have families while their spouse works. I think that it is mostly the mid-level and senior people who have specialized in computer animation and spent over a decade in that field who will especially suffer.  I do not know the numbers but I am going to guess here for the purposes of this post, 2,500 people.  I hope this number is conservative.

Unfortunately most of these people live in California which is very expensive, and many of them have significant others or families that they are supporting.   I estimate a minimum monthly expense of roughly $4,000 which breaks down to $2,000 for rent, $1,000 for utilities and food, $1,000 for car payment, insurance and everything else.  I realize that outside of California these rates might seem exorbitant.  But it costs a lot of money to rent in LA and SF and you don't get much for your money.  At least in NYC, you are living in NY, goddamnit, but not in LA and SF where it is merely expensive without returning any value that I can see.  And you need a car out here.  Those who do not drive will not be permitted to play.

There are several paths one might take to create a new career, but one of them, and the only one I am going to price here is to go to a university and get an advanced degree.   That will take 3-5 years and cost roughly $30,000 per year.  One might get a masters degree in computer science, or get an MFA in Art and look at teaching.

Thus if we estimate 2,500 people for three years getting an advanced degree then we get 2,500 * (48,000 + 30,000) = 195 million per year for three years or just under 600 million in total, adjusted for interest, net present value and what have you.

It goes without saying that the family goes off health insurance unless the school provides some, and I am not sure what the policy is for students with families.  It goes without saying that the kids get the substandard public education we give to our worker-swine, they don't deserve the elite education of private schools. Also that unemployment insurance, should they receive any and I never have in spite of what the law says or what is taken from my salary, is a pathetic joke and does not amount to much.

Now you may not care about these people and you may object to retraining them on theoretical grounds. You may believe that these people deserve to have their lives destroyed. But I disagree, I do not think they deserve to have their lives destroyed. I think that the society that failed to protect their jobs through greed or malfeasance has the duty to retrain them. That is what I think.

But even if you do not agree with me, then at least I hope we can agree that the people who made a commitment to this field, many of them at the urging of respectable organizations like SIGGRAPH, will now have costs they must bear in order to get into a different field in mid-career.  And those costs, paid for by the individuals affected, come to not less than $600 million over three years.  At least. My point is that there are real costs to society of failing to deal with this issue and of training too many people (or whatever we did) for this field.

The good news is that this money is easy to get. The studios have made much more money than this using the subsidies and making product based on the technology which we invented and was then shipped overseas to take advantage of slave labor and subsidies. So they have plenty of money. Have them pay. That would be only fair and I am sure that they will be happy to do so.

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