Thursday, 19 May 2022

It's Fairly Compensated

In recent years there has been a strong push for 'fairer compensation' of artists, meaning that they should be receiving more money, particularly when they are invited to work on projects. Given that many artists already get a sizeable chunk of their income through government subsidies, from an economic point of view 'fairer compensation' would probably mean less pay for artists, not more. 
 
This is a simple, factual observation that can't really be argued against. If it seems wrong to you, then there is probably a misguided sense at play about how or why people receive remuneration. The thinking is likely that the amount of money one receives is somehow related to the quality of the service or goods one produces and the fact that it has been produced by them. Taken this way it would indeed be reasonable to claim that artists are underpaid, as a good deal of them are highly educated people with high standards who perform a great amount of work to do the things they do. 
However one's pay is not based on the quality of the good in and of itself, nor on the work that it took to produce it, but rather on how much somebody else values that work and is ultimately willing to pay for those goods. This depends far more on the buyer's perception of the good and is no way directly related to its factual qualities. In such a mechanism substitute goods also play an very important role. 
 
There is a common example where for a museum exhibition the technical staff is paid more than the artists on display. It's easy to see why this is the case if we forget who is more 'important' in this scenario, but instead think of it in terms of who is more easily substituted. If the museum wants to attract the competent technical people it needs to create museum-quality exhibitions, it will have to compete with other possible employers of those tradesmen, of which there are many. For a carpenter a museum is simply one of many possible employers. The museum thus has to pay at least a wage that those employees would be able to earn elsewhere if they want to attract them to working for the museum.
And the same is true for the artists. In order to attract the artists, the museum has to pay the artists the kind of wage they would be able to get elsewhere for the same work. As there usually are little, if any, other opportunities for the artists, there is no need for the museum to pay them anything at all and consequently that thus rarely happens. If however an artist insists on being paid for their work, then the museum probably has a large number of artists it could choose from who would be willing to mount the show for less.
This is but a simple explanation for one of the most common examples of unreasonable or unequal pay for artists, but such basic economic principles apply throughout.

The pay of artists is low because the supply of artists and artworks is far greater than any realistic demand at the present time. There simply aren't enough interested consumers for the 10.000 or so artists that are currently working in the Netherlands. In fact, the total volume of art bought by private citizens in the Netherlands in 2011 had a value of 141,6 million euro's. On a population of 16,69 million in 2011, the average amount spent on art by a private citizen in the Netherlands was € 8,47. Roughly the price of a pack of cigarettes and a single cup of coffee at the time. 
Even without any comparison to other industries it is easy to see that there is plenty theoretical room for this demand to grow.
 
The problem thus lies on the demand side, with underconsumption, or perhaps overproduction, being the main culprit of low wages for artists. However, the solution that is often brought up is that artists should simply be paid more. As the market isn't going to do this on its own, the largest Dutch government fund has actually offered more subsidies to pay artists directly when working on a project. It should go without saying that solving a problem caused by overproduction by putting funds towards stimulating production is not a particularly efficient approach.
Instead if one truly wishes for artists to make more money, which is what 'fairer compensation' ultimately means, then it would be a far better idea to find ways to create greater demand for art.