Christopherson and Storple - The Effect of Flexible Specialization

8/12/2019 Christopherson and Storple - The Effect of Flexible Specialization

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The Effects of Flexible Specialization on Industrial Politics and the Labor Market: The MotionPicture IndustryAuthor(s): Susan Christopherson and Michael Storper

Source: Industrial and Labor Relations Review, Vol. 42, No. 3 (Apr., 1989), pp. 331-347Published by: Cornell University, School of Industrial & Labor RelationsStable URL: http://www.jstor.org/stable/2523392.

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THE EFFECTS OF FLEXIBLE SPECIALIZATIONON INDUSTRIAL POLITICS AND THE LABORMARKET: THE MOTION PICTURE INDUSTRYSUSAN CHRISTOPHERSON and MICHAEL STORPER*

The authors, iting istoricalnd statisticalvidence panning hreedecades, xaminehowthetransitionoflexiblypecialized roductionorganizationnthemotion icturendustryaschanged hedistributionofwork ndwages nd thedefinitionf skills. ne importantesult fthat rocess asbeenthe mergencefa newformf ntra-occupationallabormarketegmentation,ased much ess on differencesn hourlywage ratesthanon differentialccess to hours of work.Also, thereorganizationf the production rocess has altered the relativebargaining owerof employersnd workers nd of differentroupswithin he ndustry orkforce, esultingn increased onflictmongsegments f the work force and a strengtheningf employers'bargaining owervis-a-visndustrynions.

JNHE advanced ndustrial conomies,new forms of production organizationare reshaping labor demands and, as aconsequence, altering a wide varietyoflabor marketprocesses. n one ofthemost* Susan Christopherson s Professorof City andRegional Planning, Cornell University,nd MichaelStorper is Professor of Architecture and UrbanPlanning,University f California-Los Angeles. Theresearch for this study was funded by the JohnRandolph Haynes and Dora Haynes Foundationandthe UCLA Instituteof Industrial Relations. Theauthors thank Larry Barth, Robin Bloch, GillianCourt, Rebecca Day, and Rehema Grey for theirresearch assistance,the Motion PictureHealth andWelfare Fund for access to unpublished data, andAllen J. Scottand Sanford Jacobyfor commentson

an earlier draft.The computer program used in this study wasSPSS. The data provided by the Motion PictureHealth and Welfare Fund that were used in thisstudy are available on request to the authors,provided that written permission is firstobtainedfromMPHWF. Mail requests, nd documentation fpermission, to: Professor Susan Christopherson,Department fCity nd Regional Planning,106WestSibley Hall, Cornell University,thaca,NY 14853.

significant f these new forms, complexof firms s tied together by an elaboratestructureof transactions, ncluding ex-changes of information,material input-output flows, nd personal contacts.Thesevertically disintegrated industries havebeen dubbed flexibly pecialized becauseindividual firmsare specialized but thecomplex as a whole is flexible-its mix ofoutputs can be changed by altering thegroup of firmsparticipating n the pro-duction of any particular output (Pioreand Sabel 1984; Storperand Christopher-son 1987). This formof industrial rgani-zation has generated new types of jobs,employment relations, and processes ofwage determination. Flexible specializa-tion has been adopted by such diverseindustries s textiles n Italy,tool-makingin Japan, and mini-millsn the U.S. steelindustry.In thisstudy we show how a transitionto flexibly pecialized productionorgani-zation in the motionpicture ndustryhasIndustrial nd LaborRelations eview,Vol. 42, No. 3 (April 1989). ? by Cornell University.0019-7939/89/4203 01.00

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332 INDUSTRIAL AND LABOR RELATIONS REVIEWchanged the distributionof work andwages and redefined skills, institutingnew form of intra-occupational labormarket segmentationbased on the num-ber of hours worked per worker. We alsoargue that the reorganization of theproduction process has generated in-creased conflict between employers andworkers and among different groupswithin the industry work force. Thoseinstitutions, uch as internal labor mar-kets,that created workforce solidaritynthe mass production ndustrieshave beenundermined under conditionsof flexiblespecialization.

OrganizationalChange and thePolitics of ProductionFor 35 years, studiesof labor relations,the labor process, and labor demand haveconcentrated n industrieswith ne oftwodominant types of production organiza-tion: mass or large-batchproduction inlarge, vertically integrated firms, andsmall-batch r labor-intensive roductionin small firms.The former employs thecore workforceof an advanced indus-trialeconomy,and the latteremploystheperipheral workforce,which ncludesahigher portionof casual labor (Doeringerand Piore 1972). These production orga-nization types have also implicitlybeenassociated with particularformsof pro-ductionpolitics.Politics of production refers to theexplicitprocessesof contestation, egotia-tion, nd bargainingbetweenworkers nd

employers and among segments of thework force, togetherwith the substantivebases of power and interest hat underliesuch processesand theformal nstitutionsinwhich heymay be embedded (Burawoy1985). The politics of production in anindustrys thus rooted in interdependen-cies and tensions between workers andemployers nd among groups of workersand underlies explicit bargaining pro-cesses.For example, the technological struc-tureofmassproduction nNorthAmericaand Western Europe in the past fewdecades has put largenumbersof workers

in a similar position in relation to theproduction process. These mass-collective workers have exhibited highlevels of work force solidarity nd havecontributedto militant ndustrial union-ism (Murray 1983). On the other hand,the technical division of labor rendersthese same workers nterchangeable, ndso they do not have great skill-basedbargaining power, yet employers stilldepend on them to keep their capitalequipmentoperatingat high-capacityev-els. Thus, massproductionmethodscreatea distinctivepatternof political interde-pendenciesbetweenworkers nd employ-ers (Storperand Walker 1983).These interdependenciesand tensionsare resolved through the labor marketinstitutions, uch as the internal labormarket, that developed in post-WorldWar II mass production ndustries n theUnited States. Through internal labormarkets, uch as those at U.S. Steel andFord MotorCompany, obs are organizedhierarchicallynd job tasksare definedinminute detail. To increaseworker attach-ment to the firm, jobs are awardedaccordingto seniority,nd promotions reofferedto reward employees for increas-ing theirfirm-specificnowledge. n addi-tion, entry-levelwages are set above theeconomy-wideverage.There is, however,a large internal wage spread because ofthe need to retain workers with firm-specific human capital. The politics ofproduction in vertically ntegratedmassproduction industries is predicated onthese underlying onditions.The internallabor market and multi-year greement,for example, combine to divert latentmilitancyntobureaucratic hannels.The motionpicture ndustry, he subjectof our case study, has undergone atransition rom mass productionmethodsto flexible specialization. As productionhas become more flexibly pecialized andvertically isintegrated, he conditionsun-derlying the politics of production informerly ertically ntegratedfirmshavealso changed. In the contemporaryndus-try, he distribution f workamong firmsand individual subcontractors reatesnewdivisions within he work forceaccording



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THE FLEXIBLY SPECIALIZED MOTION PICTURE INDUSTRY 333to differentialtabilityfemployment, otonly among firms, ut also among groupsof workerswithinthe same occupation.Certain skills are also redefined. As aresult, the bargaining power of somegroups is reduced and that of othersincreases. New alliances form as olderones dissolve, and a new politics ofproduction omes intobeing.

The Studio System :The MotionPicture ndustry'sAnswer toMass ProductionDuring the golden age of the motionpicture industry,from 1920 to approxi-mately 1950, filmmakingwas organizedaround mass production principles.Theproduct was standardizedin the form ofthe formulapicture, and most produc-tion was carriedout under the aegis of asmall number of oligopolistic,verticallyintegratedfirms, he major studios. Theproduction process established in thisperiod consistedof pre-productionselec-tion and preparation of the script andbacklot), production (construction f setsand filming),and post-production filmprocessing, editing, and sound). Majorstudiosassigned permanentstaffs f writ-ers and production planners to produceformula scripts in volume. Productioncrewswere assembled into teamschargedwithmakingas manyas 30 filmsper teamper year. This factory-likeproductionorganization, popularly known as thestudio system, was well establishedthroughoutHollywood by the 1920s and

prevailedthroughthe 1940s.The labor force was broadly dividedbetween talent nd craftworkers.Thesecategorieswereassignedseparate places inthe filmbudget. Among the talent, orabove-the-line, personnel were direc-tors, actors, and writers. Examples ofcraft, r below-the-line, ersonnelweregrips (electricians),make-up artists, ndsetdesigners.Although the industry's work forceenjoyed stable employment,work hourscould be long and working conditionspoor.The studios were targetedfor uniondrives as early as 1920, with initial

organization occurring among the less-skilledworkers n the industry.Between1933 and 1940, the major motion picturecraftunions and talentguilds were estab-lished.These organizations ombined thecharacteristicsf craft unions and indus-trialunions. The talentguilds, such as theScreen Actors, Writers, and DirectorsGuild, were establishedby employees ofthe studios who saw their unionizationefforts s parallel to those of their craftworker colleagues (Fellner 1983). Craftworkerswere organized in a federation fseparate craft unions, the InternationalAlliance of Theatrical and Stage Employ-ees (IATSE), much like the AmericanFederation of Labor, but in this caserestricted o one industrial ector Staiger1985).Partly s a result of unionization,workin the motion picture industrywas wellpaid and reasonablystable by the 1930s.Admissionto motionpicture employmentwas restricted hrough pprenticeship ys-tems,including the starlet system, ndthrough an internal labor market thatallowedemployers omonopolize accesstoskilled abor and workers omaintainhighwages. Thus, contrary to its popularimage,workin the major motionpicturestudios exhibitedmany of the characteris-tics associated with the true mass-production ndustries uch as automobilesand steel.Withthe exceptionof the filmextras alwaysa casual labor force),thehighdegree of casualization of the indus-try's abor market is a relativelyrecentphenomenon,and a departurefromprac-tices under the studiosystem.Many view this period as the goldenage of the motionpictureindustry,notonly because of the high volume ofproduction,but also because the studiossustainedmanyelementsof a craft com-munity within this industrial system.Workersanticipatedstable,creativeworkover a fairly ong period of time. Craftswere handed down, father-to-son, ndapprenticeshipsrepresentedadmission toa social world as well as preparationfor alivelihood Staiger 1986).Because motion picture production in-volvesa complex and vaguelydefined set



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334 INDUSTRIAL AND LABOR RELATIONS REVIEWof tasks, jurisdictional disputes amongunions were a potent force in definingjobs and segregating differenttypes oftasks.Among talentworkers, ctorsweredistinguished ery arlyfrom extras thecasual, unskilled abor forceof the actingprofession) and organized in differentguilds. Craft obs were defined in inter-union negotiationswith respect to thehandling of particular equipment andmaterialsStaiger 1986:312). This methodof job definitionminimized the chancethat new technology would be intro-duced-an eventualitythat was resistedbecause new technology nevitably eacti-vated urisdictionaldisputes.Thus, the characteristics f the workprocess, includingboth task standardiza-tion and task differentiation,ave skilledworkers considerable bargaining power.They responded by definingthe bound-aries of theiroccupations fairlynarrowly,thushelping to shape the segregationofworkfunctions. killed workers lso main-tained the systemof credits wherebyanindividual'sname was attachedto a partic-ular film product. Screen credits en-hanced their bargaining power with theguildsand unions as well as withemploy-ers.The Decline of the Studio System ndRise of Flexible Specialization

In the late 1940s and early 1950s, theabsolute size of the market for motionpictures declined and the market thatremainedwas much less stable:box officeadmissionspeaked in 1946 and declinedthereafter,ox officereceiptsfell40% (in1967 constant dollars) between 1945 and1955, and annual fluctuations f both boxoffice admissions and receipts increased(Storper and Christopherson 1985:63).These changes resulted both from ananti-trust ecision by the U.S. SupremeCourt (U.S. vs. Paramount 34 U.S. 131,1948) that forced the studios to divestthemselves f theirtheaters, nd fromtherapid diffusion f television n the 1950s,whichgeneratedcompetition n a hithertoundifferentiatedmarketforfilmedenter-tainment.These eventstriggeredtwo decades of

verticaldisintegration n the motion pic-ture industry.Consequently,motion pic-turesare nowonly rarelymade by a singlemajor studio such as ParamountPictures,Twentieth-Century/Fox,r Universal Stu-dios). Instead, the major studio actsprimarily s a financial nvestor, nd anindependent production company orga-nizes the production. This company mayexistsolelyto produce one film.Produc-tion inputs-pre-production services, setdesign and construction, lectricalwork,sound mixing nd mastering, ilmprocess-ing, and so on-are provided by a largenumber of specialized firms, he servicesof which are contracted by the indepen-dent productioncompany.The production process can be de-scribed as vertically isintegrated ecauseit is carried out by many specializedestablishments,atherthanwithin singlelarge firm as in the case of a massproductionsystem.The small,specializedestablishments, n turn, minimize theirrisksby marketingtheir specialized ser-vices horizontally o other entertainmentindustries such as video, recording,andtelevision).They reduce theiroverhead bytailoringcosts directlyto the fluctuatingquantity nd nature ofoutput-for exam-ple, by hiring labor on short-term on-tracts. These contractual relationshipstransmitthe uncertainty mployers facedown the hierarchyof control to secon-dary subcontractorsand, ultimately,toindividualworkers.This transformation of productionmethods has had dramaticconsequencesfor labor. In the 1950s, as small firmsbegan to carry ut industry roductionona contractualbasis, hiring practices fortalentand craftwere differentiated. al-ent workers had alwaysused commercialintermediaries uch as agents to arrangeemployment,but formerly heir contactwithintermediarieshad been occasional,punctuated by the long periods duringwhich theywere under contract.Talentworkers have, since then, dramaticallyincreased their use of agentsas the labormarkethas become dominated by short-termemployment.Also in the 1950s, a specific type of



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THE FLEXIBLY SPECIALIZED MOTION PICTURE INDUSTRY 335labor institution, he roster system, re-placed employmentn the studios as a wayto gain access to craft obs. Under theroster system, tudios sign contractswiththe union federation,whose membersarethen placed on rosters according to theamountof seniority ccrued in the indus-try (rather than in a single firm). Theunion acts not onlyas a workerrepresen-tativebut also as a hiringhall.In many respects, the roster systemresemblesunion rules in the construction,trucking, nd longshoringindustries. Inall of those industries, mploymentcon-sists of short-termobs allocated by theunion. The roster systemfunctions s anintermediaryabor market nstitutionhat,under conditionsof short-term nd tem-porary employment, arriesout the func-tions of the internal abor market n theexternal labor market. What is unusualabout the motion picture ndustrysthat tunderwenta changeoverfromone to theother. Major studios encouraged the de-velopmentof the rostersystembecause itserved as a ready-made signaling andscreening device in a period of rapidtransition and uncertainty (Bernstein1957). It avoided the nevitable ransactioncostsand labor strife ssociatedwith spotmarketfor labor, yet allowed the studiosto pursue their strategy of sheddingoverhead (Spence 1981; Stigler 1961,1962).In the early yearsof the rostersystem,the craftunions were able to preventtheentryof large numbers of new workersinto the industry'swork force. Unionmembership provided almost exclusiveaccess to skills nd accreditation, s wellasjobs in themajor studios,whichremainedunion shops. With the dismantling ofinternal abor markets,however, the stu-dios no longer provided for sustainedcontact between skilled craftsmen andyounger workers,and there were fewerstable entry-levelobs overall.The studiosthus no longer functioned s an appren-ticeship r training ystem.Accordingto aunion-sponsoredstudyconducted in themid- 950s, there was virtuallyno laborforce ntry fter 1946. Withtherestrictionof the labor pool to the existingmember-

ship, theworkforce n the industry ged.In 1957, only 6.4% of the industry'sworkers were under 30 years old, andfully50% were over 50 (Bernstein 1957:37).Beginning in the 1970s, the majorstudios shifted even more dramaticallyfrom production to finance and distribu-tion. The negativepick-up or purchaseof a film lreadyproduced by an indepen-dent producer became a staple of studioreleases. In addition,more filmwork wasdone using television roductionmethods,such as location shooting,whichcost lessand did not use studio productionstaffs.Pre- and post-productiontasks were in-creasinglycontracted out to specializedfirms, nly some ofwhichwere unionized.In addition, the expansion of auxiliarymarkets n advertisingand television n-creased the demand for short-term on-tractworkers.As a resultofthese changes,studios began to pare down their produc-tion staffs,ncludingunionizedcraftwork-ers, and to increase their administrativestaffs (Equal Employment OpportunityCommission1976).Changes in labor supply accompaniedthese changes in demand. Training atuniversities n expanded communicationarts, film, and television programsbroughta new wave of skilled nonuniontechnicians, raftworkers, nd talent ntothe industry.Untilthe 1970s, thesework-ers, many of whom were not unionmembersor who worked on both unionand nonunion productions, had beenconsidered economically and politicallymarginal by the craft unions. By themid-1970s, however, there was a sizablelabor surplus throughout the industry,including the skilledcrafts, s a resultoftraining programs and union rostergrowth. ince then,thesupplyof workershas significantlyutstripped he supplyoffull-timeobs in all occupations.As evidence of the labor surplus,Table1 shows that output, measured by thenumber of filmsproduced, declined be-tween 1958 and 1982, while employmentincreased dramatically. n fact, the em-ployment figures understate the size ofthe labor pool, since theydo not include



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336 INDUSTRIAL AND LABOR RELATIONS REVIEWTable 1. Output and Employmentn MotionPictures,1958-1982: SIC 7813, 7814, and 7819.a

Output Employment DifferenceBetweenNo. of Relative No. of Relative Rel. Emp.Motion Output: Workers Employment: andYear Pictures 1958 = 100 Employed 1958=100 Rel. Output1958 327 100 53,569 100 01963 203 62 49,219 91.9 29.91967 229 70 64,600 120.0 501972 279 85.32 64,700 120.7 35.381982 209 63.9 127,209 237.5 173.6

a SIC 7813 Motion Pictures; IC 7814 Motion Pictures nd Tape Production or television; IC7819 Services Allied o Motion icture roduction.Sources:Output: torper nd Christopherson1985). Employment:ureauof LaborStatistics,mploymentandEarnings.unemployed workers. The declines invalue-added per employeeand payrollperemployee reported in Table 2 confirmthat he rise nemploymentwas notdue toincreasesin labor inputs per film.Thesefigures, nstead, ndirectlyndicatea trendtoward increased part-time employmentforgreaternumbers of workers.

The Changing Distribution f WorkHours and SkillsThe riseofpart-timend casual labor inthe motionpicture industryhas affectedthe work force unevenly, creating intra-occupational divisionswithin t.Moreover,skillrequirementshave changed forbothtalent and craft workers. These trendshave transformedwhatwas once a hierar-chically organized work force with alimited number of career paths into amore heterogeneous work force with

increasing disparities n expectationsandcareerpossibilitiesmong workers.

The Distribution fWorkHoursAs noted above, the data in Tables 1and 2 show thatemploymenthas grownconsiderablyfasterthan output since the1950s, and suggest thatover thisperiodmuch of theemployment rowthhas beenin less than full-timework. Long timeseries ofdetailedemployment ata are notavailable,butwe can provide a snapshotofthe resultsof the transformationo flexi-ble specialization,particularly heredistri-

butionof work hours. To do so, we use adata base providedbythe Motion PictureHealth and Welfare Fund (MPHWF), ahealth insurance and pension fund formore than 40 Hollywood guilds andunions as well as for some nonunionworkers.The MPHWF is theonly organi-zation in the industry hatkeeps recordson hourlyworkers withmultipleemploy-ers. It should be noted,however, hatthisinformationon individuals' work hoursfor six-monthperiods accounts only forhours worked with firmsthat abide by

Table 2. Payroll nd Value Added Per Employeein theMotionPicture ndustry,1954-1982.Payroll er ValueAdded ValueAdded: Receipts erEmployee PerEmployee Payroll EmployeeYear (1967 $) (1967 $) PerEmployee (1967 $)1954 9,196 24,266 2.63 NA1958 9,554 19,040 1.99 NA1963 10,678 25,559 2.39 33,7451967 10,820 21,284 1.96 33,5921972 10,016 17,248 1.72 35,2601977 NA NA NA 33,1331982 6,654 12,263 1.84 27,509

Source:U.S. Statisticalbstract.963-1967: llestablishments.972-1982: stablishmentsith ayroll.NA: not vailable.



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THE FLEXIBLY SPECIALIZED MOTION PICTURE INDUSTRY 337contracts mandating contributions toMPHWF for each hour worked.The Fund has kept data in machine-readable form ince 1977. We analyzedallcontributions yoccupation as designatedby union affiliation) for the five-yearperiod from1977 to 1983.Table 3 shows that about two-thirdsfthe work force covered by MPHWFcontracts work enough hours to becounted as full-timeworkers, althougheven in this group there is periodicunemployment etweenob contracts. In-terviewswith MPHWF officials ndicatethatthere s about a 5-10% change in theconstitutionof the group counted asfull-timeworkerseverymonth.) Anothergroup of workers the peripheral workforce)accountfor a thirdof thetotalworkhours. Since theyshare fewerworkhoursamong them than do the full-timeworkers, t is probable that theyexperi-

ence longer spells of unemploymentbe-tween obs. Workersare included in theMPHWF rolls only when they work aminimum of 300 hours in a given six-monthperiod,and there s no doubtthatgreat many peripheral workers fail tomeet thatqualification.Thus, the data inTable 3 should be taken as an extremelyconservativeestimate of the size of theperipheralwork force.Figure 1 showsthe distribution f workby groups of workersaccording to hoursworked per capita per six-monthperiod.Changes in the amount of work done bythose who periodicallywork significantovertimehours (the Overtime group)account forvirtually ll of the fluctuationin total hours. Only in the firsthalf of1981 and the first half of 1982, whentherewere recessions n the industry, idthe numberof hours workedbyfull-timeor overtimeworkersdecline.During these

* LowHourso MediumHours25 U > FullTime

O FullTimeEquivalentA0| TotalHours /


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338 INDUSTRIAL AND LABOR RELATIONS REVIEWcf xo C 10 to . xn in - 0~~~~~~~~c- r- 4 c6 o6 0 t6 6 cn0 -~~~~~~~~~~~ 0000~~~ - fCo cr 00 0oo - - - -e 0 co oc -r

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THE FLEXIBLY SPECIALIZED MOTION PICTURE INDUSTRY 339periods of downturn, there was an in-crease in work done by those workingalow or moderate evel of hours.Figure 2, which plots the number ofworkers in each of four categories ofhours worked from spring 1971 to fall1982, indicates that the core work forceconsistently enefited from increases inavailable work. The number of workerswith overtime n mostyears is negativelycorrelated with the number of workerswith mediumlevel of hoursworked,butpositively orrelated with the number ofworkerswith full-timehours. In periodsof expansion, then, some full-timework-ers moved up to overtime, and someworkerswithmedium hours moved up tofull-time ork.When the ndustrywas inarecession, however,the number of thosewhoworkedmedium hours rose whilethenumber workingovertimeand full-timedeclined. Thus, as thosewho had workedfull-time and overtime in periods ofexpansion worked fewerhours, they ap-pear to have displaced workerswho hadworked a relatively small number ofhours.

In any ndustry,ncludingmassproduc-tion industries, where employment isallocated on the basis of seniority andwhere there are problems in stabilizingoutput, this pattern of bumping can beexpected. Bumpingwill occurwithpartic-ular frequency n flexibly pecialized in-dustries,however,because production inthose ndustries s organizedbya networkofsmall firms roducing a mix ofoutputs.As theproductdemand changes,differentskills and, thus, differentworkers arerequired. This production organizationfavorsthose workerswithextensive workexperience and a network of personalconnections. t is reasonable to speculatethat fmass production ndustriesbecomemore flexiblyspecialized, bumping willoccur more frequentlyn those industriesas well.Changing Skill RequirementsAmongCraftWorkers nd Talent

To analyzethechangingorganization fproduction nd the laborprocess,we usedindustrydata sources as well as publiclyavailable data. In addition,we conducted* LowHours0-699)o Medium ours700-899)10000 O FullTime(900-1199)

9000 * Overtime(1200+)80007000600050004000300020001000

0 S* S F S F S* S F S F S F S F S F S F S F S F71 72 72 73 73 74 75 75 76 76 77 77 78 78 79 79 80 80 81 81 82 82YearS: January-June;: July-December.* Dataavailable nly or pring.Source:Motion icture ealth ndWelfare undauthors'alculations).Figure2. Number ofWorkers,ClassifiedbyNumber of Hours Worked: The MotionPicture ndustry,1971-1982.



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340 INDUSTRIAL AND LABOR RELATIONS REVIEWsome 50 interviewswith motion picturedirectors, roducers,writers, nion lead-ers,and craftworkersbetweenNovember1984 and April 1985.We also analyzedthehistoryof production organization andlabor organization s reported n the tradepress and in the LosAngeles imes etween1960 and 1987, developing a chronologythatrelatedchanges in productionorgani-zationto the labor process.Among both craftworkers and talent,the typesand range of skills required inthe production process have altered asvertical isintegration as progressed.Un-der the studio system, a few peoplecontrolled the pacing of production andthe final form of the product. In thatlabor process, however,the gap betweentalent and craftworkerswas bridged in avariety of ways-for example, by theinterdependenceof the cameraman anddirector,who worked collaboratively. naddition, most talentworkers were sala-ried and acquired skillsthrough nformalapprenticeship, not unlike their craftworkercolleagues. All were employeesofthe studio.In the contemporary motion pictureindustry, he skillsof actors,writers, nddirectorshave expanded to includecollab-orative nd transactionkills, uch as thoseneeded to acquire a suitable filmproperty r solicit nvestors.A small butimportantsegment of directors,screenactors, nd screenwritershave developedindustry-specificather than occupation-specific skills in conceiving, packaging,and financing productions. Thus, theroles they play have multiplied. Theyoftenwork in returnfor a share in theprofits rather than solely for a wage(Staiger 1986). A major distinctionhasemerged between workers nvolved in aproduction as a speculative venture andother workers,particularly n the skilledcrafts,who continue to be paid primarilyon an hourlybasisand tocarry ut specifictasks.In contrast to talent workers, craftworkershave developed more specializedtechnical skills. As workersbroughtin toperformspecifictasks after the producthas been defined,theyhave less influence

on the content and pacing of the workprocess or on the final product. Inaddition, theyhave responded to increas-ing employment nstability y developingspecialized skills used in a variety ofproducts, including commercials, televi-sion,and motionpictures.Under the studio system,for example,make-up artistshad a standard tool kitoftechniques that they applied repeatedly.Now, the make-up artist may becomeskilled n, and well knownfor,creatingaparticularkind of effect for example, bybecoming proficientat latex sculpting),and yet must be prepared to apply thisspecialtyto a wider range of situationsthan previously. Technological changesand expansion in therange and variety fequipment,as well as the introduction fnew materials and special effects,havecontributed to this skill flexibility ndspecialization.A cinematographermaybeexpert in shootinga certaintypeof film(indoor/outdoor, r a certain genre) butversatile n adapting thisspecializationtodifferent emands.One mayconclude that flexible pecial-ization is associated with a qualitativeredefinitionof skills, rather than de-skillingor up-skilling.As we shall seeshortly, he commonalitiesof experiencethat existed under the studio system rebeing eroded by increasinglyheteroge-neous skill demands and work histories,and this trend has contributed to thebreakdown of the old politicsof produc-tion.

Wages and Income in a FlexiblySpecialized IndustryWe have describedsome reasonsforthenew fragmentation f the labor force inmotion pictures and for the increasedfunctional eparation of talent and craftworkers.This functional separation hasimplications for the way each groupgenerates ncome and (as we willdescribein the next section) creates conflicting

interests etween them.Hourly earnings n below-the-lineworkinthemotionpicture ndustry ave alwaysbeen high relativeto hourly earnings in



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342 INDUSTRIAL AND LABOR RELATIONS REVIEWAs indicated earlier, the real level ofvalue-added per real payroll dollar actu-ally has tendedto decline duringthe pastthreedecades (see Table 2).

Thus, we conclude that an importantresidual increase in wages exists thatcannot be accounted for by any of thestandard trictlyconomicexplanations.Acloser look at the labor process suggestssome alternativeexplanations related tothepoliticsof production.In most unionized industries, unionwage floors are extended to workerswithlittle seniority. n many of these indus-tries, nion contracts re theonlydefensesenior workers have against being re-placed by less experienced and cheaperworkers. n themotionpicture ndustrynthe 1950s, even though the scarcityofskilledworkers t that timeminimized hethreat that experienced motion picturecraftworkers would be replaced by new-comers, senior workers exercised theirmarket power to create a system ofoccupationalwage floors.One explanationfor the creationof thissystem ies in the nature of occupationalskills in the motion picture industry,particularly hose of craft workers.Thework process originallydesigned in thestudiosystemwas one inwhicha supervis-ing cinematographer or gaffer (electri-cian) worked closely with a cadre ofapprentices. This work process is stillprevalent, even though under flexiblespecializationboth supervisor and assis-tants are hired by the job rather thanworking on permanent contracts for asingle firm. The production process re-quires constantdecision-making nd ne-gotiation, nd high levels of cooperation.To work effectively,ll members of thecrewmustunderstandwhen and wheretobend work rules, and when to defendhard-wonworkerprerogatives.Under the studio systemof the 1950s,intra-occupational earnings differentialswere related to ob tenure rather than tohours worked. In the studios' internallabor markets, hat s, seniorworkerswererewarded for their firm-specific umancapital and lengthof service with higherhourly wages. Junior and senior workers

functioned s teams,and the prospectofadvancement and higher hourly wagesencouraged cooperation and disciplineonthe part of unior workers.Total annualincome was thereforedirectly orrelatedwith eniorityn the firm.In thecontemporary lexibly pecializedmotion picture industry,however, totalincome is more a functionof total hoursworkedthan of seniority. n addition, thereasons for supportinguniform occupa-tionalwages have changed. Crew supervi-sors, not employers,are responsible forassembling good, trustworthyrews on aproject-by-project asis. They must alsocreate a rapportthatextendsbeyondeachparticularob iftheywant tobe able tousecompetentworkers again. Yet, no crewsupervisor can promise steady work oradvancement. The incentivefor the ex-tremelyhigh levels of cooperation-evensacrifice-frequentlydemanded of crewmembers s severely educedwithunstableemployment elations, nd themotivationfor hirking nd opportunism sincreased.One way in which senior workers-whoare the supervisors s well-cope withthisproblem is by supporting high hourlywages regardless of experience in thework force. Peripheral workers, n turn,acquiesce to a system that preserves theprivileged tatusof core workers.The resulting ystemscharacterizedbya much more uneven distribution f totalannual earned incomes than eitheraver-age hourly wages or average annualincomewould suggest.That featureof themotion picture industry sharply distin-guishes it from mass production indus-tries. Variations in earnings within theproductionworkforceofmassproductionindustries are largely accountable tohourlywage rate differences mong obs,which are allocated to workers largelyaccording to senioritywithin the firm.Differences in total weekly or annualearningsdo not,forthe mostpart,reflectdifferencesn hours worked.Also, work-ers at the bottom of the occupationaltotempole have a reasonable expectationof increasing arningswith eniority.In flexibly pecialized industries, n theother hand, the principal mechanism



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THE FLEXIBLY SPECIALIZED MOTION PICTURE INDUSTRY 343producing income variations s work timerather than hourly wage rates. Moreimportant, he mechanism appears to becapable of producing dramatic incomedifferences:withinthis industry'sgener-ally skilled work force, a core workerfrequently earns 45% greater annualincome than a peripheral workerin thesame occupation. To the extent that theavenues of advancement for peripheralworkers are no longer guaranteed (orclearlydefined, for that matter),we cansay that a new form of intra-occupationallabor market egmentationhas appeared.

The New Politicsof ProductionAs flexible pecializationhas proceeded,the emergence of differingnterests othwithin and between talent and craftworkershas created tensions that affectthe work force's abilityto bargain withmanagement.These tensionshave crystal-lizedinthreecrisesforthe nstitutionshatemerged during the studio system andadapted to the early phase of verticaldisintegration. hese crises accentuate thedivergent interests of fractions of thelabor force and theirdifferent rganiza-tional strategies for responding to aflexibly specialized industry. The firstcrisis stems from the increasing laborsupply; the second, fromthe role of newtechnology in the entertainment ndus-tries; and the third,from the ambiguousrole of talent workers as both labor andmanagement.

The Consequences of SkilledLabor SurplusDespite itscontinuingrole in allocatingwork n the mostpredictable nd lucrativesegments of the industry, the rostersystemhas not been able to prevententryinto the industry'sworkforce. The workforce gains new members with eachproductionboom, and although manyof

these new entrantsoin unions,a growingportion work outside union contracts.According to a recent estimate by anIATSE official, 0% of moviesare made

with some nonunion craft employees(Weinstein1986).Consequently, he industry raftunionsare caught in a very serious dilemma. Ifunions restrictmembership, new workforce entrantstrained outside the unionapprenticeship system will demand theopportunity o work outside union juris-dictions. f,on theother hand, theunionsare inclusive, heperipheralworkers ouldbecome the voting majority in someunions and undermine the seniority ys-tems and membership barriers thathavefavored the core labor force. Our inter-views suggestedthatthesecontract gree-ments are, in fact, resented by a highproportion of workers who have enteredthe work force during the past 10-15years.Employers now openly criticize theroster system, nd many-especially thesmaller firms-increasingly attempt tohire off-roster r nonunion workers en-tirely.From 1986 to 1988, one of Holly-wood's largest ndependent studios,Can-non Films, resisted signing collectivebargaining agreements with IATSE, thecraftworkers'bargaining agent, althoughtheyhad bargaining agreementswiththethreemajor talentguilds.Cannon eventu-ally agreed to recognize IATSE only oncondition that IATSE agree to negotiateseparate contracts for high-budget andlow-budget films. In low-budget films,wages and benefits are not altered, butovertimepay for Saturday and Sundaywork and nightpremium pay are elimi-nated. In addition, producers have morediscretion regarding crew size and jobcontent and boundaries (Bernstein1987).The union subsequently made similaragreementswith other independent pro-ducers.The employers' abilityto enforce thistype of agreement demonstrates theirincreasingbargaining power via-A-vis hecraftunions,whose ownbargainingpowerhas been weakened not only by a laborsurplus but also by well-establishednon-union recruitment etworks nd the ero-sion ofsupportamongtheir wn membersdue to the increasingdefacto nequalities



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344 INDUSTRIAL AND LABOR RELATIONS REVIEWcreated by flexible specialization (Wein-stein 1986).We have already noted thatemployeesin the motion picture ndustry re accus-tomed to high hourly wages. Behindactual wage levels, however, lie prospec-tive wage levels. Under conditions ofrelative labor scarcity, he roster systemand craft unionization connect today'swages with tomorrow's (presumablyhigher and more stable) wages. In anonunion labor market employers cannegotiate with peripheralworkers to paylower hourlywages. Potentially,hiscouldreduce wage rates in the industry as awhole and break down the intra-industry(both intra- and inter-craft) atternbar-gainingthat now exists.Moreover, producershave begun to uselocation shooting to avoid work rules,particularly imitson workhours, in LosAngeles and New York (Storper andChristopherson 1987). West Coast craftunion work rulesprevailwithin radius of300 miles from the corner ofBeverly ndLa Cienega Boulevards in Hollywood.Since these rules limit the length of theworkingday, theycan result n additionalshootingdays,with ll the associatedfixedcosts. Even though the skilled personnelwho work on location outsideLos Angelesrarely ccept owerhourlywage rates, heysometimes informally agree to worklonger dayswithout vertime.Work ruleswere arguablymore important hanwagerates in the unionizationstrugglesof the1930s, and the employers' attempt toweaken themrepresents n attack on oneof the major sources of union legitimacyand inter-craftolidarity MacLean 1983).The guilds are even less able than thecraft nions to function s gatekeepers ndeconomic gentsfor heabove-the-line orkforce. These inclusiveorganizationsgrewdramatically etween the early 1970s andthe mid- 980s,the WritersGuild from 00to 8,000 members and the Screen ActorsGuild from13,000 to 54,000 (Michaelson1984). As a member of theWritersGuildboard of directorsput it to us, the Guildnow faces the discontentof workers whodo not wish to abide by the contractualagreementsestablishedby the guilds be-

cause they feel thatthe agreements imittheir ccessto work.Forexample,conflictswithin heWritersGuild led, in their1985strike, o an early ettlementnfavor fthestudios. In this dispute, the more well-established writerswere unable to obtaintheallegiance of thearrivistes,ho are ea-ger to work mmediately.The Implications ofTechnological ChangeTechnological change has interactedwithorganizationalchanges in the indus-tryto redefine production activities ndalterthedivisionof labor. Craftunions inthis industry face the dilemma of craftunions in manyother ndustries.They areunable to solve jurisdictional disputesarising from the introduction of newtechnology, particularly the transitionfrom 35 millimeter ilmto video produc-tion methods Bradsher 1987). One prob-lem is that unions oppose retrainingworkers n new technologybecause it isnotclear under whichunions' urisdictionthe workerswould come once retrained.Thus, there is growing tension betweenworkerswithseniority nd those who seetheirfuturetied to the acquisitionof newskills.This tensionhas made itdifficult orthe unions to continue to mediate effec-tivelybetween the interests f employersand workers n the industry.The older and more established craftunion federation, ATSE, has foughttopreserve establishedoccupational catego-ries and work rules, earning itself areputationfor blockingprogress.Ratherthanfunctionings a community fskilledinnovators, IATSE's members have be-come defenders of a labor aristocracy,and are portrayed as such by manage-ment, both to the newer entrants to theindustry nd to the public.The Redefinition fManagement andLabor Roles

Talent workers are now divided be-tween a privileged group who work intelevision (in which employmentis notonlyhighlypaid but also continuous) andothers who work much more intermit-tentlyn motionpicturesor commercials.



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THE FLEXIBLY SPECIALIZED MOTION PICTURE INDUSTRY 345In addition, as remarked above, sometalent workers have taken on multipleroles in the productionprocess, ncludingroles formerlyassumed by managers.These differences n workingconditionsand in the labor process have led toconflicts between stronger and weakersegments f the talent abor force.The depth of these conflictswas re-centlydemonstratedbythe Screen ActorsGuild's rejection of a proposed mergerwith the Screen Extras Guild in thesummer of 1986. Later in the same year,theconflict etween these twosegments fthe work force deepened when the SAGwould not support the Screen ExtrasGuild in its contract dispute with theAssociationof Motion Pictureand Televi-sion Producers. The contractprovisions,which SEG was compelled to acceptbecause of its poor bargaining position,exact major concessionsfrom the extras,including a 25% cut in daily wages, theliberty of management to hire morenonunion extras (who earn one-third hedaily wages of union extras),and changesin overtimepay schedules. In the courseof this dispute, the Screen Extras Guildpicketed the Screen Actors Guild office oprotest he actors' ackofsupport.The riftthatwas thusvividly emonstrated eflectsthe desire of the establishedmembersofthe labor force to protecttheirpreroga-tives,but also the expansion of the rolesplayed by talent. Prominentmembers ofthe Screen Actors Guild are not onlyactors but also producers and directors.They have management as well as laborinterests.The blurring of interestshas not onlytaken place among the work force. Themanagement of the major studios hasallied itselfwiththe craft unions to findwaysto limitnonunion production n LosAngeles.The major studiosremain union-ized, and they must compete with nowsizable production companies, such asCannon films,that take a much moreadversarialstance towardunions. Becausethe major studios do not foresee beingable to hire nonunion workers hemselves,their approach to the competitionpre-sented by large nonunion production

companies is to encourage IATSE toconduct organizing drives in the mini-major firms uch as Cannon (Bernstein1987).1 Ultimately, s noted above, Can-non establishedan unusual, two-tierwagesystem tied to the product, not theworkers' eniority.All of these complex variations onindustrialpolitics an be traced to changesin production organization, which havecreated labor force fractionswith signifi-cantlydifferent nterests.

ConclusionsThe purpose of flexible productionorganization s to make labor and capitalinputs more variable, relative to eachother and tooutput.This form fproduc-tion organization makes it possible forfirms o avoid hoarding labor and capitalin response to market fluctuations ndensures continuous product innovation.Flexibilityfor producers, however, pro-duces instabilityorat least some part ofthe work force. One of the ironies we

observed in this study of the motionpicture industry s that the institutions,such as the roster systemand unions,establishedto regulate employmentrela-tions not only are incapable of resolvingthe problems workers face as a conse-quence of unstable demand, but actuallyencourage the division of the workforceinto core and peripheral segments(Rubery 1984). Workers create divisionsamong themselves in response to theuncertainty assed to themby firms hatthemselves ace considerableuncertainty.Even withinproductionoccupations,weobservedsignificant ivisions etweencoreand peripheralwork forces.A peripheralworker arnsa high hourlywagebut has ablue-collar standard of living. A coreworkerearns a high annual income andhas a dense network fsocialrelationships

I Yoram Golan, owner of Cannon, responded tothisorganizingdrive by suggesting hat unionizationof Cannon bythe craftworkerswould drive Cannonto shoot more filmsoutside the United States andwould reduce employment possibilitiesfor talentworkers Weinstein1986).



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346 INDUSTRIAL AND LABOR RELATIONS REVIEWat work, s well as securitynd status So-linas 1982; Rubery nd Wilkinson1981).Some recentstudies have indicatedthatwith a higher proportionof employmentin services nd high technologymanufac-turing, there is a concomitant trendtoward ncreasingdisparities n the distri-bution of earned income (Harrison andBluestone 1988). Two sources of incomeinequality have been at issue in mostdiscussions hus far. One is the differencein wage structure between low-wage in-dustries,such as apparel, and high-wageindustries, uch as the auto industry. heothersuspectedsourceof incomeinequal-ity is deep occupational wage disparitieswithin some new industries, such aselectronics.Our research on changes in theproduc-tionprocessand labor marketdynamics nthe motion picture industry, however,suggestsa new formof segmentationoflabor and labor markets.This segmenta-tion affectsboth the workers inside theroster-based senioritysystem and manynonunion workers. Hourly wage ratedifferencesno longer figure prominentlyin dividingthework force. nstead,signif-icant status nd income divisions re basedon dramatically ncreasing disparities inaccess to work hours.Although thisformof inequality s nostranger to industries that have alwaysfaced a chronically luctuating roductionschedule,such as construction,tsappear-ance in an industry hat had once stabi-lized employmentrelations by adopting

mass production methods is significant.Flexible specialization could create morevirulent forms of social inequality withinoccupations than did mass production.Ifthe distribution f workbecomes critical oearned income,then thewayswe concep-tualize the relationship etween work andstandardof living-primarily s a connec-tion betweenhourly wages and income-may no longer be adequate for under-standing work and income (Christoph-erson 1986; Ebel 1985).The notion of a new era in laborrelations, ne based on the mutualrespectof employersand workers, s implicit nmuch of the literature n flexible pecial-ization. Our study does not bear out thisprospect. nstead, we find that workers none flexibly specialized industry n theUnited States face problems that do notarise in political economies of the kindthat re most frequently sed to exemplifytrends owardflexible pecialization, con-omies characterizedby historically table,artisanalcommunities. uch problems willbecome increasingly mportant f, as webelieve, the examples of the motionpicture ndustrynd otherflexibly pecial-ized industries, such as textiles in theThird Italy nd the just-in-time ystemin the automobile and tool industries,foreshadowa growingrole for thisformof production organization.New institu-tions will be needed to ensure thatflexibility oes not mean insecurity ndexploitation.

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THE FLEXIBLY SPECIALIZED MOTION PICTURE INDUSTRY 347Segmentation.London: Academic Press, pp.99-113.Burawoy, Michael. 1985. The Politicsof Production.London: Verso.Christopherson, Susan. 1986. Peak Time, SlackTime: The OriginsofContingentLabor Demand.Working paper no. 117, University f California,Los Angeles, Institute orIndustrial Relations.Doeringer, Peter, and Michael Piore. 1972. InternalLabor Markets nd ManpowerAnalysis. exington,Mass.: Lexington Books.Ebel, Kenneth H. 1985. Social and Labor Implica-tionsof FlexibleManufacturing ystems. nterna-tional aborReview,Vol. 124, No. 2, pp. 133-45.Edwards, Richard, Michael Reich, and David Gor-don, eds. 1975. Labor Market egmentation.exing-ton, Mass.: D.C. Heath.Equal EmploymentOpportunityCommission. 1976.Behind the Scenes. Washington,D.C.: GPO.Fellner,Kim. 1984. The Early Years. ScreenActor,FiftiethAnniversary ssue (August), pp. 30-35.Harrison, Bennett,and Barry Bluestone. 1988. TheGreatU-Turn: Corporate estructuring,aissez-Faire,and theChallenge oAmerica's igh-Wage ociety. ewYork: Basic Books.Maclean, Barbara. 1984. The Hollywood GoldRush: Pioneers in the Promised Land. ScreenActor, FiftiethAnniversary Issue (August), pp.56-59.Michaelson, Judith. 1984. Actors Guild RecallsStruggles, Triumphs. Los AngelesTimes,Mar. 5,1984, part IV, p. 1.Murray, Frank. 1983. The Decentralization ofProduction: The Decline of the Mass CollectiveWorker. Capital nd Class,Vol. 19, pp. 74-99.Osterman, Paul, ed. 1986. InternalLabor Markets.Cambridge,Mass.: MIT Press.Piore, Michael, and Charles Sabel. 1984. The SecondIndustrial ivide. New York: Basic Books.Rubery,Jill. 1984. The Origins of Labor MarketSegmentation. Cambridgeournal fEconomics,ol.8, pp. 17-36.Rubery,Jill, nd Frank Wilkinson. 1981. Outwork

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Christopherson and Storple - The Effect of Flexible Specialization