Chapter 22 Artistic Labor Markets: Contingent Work, Excess Supply and Occupational Risk Management

This chapter studies how and why artistic labor markets have expanded along a path of unbalanced growth. Long-term employment which nurtures the Baumolian cost disease persists only in large, heavily subsidized and sponsored organizations. The now dominant project-based system of production, with its functional needs for flexibility, relies on short-term assignments. Large parts of the business risk are transferred down onto the workforce in vertically disintegrated organizational settings. Artists and technical workers act mainly as contingent workers, freelancers and independent contractors; labor supply is patterned by repeated and discontinuous alternations between work and unemployment, and workers cycle between multiple jobs inside and outside the arts. Thus artistic labor markets display the main characteristics of a textbook model of imperfect monopolistic competition: excess supply of labor, unbounded differentiation of production, reputational rents, a population of small firms that has been growing as fast as the number of artists. On the supply side, the attractiveness of artistic occupations has to be balanced against the risk of failure that turns ideally non-routine jobs into ordinary or ephemeral undertakings. Learning by doing plays such a decisive role that in many artforms initial training is an imperfect filtering device. Individuals learn to manage the risks of their trade through multiple jobholding, occupational role versatility, portfolio diversification of employment ties, and income transfers from public support, social insurance and social security programs. Ironically, the study of the artists' risk management shows how rationally they behave, although artistic work may be highly idiosyncratic. Thus artists may be seen less like rational fools than like Bayesian actors. How do vertically disintegrated systems of production shape individual careers and organizational behavior? Loose employment relationships do not preclude contractual stability. Employers use reputations as screening devices and signals of employability. Artists learn how to compose balanced sets of recurrent and non-recurrent hiring ties in order to secure a living as well as to increase their human capital. Considerable inequalities in amounts of work and earnings are observed, caused by the skewed distribution of talent and by joint consumption technologies that turn small differences in talent into huge earnings differentials. Inequalities may also trace back to the way a disintegrated labor market operates, since both the allocation of piecemeal work based on reputational rankings and team formation based on selective matchings magnify the power of differences in talent and work opportunity to increase inequality. These factors should not cause the kind of permanent excess supply of labor in the arts that has been noted for decades if the occupational commitment of artists were not combined with the management of business uncertainty through overproduction of infinitely differentiated goods and services.