Refugio is a scenic painter at the shop I own in Sun Valley, California. He paints the backdrops. The painted sky behind the lead in the pilot of the show you’re watching tonight — that’s his. The painted room behind the camera in the scene you rewound last night to read the title on the spine of the book — also his. He paints them on 4-by-8 sheets of MDF with a nitrocellulose lacquer that flashes off in 9 seconds and leaves the shop unbreathable for the next 6 hours. He has painted 4,610 backdrops for me. He earns $23.40 an hour. He has worked at my shop for 4 years and 2 months. The paint is on your show. The fumes are in his lungs. The fumes are on my books.
His respirator is a 3M paper mask he bought at the Home Depot in Burbank, because the spray-booth exhaust hood I refuse to install would cost $11,400. The lacquer eats the mask by day 9. He replaces it from the same Home Depot. The cartridge rotation, if I were issuing cartridges, would cost $1.85 a shift per painter. I am not issuing cartridges. The cartridges are his. The box fan in the window moves enough air for me when I tour the floor twice a year.
Several of you sent me the Editors’ column at the National Review last week. They wrote that the Motion Picture, Television, and Entertainment Revitalization Act — Senator Tim Scott’s bill, dropped September 22 — would create an uncapped federal tax credit covering 20% of nearly all labor costs on films and television shows produced predominantly in the United States. The Editors’ objection is that the credit has no cap on eligible compensation, so taxpayers would subsidize A-list salaries. They call it a gilded name for an open-ended subsidy. I object to their framing.
The subsidy does not go to the writer. The subsidy goes to me.
Here is the arithmetic the case was an example of.
The federal credit, at 20% of labor cost, returns 20% of Refugio’s wage to the production that employs him. The production is mine. The 20% is mine. Across 9 painters, across a 47-week season, across a 9-hour day, the credit is $89,083.80 of taxpayer money a year, landing, by statute, on my P&L.
Read the next sentence twice.
The exhaust hood I refuse to install costs $11,400. The cartridge rotation I refuse to issue costs $1.85 a shift — roughly $3,973 for the whole crew for the whole season. The credit is $89,083.80. The credit is 7.81 times the booth. The credit has been mine since the bill was introduced. The booth has been a line item I have never opened. The cartridges have been Refugio’s since the day I hired him. The booth costs less than the wrap-party catering.
The wrap party is mine. Refugio was not invited.
Refugio paints the sky. Estela built the wall it’s nailed to.
Estela is a scenic carpenter at the same shop. She has worked for me for 7 years and 4 months. She cuts the 2-by-4s that frame the walls that hold the sky Refugio paints. Her circular saw has no guard because the guard slows the cut by 7%, and 7% of her $24.10 an hour across 11 carpenters across 47 weeks is a number I have penciled out, and the guard is hers. Last March the blade took the index finger of her left hand at the second knuckle. The saw is uninsured. The finger is in a biohazard bag at the shop she carried it to. I replaced her on light duty at $14 an hour. She has not asked me for the guard.
The subsidy does not buy the guard. The wall is hers. The finger is hers. The $14 an hour is what the production charges as her labor cost and the credit returns 20% of. The wrap party she will not attend is mine.
Now widen the frame. This is not one shop. This is the system.
I have 30 graduates from the program I run at Warden University running scenic operations in Atlanta and Albuquerque and Vancouver. Their respirator lines are zero. Their graduates are running shops in Pittsburgh and Budapest. The graduates of those graduates are running shops in Savannah and Hyderabad. They are running the subtraction faster than I do. They are running it cleaner. I taught them the subtraction. I am proud of them. The third edition is in its first printing. The cover is clean. The margins are theirs.
The subtraction is identical every time. Different bodies. Different machines. Different costs I refuse to pay. Same math. The credit subsidizes the math.
You would like to file me as one bad man and be done with me.
I will not be filed.
The Editors at the National Review think they are opposing the bailout. They are opposing the credit. The credit is mine. The bailout is a gift to the production company that pays Refugio’s wage, and the production company is mine, and the gift is mine, and the lungs the gift is laid on top of are Refugio’s, and the lungs were on my books before the gift and are on my books after the gift. The gift does not change the lungs. The gift changes my quarter.
“The labourer is worthy of his hire.”
The Lord said that 2,000 years ago. He said the labourer deserves. He did not say the labourer deserves enough to eat. He did not say the labourer deserves enough to breathe. He did not say the labourer deserves a body left intact. He did not say the labourer deserves a wage the labourer can recognize. He said the labourer deserves, and the verb is permissive, and the production company has the permission, and I have the production company’s permission, and the taxpayer is paying for the permission. The Lord gave the verb. The production company is keeping the noun. The subsidy is the production company and the Lord in agreement.
Here is the same arithmetic in another body, because one is an anecdote and two is a model.
Calloway is a stand-in on a second-unit I roster out of College Park, Georgia. Her day is 14 hours and 6 minutes of standing where the lead actress will stand, walking where the lead actress will walk, and holding the light meter while the lead actress eats. She was paid $7.50 for yesterday. The studio billed me $165 for her day. I kept $157.50 and put it in the same column I keep everything in. The series you streamed on the couch on Sunday was lit by her wrist.
The credit, when the production files, returns 20% of the studio’s qualified labor cost. The $7.50 is on the qualified labor cost. The studio gets back $33 of the $165 it paid me on Calloway’s day alone. Three of the four phone calls I have taken since the bill was released have come from Atlanta. The credit is why. The credit is the studio’s permission to keep hiring me. The credit is the undoing of the organizing that was supposed to prevent exactly this.
The box lunch is the part I want you to sit with. A box lunch on a 14-hour day in Georgia in September costs me $11.40 a head. I had 38 stand-ins on yesterday’s call. That is $433.20 in lunches I did not issue. Calloway ate a granola bar from her purse. The granola bar cost her $1.85. I did not reimburse the granola bar. The 20% will rebate a portion of the absence.
The credit has priced itself. The lungs have not been priced. The respiratory clinic in Burbank is on Refugio’s dime. The finger is on Estela’s. I have not priced those either. The show shoots on Tuesday. The credit lands on Friday. The sky is on it. The granola bar is in Calloway’s purse. The purse is on her shoulder. The shoulder is not on my ledger.
Sterling A. Varice holds the Hayek-Friedman Chair and serves as Dean of Instruction at Warden University’s College of Business and Economics in Richmond, Virginia. He is the author of three textbooks: Divine Mandates for Labor Utilization, Social Obligations for Profit Maximization, and Calibrated Deprivation: A Manager’s Guide to Employee Motivation.