Dollars and Sense

Why California Senate Bill 805 Needs to Become Law

By Steven Leigh Morris

________________________________________________

Welcome to California, in the wake of the worst pandemic in over a century. These are times and situations that call for a new approach to the way we’ve been living.

________________________________________________

Imagine: You’re broke and driving in a vintage 1980s Something along a California highway. The odometer reads that you’ve logged almost 250,000 miles since you bought the jalopy in a different century. You’re low on gas, lower than indicated on the fuel gauge, because your car sputters to a stop in the desert outlying a once gleaming but now suffering city. If that’s not bad enough, you spot smoke from a brush fire that may or may not be heading your way. And you can’t go anywhere, unless you exit the car and run. The thing about any brush fire is that it may take you out, it may not. Brush fires are fickle that way, propelled by shifting winds.

Welcome to California, in the wake of the worst pandemic in over a century. These are times and situations that call for a new approach to the way we’ve been living. But first, how did things get this bad? Let’s zoom in on the performing arts, since the subject of this piece is Senate Bill 805 (SB 805), otherwise known as the Save the Performing Arts Act of 2021, co-authored by Susan Rubio (D, 22^nd District) and Ben Allen (D, 26^th District).

Put simply, this legislation directs financial relief to the workers in small performing arts organizations – this would include actors in theaters – in order for them to meet the minimum wage requirements mandated by Assembly Bill 5 (AB 5), which was implemented January 1, 2020. For starters, SB 805 would bring countless of impoverished theaters across California, out of the shadows of non-compliance with AB 5 – a risk with draconian financial penalties.    

The almost fatal flaw in AB 5 is that it didn’t consider how small arts organization may be poor, piss poor – the piss is hyperbolic, the poor is literal – and how the minimum wage requirement could break them.

SB 805 is a brilliantly conceived remedy that bridges the divides between art and commerce, between vocation and avocation while, at the same time, pumping resources into the kind of labor that supports communities, spiritually and fiscally.

Does the case still need to be made that, according to Californians for the Arts, the arts provide a whopping 8% of California’s Gross Domestic Product? Or that, according to 2021 report from Michigan Live, for every dollar a patron spends on any arts ticket, they spend another $12 on neighboring local businesses?

Does the case still need to be made that the intersection of the arts with local commerce provides fiscally stable and culturally vibrant communities. California still spends only 70 cents per resident on the arts. New York spends 10-times that, $7 per resident. Do people from around the world visit New York just because of the skyscrapers?

SB-805 is part of a “trickle-up” philosophy that conforms to a recent report published by the “Future of Work Commission” established by California’s Governor Newsom. That philosophy is summarized in an article co-published by Capital and Main and Sacramento News and Review:

Over the coming years, shoring up working conditions at the bottom of the economy will likely be front and center for political leaders in California. Indeed, participants in the Future of Work Commission — ranging from Labor Secretary Julie Su to trade union leaders, technology innovators, economists and business representatives — believe fundamental questions of equity and economic betterment for the state as a whole can’t be answered without bolstering work conditions and labor protections at the lowest levels of the state’s economic pyramid.

This was the idea behind FDR’s Public Works Projects (allocating funds to build highways and theaters) to haul the United States out of the Great Depression. So they called him a commie for it. But investment in labor and culture isn’t communism. It’s common sense. It’s nation building. And that’s precisely what SB 805 aims to accomplish.  

Recognition is owed to a team of local advocates for this legislation. In no particular order: Vanessa Stewart (Sacred Fools Theater), Martha Demson (Open Fist Theatre), Beatrice Casagran (Ophelia’s Jump), Emmanuel Deleage (Casa 0101), Mark Anthony Pritchett (Sacred Fools Theater), and Elina De Santos (Rogue Machine), among others.

Their collective lobbying efforts of what was once considered a non-starter bill led to its clearing the Senate Labor Committee two weeks ago. It’s now headed to the Appropriations Committee, where the advocates must make a case that’s not just ideological but fiscally sound, i.e. that investment from the ground-up is good for business. Evidence in support of this principle is overwhelming, but who knows which way the winds will blow? 

The Long View

________________________________________________

Some theaters developed large and faithful audiences who frequented local restaurants and bars before and after performances. (A report published by Americans for the Arts notes that for each arts event attended, Americans spend, on average, $20 in neighboring businesses.) But with a few notable exceptions, these theater companies themselves barely broke even.

________________________________________________

Los Angeles, being the center of the film and TV industries, has historically lured actors and writers from across the country who have, for the past four decades at least, established a community of intimate yet professional theaters (with seating of anywhere up to 99 seats) imagined, not unrealistically, as stepping stones to larger theaters and more lucrative entertainment industries. A long track record provides modest support for that ambition.

By the end of the 20^th century, Los Angeles had well over 200 small, non-profit [501(c)] professional theater companies, which often employed union stage actors. In fact, most of these companies were administered by actors – union and otherwise. The word “employed” is used loosely, since payment came in the form of per-performance stipends. This arrangement came, at the time, with the reluctant blessing of the stage actors’ union, Actors’ Equity Association (AEA), as a launching pad for its members to more lucrative employment. For actors and writers, the legit stage ecosystem didn’t come close to providing even the minimum wage, let alone a living. Income needed to be supplemented for souls to be fed. Nor was it ever intended as a living. Avocation is a better word. Some theaters developed large and faithful audiences who frequented local restaurants and bars before and after performances. (A report published by Americans for the Arts notes that for each arts event attended, Americans spend, on average, $20 in neighboring businesses.) But with a few notable exceptions, these theater companies themselves barely broke even. The gas needle perpetually caressed the empty line.

Meanwhile, the mid-size and larger non-profit theaters were facing different challenges – private and public funds being transferred from the arts to social services, combined with aging and declining audiences.

Labor Rears Its Head

________________________________________________

The new narrative was that of greedy producers who were exploiting labor in order to maximize profits. It was a narrative out of the labor movement of the 1930s that bore scant relation to LA producers in the early 21^st century

________________________________________________

Enter the 21^st century, and the onslaught of new jeopardy to the performing arts ecosystem in Southern California, jeopardy which extended to the rest of the state. First, real estate costs were ticking it up, which meant theater leases followed suit, adding pressure to already besieged stage producers who didn’t own their own venues. Hollywood alone, swiftly gentrifying at the time, saw a rash of established theaters close or flee Hollywood (Open Fist Theatre, Rogue Machine, Theatre/Theatre, Actors’ Gang, Hollywood Playhouse, The Unknown Theatre, and more, while the Ricardo Montalban Theatre morphed from a landmark Broadway-style stage venue into a movie and music venue.) Meanwhile, for the actors, writers and designers who were working in the theaters that remained, apartment rents were inexorably climbing, compounding already strained income challenges.

This was among the reasons that, from about that year (2011), the stage actors’ union (AEA) started hatching a plan to modify the code of permission by which it allowed its members to work in small theaters for mere stipends. The new narrative was that of greedy producers who were exploiting labor in order to maximize profits. It was a narrative out of the labor movement of the 1930s that bore scant relation to LA producers in the early 21^st century, described by actor French Stewart as “guys who have cat hair on their sweaters.” In fact, it was primarily landlords, not local stage producers, who profited from the spike in living and occupancy costs, as the divide between the wealthy and everyone else gaped ever wider.

Producers were the invented enemy when, between 2015 and 2016, AEA presented and implemented its new 99-Seat Contract over the fierce objections of local membership. Among the consequences of the newly imposed minimum wage requirement for rehearsals and performances was that theaters, once famed for filling their stages with actors, were now relegated financially to produce plays with only a handful of performers. And though 21 companies were placed on a AEA’s “Do Not Work” list for their refusal to sign the new contract, the union also offered carveouts of the minimum wage requirement to what the union deemed “membership companies.”

In this way, the union provided a rickety bridge over the divide between art and commerce – between theaters that announced their mission was to explore creative impulses versus the union’s mandate to protect the financial interests of its members.  

Add to that California Assembly Bill 5 (AB 5), implemented on January 1, 2020, and you have a bona-fide brush fire racing across California arts communities. AB 5 is well-intended but rashly conceived pro-labor legislation that targeted the abuses of the multi-billion dollar gig employers, such as Uber and Lyft. In November, 2020, State Proposition 22 (financed by Uber and Lyft) exempted those two companies from the new law, while non-profit theaters remain under its purview. The legislation changed the standard by which workers were classified across the State, making it illegal for a theater to classify its actors as “contractors,” as had been the norm, and requiring them to be classified as “employees” instead. For producers in theaters of up to 99-seats, the attendant taxes and benefits raised annual budgets by 30% to 70%. Since New Years Day, 2020, a significant number of theaters have simply ignored the new requirement and risked prosecution, inviting severe financial penalties should they be found out.      

Add to that a viral pandemic that has shuttered theaters and other, related businesses for well over a year, and you have not only a brush fire, but also a tornado that’s simply fanning the flames of despondency and rage.

SB 805: Rebuilding from the Ground Up 

________________________________________________

In one sweep, the Bill closes the divide between the stage actors’ union and its detractors because it actually puts the minimum wage into the hands of actors, rather than demanding that others do the same.

________________________________________________

As mentioned above, California has historically invested a fraction of its budget in the arts, compared to New York, or Minnesota which leads the nation at $12 per resident, contrasted against California’s 70 cents per resident. 

What is it that New York and Minnesota understand that California, until now, hasn’t?

Under SB 805, the bridge between art and commerce is built of steel, because the Bill helps pay for the art, contributing directly to salaries rather than to outside consultants — the standard approach of so many funding organizations. In one sweep, the Bill closes the divide between the stage actors’ union and its detractors because it actually puts the minimum wage into the hands of actors rather than making demands that others do the same. Furthermore, the poorer an arts organization is, the greater its entitlement, thereby securing stability. This is the inverse of arts funding philosophy as it has existed for decades, which is precisely what makes the bill so visionary and such a breath of fresh air.

An organization with annual budget of up to $1.4 million can submit 25% of that budget to a non-profit “paymaster” which would be the administrator and employer of record for this purpose. The paymaster would then ensure that funds are provided back to the organization to meet the annual minimum wage requirements for each employee, as listed by the company.

Furthermore, the bill, by its very design, provides a boondoggle- or corruption-prevention system, in that the funds paid back to the company go directly to the employees. There’s no way for these funds to be diverted to alternative troughs for different purposes.   

Since the 1980s, we’ve been subjected to the fallacies of the “trickle down” theory. And now, a brush fire has scorched the land.

As any layperson can tell you, when the U.S. Forest Service replants a burnt forest, it doesn’t drop Sequoia seedlings from a helicopter, to watch them crash to the earth below and hope that in 20 years, a forest will be there. They get soil under their fingernails. They plant the forest from the ground, tree by tree.

Then they take another look in 20 years, and behold the wonder of it.