The Hollywood Model of Employment

In 2011 Career Plan and many other books, I write mostly about careers that people pursue by going to work for someone else. To be sure, freelance or self-employed work is not uncommon in some occupations I describe. When I write about job-hunting, however, I generally write in terms of getting hired. However, some people who write about the future of work suggest that this kind of work arrangement is soon going to fade away. It’s an intriguing theory, but I don’t buy it.

The argument is that the “Hollywood model” will become the new norm. In the days of black-and-white movies, Hollywood studios kept writers, directors, cinematographers, editors, set designers, and other workers--even actors--under contract as full-time employees. But nowadays a movie producer brings together a team of workers with no commitments beyond the project at hand.

Some futurists argue that this will become the model for other industries--all the more likely as we see decreases in noncreative work, such as mass manufacturing, and increases in more creative work, such as research and development. Teams of creative workers will come together for a project and disband when it’s completed.

This new work arrangement is supposed to make the creative industries more competitive. It gives the project manager (in Hollywood, that would be the producer) the ability to put together the most appropriate team for the particular project and gives the talented workers the freedom to choose which projects to work in. This is supposed to increase the creativity of the output, because flexibility in the makeup of the team should avoid a cookie-cutter approach to the creative process. Moreover, this arrangement is supposed to save money, because the organization (in Hollywood, that would be the studio or production company) is not carrying the overhead of a large staff of salaried employees.

This alleged trend toward ad-hoc work arrangements should be encouraged by modern telecommunications technology. Nowadays you don’t even have to be on the same continent as your teammates to collaborate on many types of projects. In addition, traditional notions of loyalty to one’s employer have long since crumbled and no longer present a barrier to a more tentative employment relationship.

In the late 1990s, I had been reading several books that argued that this was the emerging model for work. At the time, I was convinced by this reasoning, and I even drafted an article arguing in favor of this prediction.

But I no longer believe that this change will happen anytime soon. One reason for my skepticism is the passage of time: Almost all of these factors have been present for the past 15 years, yet no paradigm shift has occurred so far.

You, too, may become a skeptic after visiting your local multiplex. Has the Hollywood model really contained movie production costs? And after the umpteenth movie in which an odd couple hits the road, an irresponsible schlubby guy woos a hot gal, or a superhero battles the forces of evil, do you really think Hollywood is more creative now than in the heyday of Louis B. Mayer and the Warner Brothers?

In the current model for the film industry, word of mouth quickly kills off every movie except a few blockbusters. Seeking a blockbuster, then, producers spend megabucks to inject larger-than-life stars or larger-than-life special effects into a predictable concept that has been pre-sold to the public, such as a formulaic plot, a sequel, or a 30-year-old television show. I wonder whether other creative industries can achieve any better results by following the Hollywood model. Software publishing may be the dominant industry of this kind, and almost all the applications on my desktop are only cosmetically improved over what I was running a decade ago. Most of the advances in software have resulted from breakthroughs in hardware platforms.

Here are some important factors that I believe will continue to discourage project-based work arrangements in the near future:

• Health insurance costs continue to climb, and we’re seeing only slow movement at best away from a system that is employer-based and that can deny you coverage easily when you’re not a full-time worker.


• Job security has become a much greater concern since the onset of the Great Recession. (This is why the book I’m working on right now is called 150 Best Jobs for a Secure Future.) People realize that we are a long way from recovery of the jobs lost and that few safeguards have been put in place to prevent a repeat of the financial collapse. Because job loss means loss of health insurance, couples increasingly want at least one partner to have steady employment.


• The trend toward creative work means that an increasing number of companies are engaged constantly in creative projects and do not need to dismiss their workers after one project is finished. Creative workers are needed now more than ever, and so the companies that have identified and used their talents are reluctant to let them scatter to the four winds.


• Companies that only occasionally need creative workers can sometimes fill these needs by finding full-time employees who work elsewhere but are willing to moonlight. Moonlight income is very welcome these days of stagnant salaries in most industries.


• The project-based work arrangement requires creative workers to spend part of their work time lining up the next project. Many creative workers find this a drag on their ability to focus on the project at hand.

I am living proof of what I’m describing. After I was downsized in the late 1990s by a company that had only intermittent need of creative workers (at least in my area of expertise), I worked as a consultant for some years, doing project-based assignments. One such assignment, from JIST Publishing, turned into a series of assignments, then a half-time job, and finally a full-time job when JIST discovered that my skills were a good fit for the company’s needs and would be in constant demand. The same modern communications media that allowed me to work for JIST from home on a project-by-project basis enable me to work for JIST from home now as a regular employee.

The Great Recession has made me even more convinced than before that the traditional work arrangement remains preferable to a project-based scheme. I believe that my view is not idiosyncratic but is shared by most workers who theoretically should be able to work in a project-based arrangement.

Licensure Affects Health-Care Costs and Earnings

Three years ago I blogged about a study of occupational licensure. (The blog appeared on a site where it has since been taken down, but I have reposted it on this site for your perusal.) The study found that in 2006, 29 percent of the national workforce was licensed by some level of government, a percentage much higher than I expected. The economists also found that licensure provides a pay boost roughly equivalent of that of union membership: about 15 percent. One reason it does this is by limiting occupational entry, thus reducing competition.

Last week I came upon a more recent study (PDF) by two labor economists--Morris M. Kleiner of the University of Minnesota and Kyoung Won Park of Case Western Reserve University--that focuses on just two licensed occupations: dentists and dental hygienists. The research caught my eye partly because of my continuing interest in the effects of licensure and partly because dental hygienists is an occupation that I frequently include in books about highly rewarding occupations, such as Best Jobs for the 21st Century. In the sixth edition, which I just finished writing, it ranks sixth among the best 400 occupations, with average annual income of $68,250, projected growth of 36.1% from 2008-2018, and 9,840 annual job openings projected. To these rewards, add the attractions that one can enter this career with only an associate degree, and it offers many opportunities for part-time work.

But another unusual fact about dental hygienists is that the occupation’s licensing standards in almost all states are set not by its own practitioners, but rather by practitioners of another occupation, dentists. Dental hygienists were created as an occupation that would help dentists by taking over certain routine tasks of patient care, especially cleaning teeth and teaching patients techniques of good preventive dental care.

As the occupation has evolved, some dental hygienists have attempted to increase their autonomy and get out from under the supervision of dentists. So far, this effort has been only partly successful. In 1988, Colorado became the first state that allowed dental hygienists to practice without the direct supervision of a dentist. As of 2007, only seven states allowed dental hygienists to be self-employed other than as independent contractors, and only three of these states allowed them to own a dental hygiene practice. These independent practitioners can do various tasks besides cleaning, such as application of sealants, fluoride treatments, or X-rays, but the particular mix of tasks varies between states. As a result of the legal restrictions in most states, only 0.1 percent of dental hygienists are self-employed, compared to 28.0 percent of dentists.

The economists who researched these two occupations found a good reason for dentists to restrict the autonomy of dental hygienists, entirely apart from the best interests of patients: It turns out that in states where dental hygienists can practice independently, their hourly earnings are approximately 10 percent higher, and those of dentists approximately 16 percent lower, than in other states. In addition, employment growth for dental hygienists is about 6 percent higher where they can practice independently, whereas for dentists it is about 26 percent lower.

One finding with implications for public policy is that allowing dental hygienists to practice independently reduces a state’s dental-care costs by 1 percent. It also broadens employment options for women, because dental hygienists are about 98 percent female, whereas dentists are about 78 percent male. Furthermore (and here I’m just speculating), it may provide additional opportunities for social mobility, because a career as a dental hygienist may appear attainable to young people who come from families that have no history of college completion and who (rightly or wrongly) rule out the goal of becoming a dentist. In other words, the independent practice of dental hygiene may provide an on-ramp to the middle class for some people.

As for dental hygienists, so for nurse practitioners: you will also find great variation in state laws regulating their ability to work independently. In some states, especially Western states with a lot of rural territory where doctors are scarce, nurse practitioners can act as primary-care providers. It would be interesting to see a similar study of how these state-to-state differences correlate with the earnings of nurse practitioners and physicians--and also the impact on health-care costs, which are currently the focus of much political discussion.