Pensions and retirement

Lately I’ve been thinking about pension funds. (This is partly due to examining the art buying efforts of the British Rail Pension Fund in my research.) There was an interesting article by Lowenstein about why US municipalities are being hamstrung by high pension obligations in the New York Times (here), with quite critical letters pointing out that in the case of teachers, they were trading lower salaries for higher pensions later, and that states and municipalities had been essentially shorting their pension funds, contributing less than they should have due to… let us say overly optimistic assumptions about investment returns (letters here). So this has gotten me thinking about the situation for nonprofits, particularly in the arts.

To this end, I remembered that Diane Grams, now at Tulane (profile), did some research that was incorporated into a report for the Illinois Arts Alliance (report description here). In her work on executive compensation in the arts sector, she found that only 10% of respondents reported that their organizations contributed to a retirement fund, and of course we should interpret this even more carefully, because it is often the case that arts organizations employ many casual employees, who would not have any benefits at all. In a different research paper she presented, she pointed out that sadly, having a spouse or partner who was well paid was the main predictor of people staying in the arts area. (I’m too busy to track that one down at present.)

What concerns me is that it seems that in the US, then, people who go into the cultural areas are not only lower paid, but they are going into an area without a social safety net or provisions for retirement. Without going into any type of political discussion about the fairness of pay or whether we should value the arts more highly, it concerns me to think about people who by default in their career will have no provision for health care, and little provision for either retirement and unemployment issues. The way that these issues are handled relies on an assumption of long-term employment conditions that seem outdated even for workers outside the arts today, where job switches and contract work have become quite frequent. The erratic and contract based nature of creative jobs is even more dissimilar to our traditional views of working for one firm who would provide for health care and retirement. (Firms themselves find retirement and health care costs increasingly difficult to bear, even if they might want to, but that is a topic for another time.)

But there are now also a few interesting programs that are being set up to try and provide for the welfare of artists. In the case of visual artists, we have the Artist Pension Trust which is attempting to provide for artists in the future through donations of their work over time. (Interestingly, they incorporated as a for-profit financial services firm, currently private, although if one thinks about compensation structures for people in finance, a nonprofit structure might not have been able to attract as many financial experts.)

It is also interesting to think about what happens when these provisions are not via a firm, but are instead handled by the government, as we see with the quite different situation in the UK and EU. Although they are having similar pension struggles with older workers, in the UK working artists can use the benefits of the National Health Service (NHS), pensions via the national insurance scheme, and more flexible unemployment benefits that are more compatible with the flexible, short-term contract based work of artists and performers.

We only have to look at the vibrant contemporary arts production in cities like London and Berlin to realize that artistic work might not be well paid, but that it does not necessarily have to mean that you should not be able to have health care, unemployment, disability or basic retirement provisions.  Well, if I were an artist, I think you can imagine where I might be looking to move.