Behind the Curtain - Writing Advice
| Subscribe to Dean Murray's Mailing List |
|
Joining the mailing list will let me keep you in the loop as new stories are released. Additionally, people on the mailing list will get neat extras from time to time. |
There's a fairly hard and fast rule of life that I worry many of us, writers included, tend to lose touch with. By and large, we tend to earn what we're worth.
We're probably all guilty of pointing to someone who seems to have no redeeming feature to their being, and wondering why it is that they are independently wealthy, or earning more than us, or already retired while we're still facing thirty plus years of work.
Speaking very broadly, there are a few things that really impact how much any of us will earn over the course of our lives, and when we forget that relationship we're on the track to bitterness and delusion rather than improving our chances of getting where we want to be.
One of the things to remember is that competition tends to bring the price of anything down. That's especially true in the labor market. I may be too proud to raise cattle for less than $100/hour, but there are plenty of people who would do it for much less, possibly because they really need to provide for their families, or even because they enjoy animal husbandry. (I choose raising cattle as an example because it's something I've done before, and for much less than $100/hour. Don't tell my father, but I even enjoyed it from time to time.)
If everyone felt like raising cattle was repulsive, or if there were relatively few people with the skills required, I could possibly get my $100/hour wage, but since that isn't the case, I'll never make the much hiring on as ranch hand.
In short, the amount you make tends to be inversely related to the legitimate competition for your particular job. I say legitimate because most people would say they'd be happy to work as a CEO for a multi-billion dollar corporation and reap millions of dollars in bonuses, but relatively few of us could even get in the door for an interview. We lack the particular set of skills required to manage people, to motivate employees, to comply with statutory regulations, etc. that are prerequisites to the job, so we aren't really part of the block of people competing for those jobs.
So how do we limit the competition? One of the ways is by choosing jobs that are particularly undesirable to the vast majority of the population, but that's not a very sure-fired route. Most things become much more attractive to people if there is enough money involved.
A better solution is to acquire skills, abilities or attributes that aren't held by very many people. If I were the only person who knew how to fly a plane for instance, I could pretty much name my price, and there would be someone who needed to fly so badly that they'd be willing to meet it.
Now it's worth mentioning that competition is relative to the number of jobs. Therefor if there are ten thousand other people who can fly a plane, but one hundred thousand different jobs requiring full-time pilots, I'd still be in pretty good shape. I might not be able to command millions of dollars per day, but there would be essentially 100 different companies or people bidding for my service. For some of them my ability to fly wouldn't be all that valuable, but for others it would be very valuable, and I'd profit as a result.
Interestingly enough, a similar thing happened with COBAL programmers in the years leading up to Y2K. Many businesses had large legacy programs written in COBAL that needed updating prior to Midnight of 12-31-99. Through a variety of mechanisms, retirement of older programmers, other programmers letting their COBAL skills lapse in favor of other programming languages, there was a relative scarcity of COBAL programmers at this time. For period of time I understand that COBAL programmers who were able to go in and make these systems Y2K compliant were being paid a substantial premium over other programmers.
Obviously there were businesses that opted against paying that premium, but for those that risked losing millions of dollars per day if their systems went down, they had no choice but to pay that premium.
So, acquiring skills is one way of limiting your competition and raising your relative value to employers. I've probably beat that horse long past it's death, but it's something that's worth repeating.
Obviously that isn't the only way to increase your earning power. I'd like to mention two more that are closely related and likewise pertinent to authors.
One is that the amount of capital (or investment) either human or otherwise involved in a particular pursuit. My dad has a saying that I've loved for quite some time. “Corporations don't make money, people make money.”
Like any saying, you have to be careful taking it too far, but there is a profound kernel of truth there. Companies make money by paying less for their people and resources than the value those people or resources generate.
Truly phenomenal earnings are usually unlocked when resources are pooled together. Take for example an NBA player. While they may be able to do some really amazing things with a basket ball, they'd never make as much as they do now if they were dribbling a basketball as a team of one on a dirt court around a hundred spectators. It is only when they are combined with teammates and opponents (a form of human capital as each of those other individuals have spent thousands of hours perfecting their skills) that they begin to shine.
Interestingly enough, even that human capital isn't enough to really bring the money in. It's only when you add the massive capital investment of a stadium that you can pack enough people around the game to start bringing in enough revenue to justify really big salaries.
This holds true in nearly every industry out there because the inclusion of capital into a job tends to allow for greater productivity and therefor the creation of greater value. A farmer with a tractor is able to effectively feed thousands where the same man using nothing more than the power of his own muscles would struggle to feed more than a couple of families.
This leads us into the last area I'd like to touch on. It's closely related to the idea of capital, but it's worth mentioning as a separate subject. The value of our work also tends to be proportionally related to the ease of distribution of said product.
Returning back to our basketball analogy, even the inclusion of a stadium wouldn't justify the salaries today's athletes routinely command. While stadium proceeds represent a significant percentage of the team's receipts, they aren't the entire story. It was only with the advent of television that it became possible for a basketball team to take their product and distribute nearly the same quality work to an unlimited number of people for almost no extra money.
Now you can argue with regards to how much better or worse watching a game live is over watching it at home on the TV, but the fact is that once the capital investment has been made in the infrastructure that allows a game to be broadcast nationally, it doesn't really cost the team any more to broadcast the game to 5 people instead of 4, or five million instead of one million.
The same principle holds true for publishing to a certain extent. Once the editing and printing setup has been paid for, each additional book can be printed off for a relatively small cost. The amount actually paid to the author is usually a fairly minuscule percentage (less than 10%), but tens of millions of books are sold, that 60 cents per book can add up to truly amazing sums.
Now if you think about where the money goes, that's likewise interesting, but there is one more thing to note before that. There is generally a tremendous amount of capital involved in bringing a book to that audience of millions. First you have the human capital at the publishing house, editors, marketers, CEO's, etc. Then you've got human capital at the printers, and generally a tremendous investment in the machinery that allows them to print out millions and millions of books over the course of just a few weeks or months.
I know, it's already adding up to more than most of us are worth on any given day, but it doesn't stop there. You've also got all of the capital invested in the stores that distribute the books to all of us happy readers. There is human capital there, investment in the physical store, and somewhere along the way someone's fronted the money for all of that paper, generally before any of the consumers have paid a single cent.
Just in case anyone isn't overwhelmed yet, don't forget that there are literally billions of dollars in infrastructure investment that's also required to get the book from the author to the readers. If we authors had to hand deliver each and every copy to our readers, all without the benefit of the internal combustion engine, not only wouldn't we get rich, we'd probably starve. It's only the existence of thousands of miles of road, rail, and navigable waterways that make the task of distribution even remotely feasible, and even then you've got more invested in the trains, trucks and ships that actually carry the books.
Luckily the biggest cost of all, the rails and roads, have been subsidized by the public, so we get the benefit of using them at far below the rate we'd probably have had to pay if they'd been funded entirely by a private citizen.
So that being said, where does all of the money go? Some goes to the people who've invested some of their time and human capital and time in the project. The editors, marketers, printers, truck drivers and clerks at the book stores. All of those individuals are generally compensated in line with the time and resources they bring to the project, but it is unlikely that any of them will get independently wealthy off of the publication of one book.
Some money goes to the individuals who'd invested non-human capital into the project, the actual owners of the trucks, trains, and printing presses to compensate them for dedicating those resources, temporarily at least, to our imagined best seller.
What is left over tends to go two remaining places. In no particular order, the owner of the publishing company, and the author. Why those two you might ask? On the one hand, the publisher generally invested a tremendous array of financial resources in bringing the book to publication and in printing up all those copies before any money actually comes back their direction. The investment and the risk undertaken there I think speak for themselves.
So why the author? Well, they've created something uniquely theirs, something that appealed to millions of people enough for them to part with their hard-earned resources in return for the opportunity to read it. Not only that, but they've likely spent years honing their skills in order to become able of creating such a product. While I think the work is admirable in and of itself, the money ultimately flows to the author because nobody else can do exactly what they are doing.
So the key take away points? Cut down your competition by acquiring skills that are relatively rare or unique. Find something that will allow you to take advantage of large amounts of capital in your work, and create something that has as broad of an appeal as possible. If you can find ways to involve capital that is relatively free (like the the US transportation system, or the Internet) then you're even further ahead. Good luck, and happy earning.