Just In Case You Thought The Grinch Didn’t Do Thanksgiving

The New York Times’ headline says it all: Met Opera Seeks Pay Cuts in Exchange for Pandemic Paychecks, The Met is offering many employees their first paycheck in months if their unions agree to long-term cuts.

If you dig into the 11/20/2020 article by Julia Jacobs you’ll find out more about what’s going on, but it really is that simple.

The Metropolitan Opera has offered to start paying many employees who have been furloughed without pay since April up to $1,500 a week in exchange for new union contracts that include long-term pay cuts, the company’s general manager said in a meeting with staff on Friday.

In case that’s not enough, the Met was also seeking substantial changes to work rules.

Neither The Met nor their unions divulged just how big those cuts or concessions are but the article did include a snippet about one term making clear that recovering any financial losses in salary would be connected to ticket revenue.

Perhaps unsurprisingly, none of the unions have jumped on the offer.

By attempting to couple compensation improvements to ticket sales (i.e. earned income), the employer can control that fixed cost by any number of methods such as reducing performances, deliberately selling short, papering halls, etc.

For orchestras and operas, labor compensation costs are projected multiple years into the future and baked into the larger institutional budget. In short, its an expense which needs to be offset by revenue. Right now, whenever earned (or investment) income falls short, that slack gets picked up by contributed sources (i.e. unearned income).

You can begin to see how the donor class benefits from removing that expense off their plate. Historically, these sorts of proposals are not only non-starters with unions, they also throw a tanker truck amount of fuel on the bargaining fire.

Speaking of history, the Met’s general manager, Peter Gelb, has consistently and, by numerous insider accounts, gleefully embraced his inner pyromaniac during his tenure so this move isn’t a surprise. At the same time, to say it’s a disappointment to see it wielded this way during a pandemic is an understatement.