The Rappers’ Union

Karl Muth outlines why hip-hop artists should seriously consider unionizing, but probably won’t.

I’ve been a fan of hip-hop, and particularly West Coast hip-hop, for a long time. I’ve even given lectures on the economics of the hip-hop industry (and have no doubt, it is an industry) and the rise of Dr. Dre (hip-hop’s first billionaire) and other related topics. I also give consideration to the challenges facing hip-hop artists and the unusual system of advances, dozen-track deals, and other mechanisms by which new players tend to be brought into the game. Most fans probably do not think of Dr. Dre or Jay-Z as “workers” but I do. Yes, they are also equity stakeholders in their employers – but so are baristas at Starbucks.

One of the things that has always interested me, as someone who is both a hip-hop fan and an economist, is why certain groups don’t organize. One of the groups that I would think might organize is hip-hop artists. Why? They are similarly-situated, tend to be negotiating for similar terms as workers, tend to have similar career trajectories (going from small advances, minimum residuals, and split tour contracts to stronger percentages of major income streams), and worker-owned systems of production (independent labels) have proven hard to sustain. It seems like a fertile environment for labour unions.

So, why has there never been a rappers’ union?

One of the problems is that collective bargaining – the centrepiece of modern labour negotiations – is difficult in an environment where workers’ interests seem similar to the employer but unique to the worker. Normally, unions come out of the opposite scenario, where the workers concede they are essentially interchangeable but the employer would rather negotiate with them individually. Hip-hop is precisely the opposite. To your average record label executive, five different rappers from Atlanta are pretty much interchangeable and the slight differences might come from how marketable one is versus another. But to the artists, they insist they are wildly different from one another, defeating their ability to bargain alongside one another.

The other problem, perhaps even more fundamental, is that an entire infrastructure is built around developing rap talent and siphoning off profits. I call this this the hip-hop industrial complex. It’s a network of Los Angeles-based entertainment law firms, agents with enormous mortgages in West Hollywood, near-end-of-career record execs lunching in Beverly Hills, and half of the customer list of the 400-block of Rodeo Drive. While the art of hip-hop might span from Compton to Brooklyn to Brixton to Shinjuku, the business of hip-hop is West Coast. Checks are cashed all over the world, but they’re cut on Pacific Standard Time. The inefficiencies in this industry – unlike, for instance, paid-by-the-hour builders – run in favour of management, not labour.

Nearly everybody in the hip-hop industrial complex is paid either by the hour or mostly in bonuses. In fact, it’s not unusual for some record executives to have bonuses of three to five times their salaries. The bonus is everything – it’s the difference between borrowing your girlfriend’s Lexus for business dinners next year or taking delivery at Galpin Aston Martin. It matters. And those billable hours and big bonuses don’t exist if rappers unionise. The entire business is built on inefficiency, on entertainment lawyers doing the same negotiation day after day with the same labels and pretending it’s a new thing that requires hours of research and tens of thousands of dollars’ worth of work. The profitable inefficiency extends to the labels, the handlers, the agents, and everyone else trying to get paid ten to fifty times for doing precisely the same thing over and over again.

As a liberal economist, I generally oppose labour unions and their effect on wages and the organisations they exist within. However, this is a rare case where I would not characterise unions as parasitic. Rather, they might actually add efficiency by revealing that most of these situations are essentially identical and vulnerable to precisely the kind of standardised, collective dealmaking that unions are optimised around. In fact, if hip-hop artists would take a step back and realise they are workers doing a similar task within a similar set of constraints, perhaps they could arrive at a deal where everyone would be better-off.

But this would involve something hip-hop artists are notoriously bad at doing: admitting that they might not be all that special.