The war of words between aggrieved animators and Nitrogen Studios about the conditions workers experienced during the production of Sausage Party, is more like a high-profile skirmish for an industry that is constantly being remade by globalization and technology.

“Every studio can get the work done cheaper now,” Steve Hulett, a former Disney animation writer and long-time business rep for the Animation Guild, tells Inverse. “All they have to do is outsource it to a job shop, and let the job shops bid on the work, and they’ll lowball each other to get it. It is a low-margin business, because everybody is bidding against one another.”

The Seth Rogen vehicle, about foul-mouthed foods living in a grocery store, had a surprisingly big opening $33-million weekend at the box office. But the windfall arrived with a slew of complaints about the animators’ working conditions. Anonymous commenters who worked on the film took issue with directors Greg Tiernan and Conrad Vernon. The duo publicly and repeatedly boasts about delivering the film on paltry $19 million budget. This budgetary achievement, the animators claimed, was the result of Nitrogen Studios demanding significant concessions – like unpaid overtime – from its workers.

The animators wrote an open letter to Nitrogen, which Tiernan founded, in December that alleged the filmmakers had been “intimidating staff into working past official studio hours, [using] disciplinary measures utilizing fear tactics that demotivate and cause distress (such as threatening to terminate employment), and implying that other departments are working overtime ‘voluntarily as a reason to deny compensation.”

The animators and sources say that Annapurna, the company that produced and financed the film, stepped up to fix the compensation issues after the letter was sent. But the lack of back pay and credits on the film for many of the departed artists led to animosity between the crew and the studio. When that bad blood boiled over, drama leaked into the public eye.

WESTWOOD, CA - AUGUST 09:  Directors Conrad Vernon and Greg Tiernan attend the premiere of Sony's 'Sausage Party' at Regency Village Theatre on August 9, 2016 in Westwood, California.  (Photo by Alberto E. Rodriguez/Getty Images)
WESTWOOD, CA - AUGUST 09: Directors Conrad Vernon and Greg Tiernan attend the premiere of Sony's 'Sausage Party' at Regency Village Theatre on August 9, 2016 in Westwood, California. (Photo by Alberto E. Rodriguez/Getty Images)

The animation industry has been dealing with labor issues for almost a century. By the 1930s, much of Hollywood had unionized — everyone from actors and directors to writers and technical workers — and animators wanted in. The cartoon industry was booming, and the amount of workers required for increasingly complicated cartoons was swelling, giving animators power in numbers. In 1938, the Screen Cartoonists Guild began aggressively recruiting and pushing for recognition, and several of the studios, including MGM and the producers of Looney Toons, soon accepted their employees’ unionization.

The Walt Disney Studio, the gold standard of innovation and success in the industry and by far its biggest employer, proved a much more difficult challenge. Its artists were just as keen to organize as their colleagues elsewhere, but when they began the push in 1941, Walt Disney was furious and hurt. He saw his staff as an extension of his family, but for many, the low pay and lack of screen credit meant he was not an ideal patriarch. Disney fired 17 workers for being pro-union, and hundreds of the remaining workers went on a nine-week picket strike. Eventually, the National Labor Relations Board stepped in and brokered an uneasy peace that led to unionization and skyrocketing pay packages.

In the 1970s, Steve Hulett says, studios began outsourcing TV animation work to cheaper workers overseas in Asia and other countries; Hannah Barbera was especially known for this practice. The number of animated show exploded due to syndication deals in the the ‘80s and ‘90s, and modern streaming services have grown the industry even further, especially as companies have discovered the value of merchandising and ancillary products. Disneytoons, which produced the Tinkerbell movies, had most production on those films done in India, even though the pre-production was done in California.

The animation explosion has been both a blessing and a challenge. When Hulett began at the Guild in 1989, it had about 700 members; now, it has nearly 4,000. But while the Guild used to represent almost every animation worker, the union now only counts a sliver of them amongst its ranks; subsidies from foreign countries and other states have sent jobs all over the map.

Nitrogen is one of many major animation and visual effects subcontractors based in Vancouver, which has become a hub for both live-action and post-production over the last decade. The attraction has been twofold: British Columbia labor laws, and the very rich incentives given to producers to make their projects in the territory. This year, the incentives are estimated to top $500 million CAD, over $400 million USD.

“Nobody’s going to Vancouver because it’s cheaper,” Steve Kaplan, International Representative for the VFX Union at the IATSE, told Inverse. “They’re going because the province gives subsidies.”

Live action gets even bigger subsidies from the province, which is just one of several Canadian territories that flashes cash at the industry.

“It makes good business sense; if you can get some chucklehead — in this case, the Canadian taxpayer — to cough up 50 cents on the dollar for you to do your movie up there, why not? It doesn’t make sense not to,” Hulett says. “The biggest welfare queens around are movie conglomerates. All they do is go where there’s free money. If you’re poor and getting a subsidy, you’re beneath contempt, but it’s perfectly OK if you’re a large corporation.

The major studios have largely kept feature animation in California, but that may change, too. Already, Illumination — the Comcast-Universal subsidiary that produces the Minions movies — keeps costs down by producing movies in France. And while California Governor Jerry Brown has pushed hard for film subsidies in the state to keep productions around, there is currently no money being offered for feature animation. Soon enough, studio features could go the way of the animated TV show.

A growing proportion of the animation you see on television is made by Vancouver-based studios like Nitrogen, Bardel, and DHX Media, which employ both American and Canadian artists. This year, producers were offered a 17.5 percent refund for animation and post-production work done in British Columbia, while the basic production credit is 28 percent this year.

Bardel works with every major studio, from Disney to Warner Bros. and Nickelodeon. DreamWorks Animation, which has produced a record amount of animated programs for Netflix over the last few years, has spread much of the work across various Vancouver studios. While nearly every animation worker in Hollywood is covered by a union, or at least receives fair overtime, BC law doesn’t require that sort of compensation.

“The long and the short of it is, they have technology carve-out exemptions for overtime,” Hulett explained. “The question becomes, the IATSE [the guild’s parent union] has taken a position that people working on visual effects and animated features are not technology workers in the sense of the regulation, they are film workers. They’re not exempt. That’s the union position. The studios have a different position.”

Jonathan Jacobin, a veteran VFX artist who spent several years working in both Vancouver and Montreal, says he’s heard a lot of rumors about these sorts of demands, but never experienced the issues that the Nitrogen artists complained about.

“There are a lot of rumors going around that if you don’t play ball with production demands, don’t do the overtime they ask for (paid or not) you’ll be fired and/or blacklisted, but I never saw that for myself nor did anyone I know in this industry,” he told Inverse. “I know artists who do very little overtime and while they get a lot of pressure from production and supervisors it’s not really a problem as long as they deliver. While there’s a lot of abuse in the VFX world and a lot of labor laws are not respected, if the artists just stood for themselves and went home when asked to do free overtime, it would be a lot better.

Hulett and Kaplan would suggest that without the support from a union, it becomes difficult for workers to stand up for themselves. And VFX artists are in an even more precarious spot than animators when it comes to fighting for their rights — if they even technically have them at all. Even ILM, which is owned by Disney, is not unionized (and neither is Pixar).

As practical effects began being replaced by increasingly impressive digital graphics, new kinds of skilled workers were required to execute post-production duties. In the ‘90s, studios were both throwing money at effects artists who could get the job done and opening their own in-house effects divisions, some of which were unionized. Most of those folded within a few years — Disney and Warner Bros. shut down their internal shops very quickly — and began outsourcing the work to job shops in California.

Kaplan remembers working for these digital shops back in the ‘90s, perfectly content with the gobs of money he was making for his rare expertise.

“At that time, the unions came around, I was one of many who said, ‘What the hell do we need for? We’re doing just fine,’” he recalled. “The argument for getting under contract while you can, fell on deaf ears. Over time, when production kept the work away from union agreements by keeping them at vendor studios, it became incumbent on the union to organize the people at those studios and include them in agreements.”

Protests at the 2014 Oscars
Protests at the 2014 Oscars

Now, VFX artists are being squeezed more than ever, and outside of California, they don’t have a either a union or labor laws to protect them. Most major VFX companies — including Peter Jackson’s WETA, which is in New Zealand, and MPC in London — operate outside the United States, and thus are staffed outside of Hollywood’s typical labor laws.

VFX artists and animators often end up relocating to wherever they can find work, which only adds to the feeling of displacement and resentment amongst crews (as well as local citizens, who are finding these incentives don’t always prove to be good investments. Protests at the 2014 Oscars were meant to draw attention to the issue of subsidies and out-of-work VFX artists; the firm that won an Oscar for the visual effects in Life of Pi that night had gone bankrupt a few weeks before.

“Abused crews in animation is not at all unusual, it happens all the time,” Hulett says. “In VFX, it happens a lot. This isn’t to say people don’t make pretty good money, but theyre working seven days a week, 14 hours a day, and so their hourly isn’t all that high. Instead of judging on a 40-hours per week, you’re looking at 80-to-90 hours a week.”

As the demand for content continues, there will be no shortage of jobs for talented animators and effects professionals. But as long as subsidies also persist, and labor laws don’t change, it’s hard to predict that things will get much better for animation and VFX workers — and not every article’s anonymous comments section will get as much attention as the one that set off the Sausage Party furor.

Photos via Getty Images / Alberto E. Rodriguez, Cargo Collective

Jordan is now grudgingly willing to call himself a veteran journalist, as he's worked at Yahoo, BuzzFeed, The Hollywood Reporter, and The Huffington Post. A Syracuse grad originally from New Jersey, he makes movies when not writing about them, and has a serious aversion to irony.