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Friday, 10 May 2013

More thoughts on Model Price/Wage Fixing - A further reply to the Competition Commission

The Competition Commission responded to an interview with me about the price-fixing decision against the Association of Modelling Professionals of Singapore.

The interview is here:

http://news.asiaone.com/print/News/Latest%2BNews/Singapore/Story/A1Story20130506-420591.html

The ST Forum response is here:

http://www.straitstimes.com/premium/forum-letters/story/modelling-agencies-price-fixing-had-adverse-effect-market-20130509

I have always found public battle of words on the pages of Forum pages unseemly and have chosen not to write in a reply.

I will blog a reply here insteaad.

I have said what I wanted to say in the interview - that the goals of the association was to raise wages, which we succeeded in. It was a pity that it was interpreted as price-fixing.

Two further points in response to CCS's letter.

First, on commission. CCS stated that the higher wages also increased our commission. This is a true but trite fact. Agency commissions are a fixed percentage that did not change; and given the 75-25 split to the model, the bulk of the wage increases went to the models.

More importantly, if the agencies really wanted to price-fix, they would have colluded to fix commissions, not wages. In fact, US agencies colluded to fix commissions and were taken to court in a class-action suit and also investigated by the Anti-Trust authorities there. This was something the Singaporean agencies did not do.

Secondly, CCS said that there was an "appreciable adverse effect on the market."

The question is: who makes up the market? Who was adversely affected?

The answer will surprise readers.

The modelling association was found guilty specifically of fixing 'prices' (wages to models) for fashion shows and fashion shoots.

The major client of fashion shoots are: SPH and Mediacorp.  The government-linked, Temasek-owned media duopoly. 

In a duopoly, the wage/price setting power lies with them, not the supplier of labour - in this case, models.

For years, the models have been paid a pittance until the association bargained for higher wages.

So who was adversely affected by the price/wage fixing? Answer: the 2 big magazine companies who can very well afford to pay more per hour to these young people.

Who are the biggest clients of fashion shows?

The two biggest employers of show models were the Singapore Fashion Week and the Singapore Fashion Festival.

Who are behind these two national events?

The Singapore Fashion Festival is backed by the Singapore Tourism Board, and the Singapore Fashion Week by IE Singapore.

Yes the Government.

So who was adversely affected by the rise in fashion show wages (prices) - Government Agencies.

Therefore in summary, the biggest 'clients' that were 'adversely affected' by our 'price-fixing' (which increased the wages of poor young people) was not some poor man on the street, but government owned media monopolies and government agencies themselves.

Enough said.














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