My Two Cents – What a Difference Five Percent Could Make

The Writer Beware! blog’s Victoria Strauss posted an intriguing piece based on a recent Twitter frenzy on the possibility that literary agents might bump their rates from 15 to 20 percent.   The comments, as one might expect, are all over the place, with readers coming down on this or that (or the other) side of the debate.

Professional writers, who usually have to keep a day job just to survive, would understandably be concerned about any cut in their income.

But, I got involved in the discussion to say that bumping my agent’s salary by a third (15 + 5 = 20) at a six percent cost to me (5/85 = roughly .06) seems like a fantastic idea.  It reminded me of an anecdote about how Henry Ford became rich:

In 1914, Henry Ford made a “bet the company” decision. Conventional thinkers thought he was insane. Those without Ford’s imagination were certain his decision would send Ford Motor into bankruptcy.

What did this radical industrialist do?  He chopped the workday down to eight hours, and he doubled employees’ daily wages. But he did not do this out of compassion. He had no desire to share the wealth. He made a hardheaded business decision.

Absenteeism plummeted. Worker turnover virtually disappeared. So did the number of accidents; ditto the number of manufacturing defects. Meanwhile, productivity soared. And the automotive age was born.

Not that I’m implying that a 15-percent agent is prone to mistakes and neglect, but I can’t imagine that a 33 percent happier agent wouldn’t result in a writer easily recouping that 6 percent investment.

But, there was also some talk about the perceived scarcity of publishing dollars.   One commenter proposed:

If the problem is that there are too many agents chasing not enough money, then there will be a natural winnowing process that will solve it.

Well, there’s also the issue of how much work the agents are doing for their 15 percent; reducing the overall number of agents without reducing the overall number of agented writers would result in each writer getting less service for that 15 percent rate, which is economically no different from getting the same service for a higher rate.

Assuming, of course, that bumping up the rate to 20 percent wouldn’t allow agents themselves to carry out the “winnowing process,” shedding the least-likely-to-sell, focusing more time on the better writers, raising the overall quality of the publishing pool, and thus making everyone happier.

(Except, of course, those least-likely-to-sell writers who got themselves winnowed.)

Other commenters at Writer Beware!, however, put forth that the problem wasn’t that there was not enough money, but that profits tend to float upward while costs sink downward:

Everyone wants to raise their income, and most do it by taking from the next person lower than them on the totem pole.  Writers are the bottom feeders in this type of process.

Another commenter explicitly stated that publishers were making too much compared to agents and writers.  Even though the typical writer does not make enough even to quit his or her proverbial day job, I felt that this was quite a claim to make in the face of the not-altogether-rare millionaire best-selling author.

Are publishing executives really that far removed from agents and authors? I decided to do a little unscientific impromptu Google research.  What I found were these figures at New York Magazine‘s “Salary Guide”:

Books
Malcolm Gladwell – $1.5 million

Author, Blink
(advance, plus $250,000 New Yorker salary and $30,000 per speaking engagement)

Jonathan Safran Foer – $1 million
Author, Extremely Loud and Incredibly Close
(advance, plus $12,500 per speaking engagement)

Judith Regan – $1 million
President and publisher, Regan Books

I have to be honest, I was a bit surprised to see that the infamous Regan was making a salary comparable to some of the best-selling authors on the planet, i.e. the people who actually produce the stuff that she packages.  When you subtract their non-publishing income, in fact, Regan makes made (she was suddenly fired, which I hear is not all that uncommon in publishing) more than they do.

But, if Regan’s million-dollar income seems astronomical to the average day-jobbing author, at least there’s not the huge gap we see at Barnes & Noble:

Stephen Riggio – $4,813,567
CEO and vice-chairman, Barnes & Noble

Lisa Jong – $12,896
Clerk, Barnes & Noble
(32 hours a week at $7.75 per hour)

Ouch!  Is that even a survivable wage in New York City?  How many Lisa Jongs would have to share an apartment there before they could actually afford the rent?  And, how long was Lisa Jong working at B&N after she revealed to New York Magazine that she was making almost 1/400 of her Riggio’s salary?

This juxtaposition does raise a question, however: shouldn’t people who write books, on average, make significantly more than clerks who check them out at a chain bookstore?

$0.02

My two cents?  If Regan had cut her own salary to 400 grand (which is what the lowest-paid publisher, Ann Godoff of Penguin, was reported to make in that same “Salary Guide”) and the remaining $600k was alloted to pay writers the average American income of roughly $40k, that would still only support fifteen authors.

So long as they did not live in New York City.

But, Regan’s now-defunct division of HarperCollins reportedly made $120 million per year in revenue.  Granted, ReganBooks was an usually profitable imprint, but if the company could spare 0.8 percent of that figure to pay one executive, wouldn’t it make good business sense to, say …

  • take a mere 5 percent cut in revenue,
  • freeing up millions of dollars for boosting royalties
  • so that dozens of writers could make a full-time wage
  • insuring that they can completely devote their time to providing the company with the content that keeps it afloat
  • rather than forcing them to scramble for time and energy around their day job (for example) as a minimum-wage clerk at Barnes & Noble?

Over 100 happier, more loyal writers, each with nearly 2000 extra hours every year to write.  That’s approaching a quarter of a million more writer-hours every year devoted to our hypothetical publisher having made a 5 percent (merely out of revenues, not total budget) investment.

And, with 100+ proven authors having all this free time to write and rewrite and polish their work (not to mention book-signings and other promotional activities), resources squandered on remainder-prone gambles and barely profitable writers can be salvaged by “winnowing” them away.

Not to mention the possibility absolute certainty of cannibalizing the profitable mid-lists of other, less-generous firms.   What’s the chance this would not result in a publisher recouping that 5 percent investment?

Sounds like a Henry-Ford style “hardheaded business decision.”

And, with writers making more, agents wouldn’t have to ask for a higher rate.  That’s just my two cents.

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One comment

  1. No wonder it is so difficult to find good stuff to read nowadays. The bookstores here are flooded with so much reprints I am reading blogs. Interestingly, the plots of the free stuff I find is a lot more new and fresh than the ones sold in the bookstores. Great article.

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