The Classical Music Fiscal Cliff—Part I

Photo by tropical.pete via flickr

Our country is quickly approaching another fiscal cliff.  Yikes.  When I hear those words, I always imagine a movie from the 1930’s, the hero—dangling by mere fingertips—tries to avoid her imminent demise, all while the villain laughs mercilessly as the scene plays out.  Fortunately, 100% of the time, the hero miraculously claws her way out of the situation, completely averting danger.  Translate that to our current situation in congress and I think we might actually have a dialogue in the coming weeks that’s productive. (This coming from the eternal optimist.)

I’ve been thinking about our nation’s financial situation and, more importantly, about those of us trying to carve out a living in the arts.  While it’s disappointing, I’m not surprised to see the number of 52 week orchestras shrinking, or facing contract negotiations that greatly reduce base salaries.  In the world of classical music, I think it’s safe to say that we’re in the middle of a edge-of-our-seat fiscal cliffhanger.

Here is the classical music fiscal cliff as I see it.  We have an over-saturation of highly trained, highly qualified artists in the marketplace and a society that is largely disinterested in the art-form in its current state. What’s further, a large majority of our society isn’t discerning enough to hear a difference between a professional or amateur ensemble, drastically driving down the demand for professional classical music.  Harsh as it sounds, it’s true.

One big issue institutions of higher learning need to tackle is how to help students realize the market value of their services.  I’m not suggesting that we place a financial judgement on artistic intent.  That will get us nowhere.  What I am suggesting is that we have a real discussion with students majoring in music about the value their artistic work brings to a community.  If explained properly, I see unlimited potential for success.

Baumol’s Cost Disease
Before we go into some proposed answers, I’d like to point out a theory that may get us to the heart of the matter.  William J. Baumol’s Cost Disease argues that, as efficiencies are found through automation, productivity goes up. The more we automate, the less people are needed to do the work. Computers and robots help the manufacturing sector become more efficient and, by extension, more profitable.  In exchange for automated efficiencies, less workers are needed in those sectors of our economy, driving up the market value of each employee.

The upside here is that companies can produce goods in mass at a incredibly reduced rate, allowing consumers to purchase items like coffee machines and clothing for far less than pre-automation. In addition, companies enjoy higher profitability through automation, and with fewer employees, workers can actually be paid at a higher rate.  The downside is that automation displaces many employees and leaves them looking for work in other sectors.

So, what happens to those workers displaced by industries which can be automated?

Well, the short answer is that we increase—and further saturate—populations of workers in service oriented sectors of our economy that can not be automated, including education, hospitality, retail, medicine, and yes, classical music.

Some of these sectors are staples for a functioning society (education, medicine) so a premium is placed on their services.  Doctors are needed for quality of life to remain the same, so we compensate them handsomely.  Why?  Doctors can’t automate, but they have a highly specialized skill set that is a necessary for our society to function and advance.  Even though doctors can’t be made more efficient through automation, we compensate them at a rate that is competitive with our friends in automated sectors so they will keep practicing medicine.

You might be thinking, “Wait a second, I’m a classical musician and I’m highly specialized, therefore I should be making a lot more money.” In truth, you are more specialized than most of your peers.  Think about it, you’ve probably been playing your instrument for over half your life and for several hours a day.  That’s a big deal!  Here’s where it gets real.  For the most part, we’re viewed as non-essential for a functioning society.

Our type of non-essential, non-automated, specialized work is deemed a luxury. (If you don’t believe me, simply price out two tickets for most major orchestras around the country.)  Here’s why: Mozart’s Symphony number 40 requires the same number of musicians now as it did when the piece was written in 1788.  You can’t become more efficient because any change or reduction in instrumentation would result in compromising Mozart’s artistic intent.  In this light, our productivity has not changed in over two-hundred years, however, our cost of living has risen dramatically, greatly driving up costs.

Under normal circumstances, higher saturation in the marketplace within the same trade equals less pay for services rendered. Thanks to the union, we have been able to negotiate a fair living wage for musicians in orchestras across the country, effectively combating the notion of over-saturation and non-essential qualities of our work.  This makes orchestras incredibly expensive businesses to run.  (What company can you think of where over 100 of the employee’s make a manager’s level salary, or above.)  Under our current system, this compensation is necessary.  Everyone in the group is a specialist and higher wages are needed to keep the most talented musicians from going elsewhere.  It’s also causing a severe financial hardship on orchestras across the country.

This is where we find our fiscal cliff.  On one hand, Classical musicians have a right to a fair wage in order to make ends meet.  On the other, organizational leaders have a responsibility to look at the fair market value of each musician’s work in the spirit of long-term stability for the organization.  In truth, both sides are right.  The question is—like our leaders in Washington—how will we come together to solve this problem?

Stay tuned for some proposed answers.

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