The Mises Institute monthly, free with membership
Volume 15, Number 7
Strike Up the Band
The 5th Street Theater in Seattle, Washington, is one of a dwindling number of houses of its
kind. It receives no government money whatsoever. Its revenues come from a permanent
endowment and ticket sales to its popular, if small-scale shows. Its charter prevents it from
raising money from other private sources. It keeps a low profile in the arts community, but its
staff is as loyal and dedicated as its steady stream of patrons.
Like everyone who uses live music for commercial purposes in the Seattle area, the 5th
Theater is forced by labor union rules to pay excessively high wages ($98 per show) as compared
with what they would be in a competitive environment. And yet, the union complained, these
wages were below those in San Francisco ($132) and Los Angeles ($125), where music
performance is also dominated by unions.
On that basis, the local division of the American Federation of Musicians threatened a strike.
Demanding, but failing to get, a 20 percent pay raise, the musicians union staged a walkout at the
worst possible time: the opening night of the theater's new production of "Beauty and the Beast."
What could the theater management do but send ticket holders home deeply disappointed?
Instead, the management decided to take a risk, for the sake of its credibility with an
always-faithful audience. It permanently replaced the striking musicians with 18 new, non-union
musicians who agreed to perform at the market rate, and set the date for the new opening night.
This was immediately seized upon by the labor union as an evil attempt to employ a "scab
band"--the union's phrase--and it set out to terrorize the musicians, the management, and the
audience. On the new opening night, 1,000 strikers showed up to picket and intimidate these
"scabs," who had to hide their identities to avoid personal retaliation.
The protesters included not only local union musicians but members of machinist and
unions and other assorted thugs in the region. In the midst of the hollering and hysteria, the
theater canceled after it received a bomb threat. A week later, the protesters grew to 1,400 as the
word spread throughout the labor movement.
After having its name dragged through the mud by the pro-union media, the 5th Street
fired the replacement musicians and put union members in the orchestra pit at the higher wages.
As a result, this humble theater has entered the ranks of all the other cash-strapped houses around
the country. It is worried about its financial future, and, like all the others, will have to make
cutbacks in order to make ends meet.
As this example shows, to the extent that the musicians unions are successful, they restrict,
broaden, the opportunities people have to hear great music. For the consumers of music and the
employers of musicians, music unions care nothing. The chief end of the unions is to increase
power and compensation for its members so that the dues will keep pouring in and wages--for
those few lucky enough to have a job--can remain artificially high.
And look what these "oppressed" union members were willing to do to maintain their market
position: throw fellow musicians out of work, deny consumers a product they paid for, drive
employers into financial ruin, and even blow up a building filled with music lovers. So much for
music soothing the savage breast.
This is hardly a unique example. Musicians unions--which are sustained and fed by
privilege--have long had a deleterious effect on the market for live music performance. This is
taking a heavy toll on the economic health of the American orchestra. A glut of performers is
fighting for a limited number of orchestra positions even while orchestras fail every year (San
Diego and Sacramento most recently) and strikes occur about once per quarter.
In the fall of 1996 alone, employees of major symphonies from Philadelphia, Atlanta, and
Francisco struck, lobbying for increased compensation and putting these organizations in greater
financial trouble. Predictably, this has also put audience loyalty to the test. Who wants to hear a
symphony that is so anxious not to perform?
It's not as if those with professional positions are suffering. The starting salary at the
Philadelphia Symphony is $78,000 per year, with guaranteed raises, pensions, and annuity. At
San Francisco, the average wage and benefit package is $112,493, plus 10 weeks paid vacation.
And this doesn't include the vast opportunities members have to supplement their salaries by
teaching and performing in other groups.
As wages and benefits for musicians increase, orchestras find it harder and harder to stay
During the past year, the city of San Diego found this out when its symphony was forced to close
its doors for good. It could be the first of many. As the financial deficits mount, the number of
orchestras dwindles and the number of concerts falls as well.
The most recent victim of subsidized musical unionism was the Sacramento Symphony. As
unions extracted higher salaries in the 1980s, the orchestra began to suffer losses, and by 1992 it
was forced to declare bankruptcy and renegotiate a labor agreement, albeit one with wage
increases. Wage cuts finally came in 1994, but two years later it was clear that it wasn't enough.
That's when the union balked. "You can't turn us into nonprofessionals," declared a violinist and
union steward. So the symphony closes permanently, leaving Sacramento music lovers humming
"Another One Bites the Dust."
The same trend applies to recorded music. Musicians unions have pushed successfully for
increased recording fees for American orchestras who perform on compact discs. This has
resulted in American orchestral performers pricing themselves out of the recording market.
In November of last year, the Philadelphia Symphony settled a lengthy strike brought on by
loss of the orchestra's recording contract. This led management to deny musicians their promised
recording income. If unions continue to demand overly high recording fees, we'll see more of the
American orchestras are not recorded as frequently as they once were. The Naxos record
company, which features excellent quality at low prices, has recorded only one, the now-defunct
San Diego Symphony. Instead, they draw on overseas talent because European musicians have
not priced themselves out of the market.
American union recording contracts also stipulate that if a group from an orchestra records a
work, the entire orchestra must be compensated, not only those who are on the record. It is ironic
that in order for the American masses to hear great music on records, they must listen to
While government-privileged unions are working to restrict competition and opportunities,
government subsidies prop up union wages. From its beginning, the National Endowment for the
Arts served as the cash cow of the music unions. My own survey of witness testimony before
Congressional committees during the 1965 authorization reveals that the most often cited
justification for intervention--taking art to the masses--was merely a cover for union
Performers unions, both musical and dramatic, pushed for stipulations in the law so that
money would be granted to only union orchestras and theater groups. Snide remarks were
common as witnesses derided the music making of "amateur" groups from every region of the
country. These aren't really artists, they said, so they should be supplanted by the
"professionals," that is, union members.
Union leaders knew that if only groups employing union performers receive government
subsidies, then more wealth and power would come their way. Today the culture of grant-giving
foundations and agencies is pervaded by a pro-union bias, and it's the unions that have the power
to pick the winners and losers in the musical marketplace.
The government distorts resource allocation wherever it intervenes, causing economic
in the music industry just as in every other. Government subsidies, for example, help prop up
bloated administrative staffs in organizations on the NEA payroll. This results in higher orchestra
budgets, but also financial troubles down the line that seem to make more subsidies necessary.
Similar distortions appear in the market for government-subsidized musical training. It
people who would otherwise not be able to afford a music education to devote their lives to
preparation. Many, no doubt, enter the field in hopes of landing a job at one of the organizations
in favor with the bureaucrats at the NEA.
But this has led to an unfortunate glut of musicians. The American Record
Guide reports that
there are currently 82,795 music majors enrolled in American colleges and universities. In 1995,
12,827 music degrees were awarded. But thanks to a conspiracy of government and unions, there
are only about 6,500 orchestra positions in the United States, only a few of which become vacant
Meanwhile, there are 8,400 college-level music faculty positions in the United States, again
only a few openings each year. Given the present supply and demand conditions, the market
for even a highly trained musician should be much lower than it is, but the unions have been very
successful in keeping wages high enough so that such a glut persists.
The majority of musicians, then, cannot earn a living in their trained field and seek the
of the government for their sustenance, not understanding that it was the government that helped
create the mess in the first place. Many frustrated musicians become bitter liberals cursing the
free market, even though the government is the real source of their troubles.
Government intervention in the market for music--subsidizing union-dominated arts
organizations, providing legal legitimacy to union restrictionism and terror tactics, and causing
market dislocations through educational subsidies--has been bad for the arts, bad for music
patrons, and bad for taxpayers. What's best for all goods and services is best for music and the
arts too: the government should let the market alone.
Shawn Ritenour teaches Economics at Southwestern Baptist University and is also a scholarship student. He has written on this subject in The Wall Street JournaL