Economist, Author, Futurist and Leading Keynote Speaker
In Economorphics, Linda Nazareth offers a guidebook to changes in the way the world works and the ways that you can make them work for you.
In Economorphics, Linda Nazareth offers a guidebook to changes in the way the world works and the ways that you can make them work for you.
Read Linda’s analysis of the day’s important economic and political events on her blog!
If I had to think of an industry prone to poisonous industrial relations battles I would probably think first or the auto sector, or maybe even something like education or health. The battles in those industries, however, are apparently being matched by orchestras (can I say ‘in the orchestra industry’?) across North America. Like many people, I tend to think of the music industry as full of a few superstars and many starving artists, but as it turns out that is not quite the full picture. Orchestras, as it turns out, have long been a unionized sector, and like other unionized sectors they are facing changing times a tumultuous period of restructuring.
Orchestras are actually a fascinating sector, albeit fascinating like watching a train wreck. Over the past few years, a host of North American symphonies have faced bankruptcies and closures (those in Louisville, Honolulu and London, Ontario are examples), long strikes and lockouts (notably affecting orchestras in Philadelphia and Pittsburgh this year) and deficits (the New York Philharmonic and the Toronto Symphony Orchestra come to mind but there are actually too many to list). They play pretty music, but they are actually going through ugly times.
Not surprisingly, much of the source of strife in the orchestra sector is happening because of money issues. Like firefighters and autoworkers, orchestras are finding that the non-profits that have long employed them no longer have the means or the desire to pay for what had been long-held contracts. In Pittsburgh, for example, players have been making a base rate of $107,000, which is something over $51 an hour not including benefits, which is in contrast to an what the Bureau of Labor Statistics says was an average wage in Pittsburgh of little over $22 an hour as of 2015. The current dispute centers around a plan to cut musicians’ salaries by 15 percent, and as well to freeze their pensions and to reduce the size of the ensemble.
Some argue that the market for musicians is intrinsically different than say the market for retail workers. If you ‘let the market decide’ on the level of salaries, goes the argument, you would not get you the best musicians. That is, the salaries for retail workers might be low since there are so many people willing to do the work, and since the job is simple enough that there is no shortage of qualified people. There may be lots of unemployed musicians, but if you let them outbid each other to work cheap, you might not get the ‘best’ ones. And $100,000 there is a different pool available than there might be at $30,000, or at a ‘pay by the gig’ agreement.
There is some merit to this view. For one thing, I would argue that at the higher salary, you are not only choosing different workers, but as well guarding against the turnover that would inevitably happen if you hired at a lower or a gig rate. It would only make economic sense for musicians to migrate towards better paying short term gigs if they did not have security and a decent salary. Whether that decent salary should be above what a nurse gets paid (which in Pittsburgh is $25.84 an hour according to payscale.com) is up for debate, however. And, the overriding trend in the labor market is to ‘gigify’ even the most traditional of jobs, which means the musicians are fighting a bit of a losing battle.
The bigger question really is what the correct industry model should be for orchestras. Should they be considered a public good, and therefore pretty much paid for by the state as they are in Europe? Or should they be left to sell tickets to pay their costs? That one is a bit of a non-starter if you want orchestras to survive, since virtually none are able to do so without outside support. According to a report by the League of American Orchestras, detailed in this story from The New York Times, as of 2013 (the last year for which data is available) orchestras had reached a ‘tipping point’ where they now rely more on philanthropy than ticket sales to generate revenue. Of course, private sector philanthropy rather than government grants could theoretically work, although there are far more demands for revenue from arts organizations than there is money to go around.
In my reading of it, orchestras actually should be a growth industry and the well managed ones could face a bright period ahead. Think about the major changes we are seeing as an economy and as a society. One of the biggest ones, to me, is the retirement of the baby boomers which will give a lot of people nothing but time – and those with time have time for music.
Boomers, retired or not, are now searching for ways to give their lives more meaning. Getting involved in hobbies, and in particular in music is a natural way for them to do that. Baby boomers also want to be on boards or to do meaningful volunteer work, and to have some input into organizations that interest them. If orchestras can help them to do that, then the the next step for them is to get them to write checks. Rich boomers can write big checks and poorer ones can write small ones or buy tickets. The trick is to tell them what is available and make it accessible to them. Savvy orchestras have already increased the size of their marketing departments and community outreach programs in order to reach this market.
The existence of cultural institutions is also an important consideration as baby boomers think about where they want to live once they retire. When listing what they want close to them, many cite proximity to cultural and entertainment venues as a consideration. Florida, the haven for many pre-boomer retirees and in a way of model of how many communities will evolve, is actually a hub of small orchestras. Communities that want to attract or retain boomers would do well to retain their orchestras as well.
Even with higher demand ahead, the path for orchestra musicians is unlikely to be a smooth one. The economic future we are facing is one where many will go from gig to gig, and where job security is not a given for anyone. Musicians outside of the orchestra sector know what that career path looks like better than anyone. Perhaps they could give some coping lessons both to their colleagues and to the labor force at large.
Collaboration, sharing ideas, boosting creativity, creating bonds – all of these are reasons that are typically given for having open plan workspaces. Sit next to your colleagues in an open plan office or cubicle, goes the reasoning, and productivity will rise. Not so, says new analysis by researchers at the University of Auckland in New Zealand. In fact, as chronicled in this piece for the World Economic Forum things may be so bad in an open plan office that you are really better ‘working remotely with your cat for company’. Ouch.
For many of us, the open plan model has existed for pretty much as long as we have been in the workplace. Once upon a time (if you believe the scenario presented in shows like Mad Men which take place forty or fifty years ago), even fairly junior employees got actual offices with walls and doors and secretaries that sat outside them. Quaint. These days, the reality for the majority of office workers, even up to high middle management, is that you get some form of cubicle, or maybe a desk in an open plan office. ‘Hot desking’ – not having your ‘own’ desk with a space to put your kids’ pictures on or a drawer in which to stash your shoes in the winter – is also quite the trend these days. The reasoning is that we-are-all-friends-here and that it is more efficient to just grab whatever desk is available than to have designated spots for everyone.
The Auckland University researchers found a long laundry list of ‘employee social liabilities’ faced by those working in collaborative spaces. Distractions obviously topped the list, but as well working in close physical proximity to others apparently also results in distrust and negative relationships. If you work close to someone you are apparently less likely to be friends with them, and you are more likely to think you are being well supervised by the manager who also works in proximity. As for the idea of free and creative flow of ideas, that was not borne out by the data either.
The findings, which were based on a survey of 1,000 working Australians, are interesting and well worth pondering. These days, companies are struggling with how much to let employees work off-site as compared to in the office. For some workplaces everyone has to be present every day, but that is not always the case. Still, even when technology allows people to work elsewhere, there is often a deep distrust that they are going to get enough done. Out of sight of their supervisors, goes the theory, and they are probably cruising the internet or hanging out at Starbucks. The reality, however, is that they may be getting more done than if they were at work in their cozy little cubicle web. Having their own offices, working with just one or two others, or working from home apparently produce more and better work than being in open plan offices.
No one is arguing that workers should never see each other or that they get more done if they spend most of their time isolated from one another. Many studies have shown that a bit of contact, whether in meeting rooms or around the photocopy machines, can yield great benefits. That is the real argument against allowing people to work from home although clearly there is room for something middle ground between the all-or-nothing model. Given that forcing everyone to hang together when they are at the office is apparently not yielding a lot of economic benefits, the researchers suggest that noise-cancelling headphones or walls of plants may be a good idea for some offices. As well, some simple courtesy towards co-workers might not go amiss.
It is an important thing for companies to get right. In the current economy, there is a huge need for productivity gains, as well as for keeping costs lean. That could mean cutting down on office space and shoving everyone together, or it could mean letting people work from home more frequently. It could even mean putting up some walls, with the acknowledgement that sometimes good fences do indeed make good neighbors.
Sure you can go for a run for free, but if you did you would be off trend. That is one take-away from some new statistics on where people are spending their fitness dollars. According to this article from Quartz (which quotes data from the International, Health, Racquet and Sportsclub Association, U.S. attendance at specialty gyms is on a tear. Money spent at fancy gyms like SoulCycle and Crossfit grew by 70 percent between 2012 and 2015, and those kinds of facilities now make up 35 percent of the fitness market. It is a pricy way to get fit, but then again the gyms as selling more than just fitness.
Any gym sells an experience, and that in itself is a good retail strategy. It has long been clear that people are open to paying for ‘experiences’ rather than things. Some of this might have to do with the move to not create ‘clutter’, which is a significant consideration given the popularity of books by people such as Marie Kondo. Beyond that, however, it seems that buying an experience just makes people happier, a finding that was borne out by recent research from San Francisco University. Travelling, playing golf, enrolling in an art class, going to a concert – all can make people more satisfied than they would be if they bought things at a mall.
Partly this is because of the social aspect of the experiences. If you buy a shirt for $80, you get the shirt. If you buy a ticket for that amount, you get the experience you paid for (hearing the music at the concert or whatever) plus the experience of being in a lovely concert hall with other people who enjoy the same music you do, whether that means the people you came with or the just other audience members. Selling a ‘luxury’ experience along with a good typically means you can charge more as well, something that Starbucks knows only too well. Yes, your latte may cost $4, but with it comes the chance to sit in a nice environment and work or socialize if you want.
The high end gyms do indeed sell a luxury experience, and if you walk into a yoga studio after having been used to a chain fitness membership, the difference in price can be stunning. As opposed to a big fitness chain that sells annual memberships at a relatively low monthly cost, high end fitness centers often charge by the class. As Quartz points out, that means that they are selling to people who are actually taking classes, rather than those who paid for a membership they may never use.
So why are people willing to pay so much? Partly because they get nice facilities and a nice product as their experience. They also get a sense of ‘belonging’ or ‘community’ something that is apparently absent from many people’s lives these days in North America. Crossfit is a great example of this. Working at a large company, I once saw one guy come up to another he had never met and say ‘I hear you’re a Crossfitter – I am too.’ It was an instant connection, as if they both had kids in the same class or maybe were Trekkies. Being a ‘Crossfitter’ is a bragging right, and is something that is bought along with the hefty price of attending classes.
As well as the social aspects of the gym experience, I would add that the boom in high ending gyms has a lot to do with economic trends as well. These days, one of the clearest retail trends is the split between luxury and economy. At the top end, Burberry and LVMH keep posting strong results, while at the bottom Walmart keeps prices low because their consumers are struggling to make ends meet eight years after the recession officially ended. So yes, gyms are a part of that trends. Towel service, nice toiletries, spa-like surroundings – these are all nice to have, and those who can afford them are apparently happy to pay for them.
If I had to think of an industry prone to poisonous industrial relations battles I would probably think first or the auto sector, or maybe even something like education or health. The battles in those industries, however, are apparently being matched by orchestras (can I say ‘in the orchestra industry’?) across North America. Like many […]
Collaboration, sharing ideas, boosting creativity, creating bonds – all of these are reasons that are typically given for having open plan workspaces. Sit next to your colleagues in an open plan office or cubicle, goes the reasoning, and productivity will rise. Not so, says new analysis by researchers at the University of Auckland in New […]