Viewpoint: Higher taxes for the rich hurts classical musicians

By Danny Huizinga

Although some think the economy is improving, another crisis has arisen in various cities around the country.

Due to failed negotiations between musicians and management, many symphonies have officially canceled their concerts for the coming year.

One of the most notable occurrences of musicians on strike was the Detroit Symphony Orchestra strike, beginning in October 2010. The musicians finally returned to work in April 2011, after 26 weeks of not working. Although the musicians and management have finally reached an agreement, the adverse effects of the conflict will take much time to repair according to the musicians.

“Unquestionably the strike has led to an overall weakened financial condition, depleted subscriber base, and a hesitancy of a portion of the larger gift donor base in relation to the organization’s overall financial picture, that will take years to repair and recover from,” the symphony said in a statement.

One of the disputes on the other side of the labor-management spectrum is occurring in Atlanta, where management has locked out Atlanta musicians, cutting off their salaries and benefits.

Management blames the musicians for refusing to accept pay cuts, musicians blame management for the same reason.

Concerts have been canceled for the next month, possibly longer.

With the other orchestras around country also facing some of these tough decisions, it’s easy to worry that the orchestra industry will fade out of existence.

Fortunately, all hope is not lost.

Often, the prospect of bankruptcy can be a valuable step in the process of restructuring. In 2010, the Hawaii Symphony Orchestra (previously the Honolulu Symphony) faced an impending bankruptcy deadline amid stalled negotiations between musicians and management similar to the cases above.

Though restructuring failed at first, the symphony was bought out and contracts were set by new owners in April 2011. It was only through this difficult process that the orchestra was able to begin having concerts again.

How do we save the orchestras? There is no easy, universal answer.

In some cases, management is at fault and needs to be replaced. In other cases, the musicians are the ones blocking negotiations. It is up to the parties involved to determine a compromise.

Some of the best decisions are made under high pressure. Also relevant is the fact that we are still in a troubled economy. Even basic economic principles tell us that consumption of “luxury” goods such as concert tickets decreases dramatically with a drastic fall in personal income.

However, ticket sales only cover a part of the operating budget. Symphony orchestras such as the ones mentioned above are funded primarily by donations.

Continuing high taxes on “millionaires and billionaires,” a popular phrase heard often at the Democratic National Convention, could cause these donations to continue falling dramatically.

Orchestras are valued very dearly by their patrons and will not be given up easily. As long as we work toward a stronger economy for investors, these orchestras will remedy their problems and possibly flourish more than they have in the past. In fact, The Milwaukee Symphony Orchestra announced this Wednesday that it had reached a balanced budget.

There is still hope on the horizon.

Danny Huizinga is a senior Baylor Business Fellow from Chicago. He manages the political blog