Symphony Musicians and Symphony Orchestras

Symphony Musicians and Symphony Orchestras

2008Working Paper No. 1989

This paper investigates the extent to which the economic challenges faced by symphony orchestras in the United States reflect collectively bargained wage increases and work rules. Since the late 1960s, collective bargaining agreements have transformed the artistic expenses of orchestras from variable to fixed costs by providing both wage and employment guarantees. The resulting agreements limit the ability of orchestras to adjust labor costs in the face of financial challenges, and the paper presents econometric evidence indicating that musicians wages are not significantly correlated with measures of their orchestras financial balance. The paper discusses features of the nonprofit governance of symphony orchestras which reduces the bargaining resistance of orchestras to wage and employment security proposals.

Keywords
economics of organizations