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A Bad Idea In Any Economic Environment

The Minneapolis Star Tribune published an article on 9/7/2012 by Graydon Royce that reports details from a revised St. Paul Chamber Orchestra (SPCO) proposal. Although it appears that both sides seem to sauntering toward some middle ground, one aspect of the latest SPCO proposal jumps out in that they want to create a two tier pay system for musicians: $62.5k/yr for existing members and $50k/yr for incoming musicians.

Creating a caste system within employment tiers is a sure fire way to increase inter-office conflict, reduce efficiency, and bring morale down to all time lows. And to be clear here, it’s a bad idea for all employees, not just musicians.

Musicians, especially younger professionals, should be paying very close attention to this negotiation and whether or not the SPCO musicians accept that part of the proposal. Ask yourself this: would you want to have the same set of responsibilities and expectations as someone sitting next to you but earn 20 percent less? So much for solidarity.

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In case you’re thinking compensation caste systems don’t already exist inside musician collective bargaining agreements, think again.

The most common occurrence is pay scales for substitute musicians; in some orchestras, they earn less per service than rostered musicians although once again, they are held to the same artistic expectations. Keep in mind, that’s merely a dollar for dollar comparison and doesn’t take into consideration benefits received by the latter.

Another segment were compensation caste systems are beginning to take root between contracted musicians in the same ensemble is in retirement benefits. A handful of groups amid pension plan migrations (usually away from a defined benefit to a defined contribution) approved by musicians and management via the master agreement are grandfathering existing members to the previous plan while incoming members must adopt the latter, which provides a much smaller retirement benefit.

I’m just beginning to encounter this scenario via the individual overscale negotiation counsel that is part of my consulting work. It’s been routinely sticky work but preparing clients on how to negotiate overscale terms that address this discrepancy and level the compensation playing field is paying off. In a perfect world, this will become unnecessary by way of attrition but the world is far from perfect and in the meantime, we deal with what exists.

In the end, it would be better for all stakeholders if the entire field rejected the notion of compensation caste systems (meaning different pay for identical duties, responsibilities, expectations, and accountability) and one of the first steps toward achieving that goal is to get it out of closed door discussions and begin talking about it in the open. So what do you think?

17 Responses to A Bad Idea In Any Economic Environment

  1. CA September 13, 2012 at 5:51 am #

    Interesting….I’m a staffer and I see this happen all the time with admin staff: the new people coming in, regardless of their experience or maturity, are very frequently paid less than the people they are replacing. It’s what some businesses do, though it is not stated up front, a kind of caste system does exist, in some ways. That said, however, for an orchestra and in an industry where routinely the talent level goes up up up with the new college grads coming out all the time, this simply says to them: hey, you’re not worth it, we value you less. Go find a job with a “lesser” group.

  2. Chris Blair September 13, 2012 at 8:11 am #

    I do think there is room for coexistance between honoring promises made in the past to long time players (pay and defined retirement benefits) and promises looking forward with new hires. Accepting employment terms is a choice. Those that don’t like the terms may choose to look elsewhere. Is this an ideal situation? No. Are we living in ideal times, economically? Again, no. Defined retirement benefits are a particularly risky notion for all labor intensive organizations unless one has a financial Ouija Board that can predict such things as the Tech Bubble, Housing Bubble, and onset of future Consumer Credit and Education Loan Bubbles, not to mention health care insurance cost uncertainties. That an organization is considering honoring those promises made in the past (as opposed to dumping them entirely, as seen elsewhere), I view as admirable.

    • Drew McManus September 13, 2012 at 9:04 am #

      This is a good example for where these issues becoming increasingly difficult in that the commitment to past promises is certainly the prescribed course of action but going cold turkey, so to speak, on these changes as opposed to a prescribed transition period (meaning years in length).

      At the same time, the entire defined benefit vs. defined contribution conversation and the costs and merits of each are worth numerous discussions in and of themselves; especially with regard to how they are structured vis-a-vis risk.

      • Jonathan Gresl September 17, 2012 at 12:32 am #

        I hope, Drew, that you can find time to write something about different retirement systems because this is becoming a large debate in all sectors of the economy. It seems clear to me (as a total non-expert) that whatever risks are involved in defined benefit plans are only increased in a defined contribution one. Since the individual has several large disadvantages as an investor vs. an employer or group of employers.

  3. Eric Edberg September 13, 2012 at 8:26 am #

    There is a parallel issue in academia, where institutions make increasing use of part-time faculty members, and, no matter how fine a job they do, make sure that their individual on-paper responsibilities don’t add up to enough hours per week that they become “benefits eligible.” The part-time salary for teaching a course is much less than the equivalent portion of a full-time professor’s salary. And yet there are, almost always, plenty of well-qualified applicants for these positions, given the market, and that for many people new to the field, part-time work builds the resumes and makes them more attractive candidates for full-time, tenure-track positions.

    It used to baffle me, 20+ years ago, that I was teaching as well, performing as well, and serving on more committees than many senior colleagues who were paid more than twice what I was. (My institution uses a seniority system for salaries.) And that’s in a full-time, tenure-track, then tenured, position. Now, closer to the higher end of the pay scale, I see it as a kind of deferred-compensation system–I’m finally getting some more compensation for all that overwork when I had small children and could barely make ends meet.

    The two-tiered system for orchestras, which presents all the dangers you articulate, Drew, strikes me as intended to be step in the direction of an overall lower salary scale for everyone. For various reasons, salaries of existing musicians can’t be cut, so those salaries stay until those people retire, and as years go by, you have more and more people at the lower salaries.

    And so much comes down, in the end, to market forces. I have a former student who plays in regional part-time orchestras and has also made it onto the first-call sub lists for two midwestern major orchestras. He’s happy to be making more money subbing in them (well, one is locked out at the moment) than he does in the smaller, lower-paying orchestras. That the full-time people are making more than he is appears to be less of an issue than the fact that he is making more than he would without that work. The experience he’s gaining he hopes will lead to a full-time position.

    Would he, and other fine young musicians like him, accept a second-tier full-time salary? Probably. It would beat his current situation.

    I’m not arguing that underpaying subs and multiple-tier salary scales are good ideas for the morale of the players and other employees. I do see, though, why board members and administrators trying to figure out how to make things work financially find these to be attractive solutions, as long as there are terrific players who will take the work.

    • Rob Simonds September 13, 2012 at 7:45 pm #

      Paul,
      Where I believe you are right is in terms of subs. As orchestras lose members in their CBAs, subs act as a transfusion. In my last job we were forced to accept a contract that held many open chairs and subs now play a more important role within the institution. For the largest orchestras that are far and away the best gigs in town, a lower sub rate is still probably manageable. But for smaller ICSOM orchestras whose current sub rate may not be the best pay in town, they might need to consider equalizing it.

      But the pay differences between different levels of title chairs, doubling and section players is different pay for different work and not an arbitrary multi-tiered system.

      I have worked for an institution with an arbitrary multi-tiered system. And when I left that job and moved up, it wasn’t primarily the pay that made it feel more professional, but that all the players were on the same team and nobody was a second class citizen. It was an orchestra for everyone and a gig for no one.

      A masters degree might not mean that one is a better teacher but it means something. I’m not an academic but I understand how administrators looking to hire teachers need easily digestible criteria on whom is more qualified. For better or worse, more education for an educator makes sense.

      A 20 year veteran in the classroom might be doing the same job but they aren’t doing it the same way. Even if one believes that youthful enthusiasm beats experience, it is a tough argument to make that classroom management is something that a first year teacher possesses.

      In a profession like Orchestra Musician where upward mobility is not an option, as most workers understand it, some kind of seniority pay system makes sense. Players might not absorb experience at the same rate, but experience happens and it means something. Institutional knowledge means something. The exchange rate between experience and seniority pay might only pay at one rate, but a few bucks a week seems like small price to pay.

      The 5-6 year mark for seniority pay might seem arbitrary, but to me it’s like waiting until you are 16 to drive or 18 to vote. It might not be the perfect number for everyone but it is in the ballpark.

      Schools may turn out plenty of good players every year, but without a time machine they can’t turn out players with experience. And I mean both playing experience but also professional workplace experience.

      One of the things that I find most troubling about many of the commentators in our profession (not you Paul, I am an admirer of your work) is their worldview is the same as mine was as a first year player. Many of my ignorant assumptions and the stupid things I said out-loud early in my career that make me cringe now are the same things some get paid well to preach about as consultants.

      Rob

      • Chris Blair September 13, 2012 at 8:29 pm #

        Lots of interesting and important thinking going on about this issue. If one were to make an argument for differential compensation it might be in the concept of “institutional memory” and passing this history and practice along as a mentor to new hires. This experience may be worth the differential discussed in the SPCO discussions.

        • Leslie Shank November 4, 2012 at 9:34 pm #

          For the record, the musicians of the SPCO unanimously rejected the managements’ proposal on October 31st. Not only would a buy out of 16 players over the age not be a practical solution to budget problems, we recognize the value in having new talent mixed with the experienced players to create the sound that we have today. In addition, they want the right to change the size and complement of the orchestra on an ongoing basis, so if someone doesn’t take the retirement package, they could still be in jeopardy of losing their job with a severance of $100,000 and six months notice. This, of course, would be the same for new players in the future. We could not allow this proposal to destroy our orchestra.
          Now, they have cancelled concerts through December 31st. We have scheduled talks for November 8th, so stay tuned.
          Leslie Shank, SPCO violinist and member of the negotiating committee

  4. hvs September 13, 2012 at 9:12 am #

    Aside from the effects such a policy may have on new hires, the ‘stealth’ effect of this policy may negatively impact the senior members. By being suddenly being set up at a higher scale, the ‘old guard’ may be placing a nice bulls-eye on their backs for buy-outs, retirement incentives or artistic review procedures. If you can get rid of the ‘old guard’, bring in ‘new blood’ and save 25% in the process, what bottom-line driven Board/Management wouldn’t be tempted by that!!

    • Tamara September 14, 2012 at 1:24 pm #

      Exactly. Danger, Will Robinson!

  5. Paul Helfrich September 13, 2012 at 11:00 am #

    I’m not sure this is really that big a deal…between different rates for principals, assistant principals, section players, seniority pay, substitute pay, and doubling, orchestras are often like an airline where everyone on the plane has paid a different price for their seat, and it’s just the way it is.

    And seniority pay, I believe, has historically been driven by the union rather than management. It presents the same issues as a multi-tiered system conceived by management, in that someone who has been in a chair for 5-6 years is not automatically doing a better job, nor do they have greater responsibilities, than the new hire who just sat down next to them.

    It’s like the teaching profession – getting a Master’s degree does not guarantee that you’re a better teacher, but it will get you higher pay, almost certainly. And at the end of the day the 20 year veteran still has basically the same job as a teacher in their first day in the classroom, but there’s going to be a big pay difference.

    I think each orchestra, through the bargaining process, has to decide what works best, or at the very least what’s tolerable, in their situation.

    • Drew McManus September 13, 2012 at 11:10 am #

      Those are good observations Paul and I was hoping someone would mention those items. Yes, seniority pay, overscale, principal scale etc. are all common but the difference is they apply equally to all members. For example, the seniority pay rates are the same for anyone who reaches the respective threshold.

      If applied to that example, the two tier system would be something like Musician A gets 10% seniority bump after 10 years of service but Musician B (who joins the group next year) only gets a 5% bump after 10 years of service.

      The same thing can be applied to fixed principal scales as well and as for overscale, although the latter isn’t guaranteed in the sense that it is ultimately management who decides whether or not to pay it. If nothing else, perhaps the whole overscale issue is one worth exploring sometime.

      So in a nutshell, while muti-tier payments certainly exist, they are still applied equally to all members whereas the system in the SPCO’s current proposal creates a pay scale that grants some members a better scale than others for the same work, duties, and responsibilities.

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