Chicago’s basic wage will be $181,272
mainThat’s one outcome of this weekend’s deal that settled the Chicago Symphony strike:
Annual salary increases each year of 2%, 2%, 2.5%, 3.25%, 3.5% reaching an annual minimum base salary of $181,272 in the final year of the contract. This represents a 14% increase from the base salary for the 2017/18 season.
The other is that the musicians have given up their resistance to a less favorable pension settlement. New players will not receive the same benefits as old:
A phased transition of the retirement benefit from a Defined Benefit (DB) to a Defined Contribution (DC) plan beginning July 1, 2020, with an annual employer contribution valued at 7.5% of the base salary plus additional payments by the CSOA into each current musician’s account for the first three years of the plan based on the musician’s age and years of service. All new hires as of July 1, 2020 will go directly into the DC plan.
Concerts will resume next week.
So the old win, the young pay.
Always easiest to go the way of least resistance and.
Values are culture though…
It may be ugly, but this is how biz is done in the colonies. At least it’s over with for the time being.
It’s a big win for the musicians.
I’m glad they will still be playing their superb music.
The pay raise in the last offer the association gave three weeks ago, that was rejected overwhelmingly by the orchestra, was 2%, 2%, 2%, 2.5% 3%. But the last offer had the musicians’ defined contribution plan funded at 8%, and now it is down to 7.5%. So the gains the orchestra will make by the increased pay raise in the later years of this contract will be largely negated by the reduction in pension contributions. I understand there would be disputes among the musicians about either of these offers being satisfactory or not, but hard to fathom why the previous offer was rejected “overwhelmingly” yet this one, with very small differences, was accepted “unanimously”. Did no one perhaps point out to them the simple math on this before they voted?
This agreement vs the “last, best, final offer” made 3 weeks ago amounts to roughly $2,000 more per musician *over five years*, depending on market returns in the 403b (less if markets rise, more if stagnant or decline). Hope the strike was worth it for this extraordinarily marginal bottom line increase after all the bellowing about “gutting the pension.” Seems as though it was the salary that mattered most after all.
No. Game of attrition. The “unanimously” came after a long, tiresome fight.
Unfortunately the deeper pockets, i.e., the elites, always have the advantage to wait things out.
….perhaps misunderstood. The “elites” are the Trustees, who have always sponsored institutions of “high art”, which usually haven’t depended on the “magic of the market” for survival — the players are workers, even if relatively well paid ones. This destruction of DB pensions and the general movement against the majority of the workers in the USA has been going on for four decades. This is simply the case of its working its way from lowest to highest paid union members—the race to the bottom for all by attacking the weakest people first. (Non-union workers probably have zero DB pensions already.) One commenter here exhibits a lack of awareness of that mechanism by expressing resentment that until now some orchestral musicians have been able to avoid what has been already done to others in this country. It’s a race to the bottom, and of course shows up clearly in the stats on income inequality in the USA. Very sad mentality, but not surprising.
I’m left of center and pretty pro-labor as a rule. However, you have to realize that the peculiarities of the American orchestra system make it kind of silly to use the tried and true working class versus elite language. And it’s not just because $180k plus all the other payments is upper middle class in Chicago and might turn some people off. Hell, even the old pro sports mantra of “billionaires fighting with millionaires” doesn’t even work, and not just because a CSO musician is making far less than a Bear or Cub.
The reason it’s weird is because there’s not really any earned profit to fight about. It’s not like it’s a widget factory making vast sums that ownership is keeping to itself. Or like a pro sports team where everyone is being well compensated, but you can argue labor still isn’t getting its fair share. It’s probably closer to something like polo, curling, or women’s soccer where the labor is undoubtedly the best in the world at what they do, but if it was a pure, for-profit business, the salary would be about $60k-$70k. That number is a guess assuming the CSO like many of its peers earns about 30-40% of its current budget from ticket sales and a smidge from commercial recording and broadcasts. That also assumes you kill the education efforts and fundraising, and then streamline your administration accordingly.
So to understand the orchestra model with a sports analogy, imagine you had that curling team getting paid 60k, and then you decide to turn it into an untaxed nonprofit by adding a PE education component to get 501c3 status. Then you add staff who might love curling enough to work for less than they could make elsewhere (and maybe an overpaid executive or two if you want to argue that), and employ a staff of fundraisers to go to those elites in town and ask for some money because look at this PE program teaching curling to our kids, and “don’t you think it’s important our city have the best curling team in the nation?” Then you also apply for a few grants and a little government support, and bingo, that’s how you get to a $180k-plus salary.
But it’s not a case where its Nike employing sweatshop labor. It’s not like there are vast profits being squirreled away by a board. Because there are no profits. And that board is composed of people who pay money to the organization to sit there. All of the numbers are kind of made up and rely on what you think you can continue to get actual elites and little old ladies making small gifts beyond their subscription to keep giving you because they like you. That’s the weird model. So even as sympathetic sometimes-socialist… I have no idea what to make of how much anyone could and should get paid in a model that defies normal capitalistic business models. This one is a real outlier in the union v management debate.
No, the sports model certainly does not apply here.
I’m not saying how much any worker “should” get paid. My point is that unionized musicians in American orchestras, although, as you say, not workers in the for-profit sector, are still subject to the same trends as other lesser-paid workers. The deficits of these orchestras are paid out of the pockets of the wealthy members of the board because they like music and/or see the local orchestra as an important part of the fabric of their city and what makes it attractive in the eyes of their peers and part of the (mostly) professional class in the audience. In the words of one orchestra executive, it is a “civilizing influence” in their city.
They see, however, the phasing out of DB pensions in the rest of society and the businessmen on the board say to themselves, “Why shouldn’t we be doing the same with these employees? Why do we have this seemingly archaic pension model? We can rid our balance sheet of the liabilities, and still, even the best musicians will be happy to have this job. We can keep more of the ‘vast profits that we’ve been squirreling away in our for profit businesses’ [words of the previous poster, not mine].”
The irony is that of course these orchestras are non-profits and aren’t selling stock based on how their balance sheet looks or what their rate of profit is. In that way it does, as you say, defy for-profit business models. Nonetheless orchestral musicians (with few exceptions) are labor, even if unionized labor, even if the best orchestras are better paid than most workers relative to societal medians. They’re still subject to workplace trends, which have been going on for forty years and have been exacerbating income and wealth inequality and removing pillars of retirement security, like DB pensions, in the USA. That was my point.
Surely there’s no dispute that income inequality is worse in the USA than elsewhere AND that it has worsened in the past forty years, is there? I don’t have to post charts, do I? Please say “no.”
Adding to my post, I want to point out that the the same dollar amount added to the 401k contribution by the association would have had more worth than it being used to increase the salaries. As it is tax deferred, a given $100, for instance, would stay intact in a 401k account and grow, and if it is still remaining upon the death of the holder, would go (including interest) to his heirs most certainly without ever being taxed, as the estate tax threshold is very very high. But the same $100, put into a salary increase, would show up as only $60 (after fed and state tax, SS, medicare, union work dues). Whatever interest that $60 makes would also be taxed. So accepting the lowered DC contribution (it was 8% in the last offer, and is down to 7.5%) in return for a higher pay raise was a questionable move on the musicians’ part. I wonder if there was anybody to explain this to the musicians before they voted. Maybe they did, but it went over their heads?
An inherited 401(k) is absolutely taxable to the beneficiary upon distribution (for which there are various settlement options). The estate tax exclusion doesn’t change that. It’s called income in respect of a decedent (IRD).
Kyle – Sorry, you are right! I momentarily confused it with the fact that it is not taxable if you leave it in your bequest to a charitable organization. Such as the CSO! Senior moment on my part!
It would still have the benefit of being eventually taxed at a lower rate (given assumption that your income during retirement would be in a lower tax bracket) than if the same amount were part of your wages now.
True enough, though I have one, perhaps overly-pedantic, correction. A bequest implies “given through a will.” 401(k)s, IRAs, life insurance, etc. transfer via beneficiary designation, irrespective of other instructions (such as a will or trust). Therefore, a decedent’s 401(k) would not be taxable to anyone only given that the tax exempt organization is named as the beneficiary of the 401(k).
Perhaps some players need current salary to survive now, and tax deferral by sheltering income is not possible. Yes, it is expensive to have a “middle class” life, even if it’s not NYC, LA, SF, or Boston.
With all due respect, there are people who earn less then $ 181,272 per year. And yet, they somehow survive as well. In fact, with that money you belong easily to the top 10% in the United States. “Survive” does not seem to be the word you were looking for. Additional thought: this is the *base* salary. Last one of the second violins, freshly hired…
Another addition to my post. The negotiated higher raise in wages does not benefit the 30% or so of the titled players in the orchestra, as they negotiate their own salaries. But higher DC funding would have benefited 100% of the players. So, again, negotiating that down from 8% to 7.5% (of base salary) for everyone in return for higher wage increase for only 70% is a questionable trade-off. Someone should crunch the numbers to see exactly what the bottom line reveals, with also the tax implication aspect factored in.
As I said above, the difference is about $2,000 per musician over the five years in favor of the higher salary + lower DC % with conservative market returns, all other things being equal (meaning I did not include taxes). It would take an extraordinary 5-year return to make the higher DC% worth it during that period, but the difference is obviously negated over the longer term (depending on the next contract, of course). I’m sure the CSOA is saving the extra $2,000 in other cost-cutting measures that didn’t make the press, so it was probably a cost-neutral decision on their part. Higher absolute base salary won the day over “protecting the pension” for new hires.
If your calculations are correct that the difference per musician over the entire 5 years is only $2,000, it certainly makes the amount lost during the three additional weeks of strike not worth it. (The difference for the association may be even less, or they may actually benefit compared to their last offer if the factor I mentioned of only 70% of the musicians benefiting from the increased raises is considered, versus 100% of musicians who would have benefited from the 1/2% additional pension funding.)
However, let me go back on the tone of my posts here. Even if the musicians are in negative territory at the conclusion of these negotiations, it may still have been worth it for them to hold out for the pay increases they were finally able to wrangle. Because, in 5 years, they will have to go back to the table again, and with the wages that are in place, they are in a much stronger point to make further gains than if they had just decided on the bottom line, and quit the strike early and settled for a lower wage package. Meanwhile, despite the 7 week loss in wages being substantial, when spread out over, say, the next 10 years, it will amount to peanuts lost compared to the incalculable worth of having a high start-off point to negotiate.
Titled players negotiate over scale above the base salary.
Just a question: do we know those negotiated salaries are not a percentage above scale?
There is no universe in which this was a win. The messaging all along was “we’re doing this to save the DB pension for everyone” and they didn’t do that. Whatever extra raise they got is easily lost in the strike. I think both sides realized it was a mistake to take it this far, and used the Mayor mediation and this deal as a way for both to get out and save face.
Huge win for management. Ending the pensions had to be priority.
I doubt musicians in London will get anything even remotely near that amount. London Symphony & Philharmonic are hardly much inferior.
The LSO and LPO are not one bit inferior. Back in the days of Reiner, Martinon, Solti and even into Barenboims era, the CSO played with astonishing virtuosity and electricity. Maybe I’m just getting old, but I find a certain ensemble and corporate sound in the London orchestras that many orchestras in the US are lacking.
Comparing apples to refrigerators – there’s a huge difference in the way orchestras are funded here and in London.
Thanks Captain Onvious!
Why just the LPC and LSO? Admittedly, the latter are the most American of the UK bands, hence have the loudsst PR…
Good that the strike is over. Seems the musicians’ hand wasn’t as bad as so many posters here presumed.
given that the “musicians’ hand” was based on previously rejecting what was an attractive package from the association, the fact that they ended up getting an attractive package is no surprise. All it took was them to accept what they had rejected before with the lure of just a tad more. The tad more they got from holding out is a drop in the bucket compared to what they lost in wages. However, if the musicians really felt they had to go on strike for this long before coming to the conclusion that the other side was not going to given in, I suppose they had no choice. It’s a poker game in the end, and they lost their gamble that they could hold on to the DB if they would only firm in their demand to keep it open.
The musicians’ hand appears to have treated as something much stronger than it really is, given that their employer is. 501(c)3 charity dependent on donor support.
I don’t think this sort of thing can go on much longer. We’ll see…
OMG! I don’t think any orchestral musician in any European orchestra (including those consistently ranked as “the best in the world”) make that much. I play in a orchestra that could easily be ranked top 20 and I don’t make that… in 3,5 years!
All the more reason why the musicians of the CSO should be appreciative of the lengths the CSOA is willing to go to to find the money to pay them so richly! The musicians are delusional if they think it is merely their own ability which makes such compensation possible and in their eyes necessary.
On the flip side of the coin, you don’t have to live in the Chicago area. Count your blessings!
I lived in Los Angeles, New York, Paris, Florence and London and Find Chicago to have the nicest people, the cleanest city and both a calmness and vitality at the same time. Moved here permanently. Not sure what city you live in. Even the homeless people are nice here. On the west coast they threaten to stab you in the face if you don’t have money for them. Saw a family get food thrown at them in Los Angeles and in San Francisco, forget it, I saw a guy get his head kicked in on the street in daylight. Move there.
er.. you must live in the north side.
try strolling down the street on South Side or West Side. My friend who commute to Chicago and work at nite, packs his firearm. Another friend from Silly Valley was accosted by a thug in downtown area. ( a few blocks west on Grand past 10 pm )
Maybe they can’t throw food at you because their joints are frozen from the unbelievable wind and cold. Just a theory 🙂
Seriously, mkay, do you usually walk around Chicago loop in police uniform?
I was surrounded and chased by three homeless men the last time I was in the Symphony Center, merely 30 seconds away from the main entrance! They were determined to shine my shoes for $50! I had to resort to hide inside the CVS (and you know which one it is!) until they were gone.
After that, while I rode the Brown line back to my hotel at The Mart, I was teased by a bunch of minorities —- who obviously know I was a visitor — they pointed a laser pen at me (to scare me).
So as great as Chicago Symphony is, somebody must point a gun at my temple, before I’d fly there to hear them.
Oh poor Ben! Give the rest of us some space and keep your righteous self neatly tucked in Pleasantville
And you don’t worry about heath care and retirement….
What percentage of salary can you count on when you retire from state and job pensions? Do you have to make investment decisions during your working life, then figure out how to get a decent and secure annuity with your savings when it’s time to retire?
Regarding the orchestra’s pension, the musicians always have the option of saving more money for retirement, like most of us less entitled workers.
Does anyone know if the musicians get healthcare via the Orchestra, or whether they have to pay for it themselves?
The salary seems really high, but it depends how much else they have to pay for (that would be free or paid by the employer in other countries).
The CSO has a very fine health plan for its employees, with the musicians covering part of the cost. This contract apparently did not include the musicians paying more for their health care.
hmmm, your photo shows an empty hall
Assuming that a musician joins the CSO in his/her twenties, and retires in his/her sixties, there’s no reason for them not to do well with a 401K-type investment plan, for example investing in a conservative fund like an index fund.
A lot of assumptions there: decent investment returns, years on the job, not having life crises that involve withdrawals from savings, status of markets at precise time of retirement—then cost of commercial annuities vs. that from an in-house plan like what they’ve had until now.
The folks up in Milwaukee happily do it for $70k, and if you don’t think they’re at the CSO’s level, then you must agree that they at least deserve more than half of the CSO’s pay.
When you consider the fact that all of these players are experts in their field, and how few of these positions there are nation wide, ALL full time orchestral musicians are underpaid. Even the CSO.
This, I agree. Considering the level of skill and commitment they put into their profession, ALL full time orchestral musicians are underpaid. The level of perfection just to make it is just incredible.
That being said, unfortunately, market forces dictate otherwise.
The musicians are paid to play music. Patrons buy tickets to hear the music. Even with generally high ticket prices, ticket revenues do not come close to covering the cost of operating an orchestra. If you want to pay the players more, where will you get the money?
If my kid sets up a lemonade stand, charging $1 a glass, but only sells 8 or 10 glasses each sunny afternoon, it really doesn’t matter how fabulous a lemonade stand operator I think he is, paying him $500 per day from the proceeds is not going to be possible. Yet that’s effectively what everyone saying “oh, we should pay the players much more” is proposing…
Actually economics (supply and demand) suggests just the opposite. There are hundreds of people who apply whenever a position is listed (and not just for “big five” orchestras like the CSO). The great glut of musicians who apply and audition for even low-paying jobs means there is no general shortage of candidates, which would necessitate offering higher wages. The CSO would have no trouble attracting fine candidates at lower pay, and we know this because for most of their history the pay has been much lower! Surely no one with ears would suggest the Reiner-era CSO was an appreciably inferior bunch.
Cry me a river! Welcome to life for the rest of us.
If you want a higher salary, I suggest joining the NBA.
They did this strike to get 15000USD each month??? But new players won’t have the same benefits??? SHAME ON THEM!!! This is so ridiculous. They should be so happy for getting such a high salary for making their love and devotion to music a profession.
These are the best of the best. The top of their industry. Why does no one bat an eye when product managers earn around this much or when bankers earn the same?
Do you do you factor in your devotion to your industry when you negotiate your salary? Just because it’s an art profession, doesn’t mean they should earn less because of their “devotion” and “doing what they love”.
No one bats an eye when other professionals make more, sometimes much more, because they work in professions where there is more money to go around. Football players make their huge salaries because the teams sell 10s of thousands of tickets for each game, at prices which would make orchestra boards weep with envy. And then there are big revenues from televising the games, selling merchandise, food, etc. When the pie is big, you can give out bigger slices! This notion that “the world’s best X” for all values of X should be similarly valued by the marketplace is simply not reasonable.
As income of $181,000 puts these people in the 96th percentile.
Yeah, they really got screwed not making it into the 97th.