Income Disparity in the Music Industry

Updated: Mar 29, 2019



There is a financial barrier of entry into the world of independent music business. While it may seem like people from high income have everything laid out, other people don’t have the support system needed to develop resources for healthy relationships in the music industry. "The music industry is a microcosm of what is happening in the U.S. economy at large," Krueger, former chairman of the White House Council of Economic Advisers, says. "We are increasingly becoming a winner-take-all economy, a phenomenon that the music industry has long experienced. Over recent decades, technological change, globalization and an erosion of the institutions and practices that support shared prosperity in the U.S. have put the middle class under increasing stress. The lucky and the talented – and it is often hard to tell the difference – have been doing better and better, while the vast majority has struggled to keep up."

Since 1982, the top 1% of performers have gone from earning 26% of concert revenue to estimates between 56% and 77%*! A century ago, a performer could only reach as many people as his or her vocal range and travel schedule would allow. Now, high quality recordings can be distributed to anyone from a computer. The result: anyone can get the precise music that they want to hear. The influencers who create popular music are wildly famous and can make a decent amount of money from their art. It can be a different story for the freelancer trying to build a tunnel through the underground.

There are only select artists or professionals in the music business with the cultural and commercial leverage to make decisions simply based on their abilities. Everyone else is just hoping to make money and be heard. The issues affecting income disparity in the music industry are so intertwined in the fabrics of society that it is hard to pinpoint exactly where to begin addressing them. It may have been an easier blog post to write about factors supporting rich cis white male privilege. Four issues driving biases for income inequality are race, gender, sexual orientation, and education.

Race-

According to NPR, a study from the Small Business Administration shows that African American and Latinx communities who started businesses are more likely to use savings or risk personal income instead of credit to fund those businesses. They are less likely to get approved for credit when they do apply for it, even after controlling for their credit scores and other factors. And so business owners who are people of color start under more stress, putting a strain on potentially shaky financial foundations. It is far easier for white people to gain the capital or other resources needed for any type of success, especially in commercialized genres. White people make up 96% of the top 50 of past Billboard’s 100 charts. The entire Top 10 is made up of white men.

Gender-

Music is nonbinary so why the toxic masculinity in pop culture? Also how come more financial or commercial professional advancement does not exist for transgender workers in the entertainment industry? No transgender artist has charted in Billboard’s Top 100 or won a Grammy. Women comprise just 9% of past Billboard 100 charts. Economic and social circumstances affect equality in availability to be in positions of power and influence for workers in the music business that are not cis male. Access to capital for women and the trans community in small music businesses is intensified when the gender disparity of reproducing, childcare, domestic work, and lack of property ownership and assets is considered.

Sexual Orientation-

Straight guys usually earn more than gay men, who earn more than lesbian women, who earn more than straight women. In the U.S., there is currently no federal legislation that prohibits employers from discriminating against workers based on their sexual orientation or gender identity. Gay men are paid less and lesbian women are paid more because of the biases of those making hiring and compensation decisions. The gay versus straight wage gap is the result of white patriarchal systems favoring masculinity in the workplace. Gay men are still earning more than straight women (and lesbians are earning more than straight women). Transgender workers who transition to female earn less money than they did before, while those who transition to male actually go on to make more money. Workplace discrimination against sexual identity has a long way to go to be dismantled, along with the patriarchy’s exclusion of femininity.

Education-

One reason for the growing gap in income inequality is the ability of wealthy parents to invest more time and money in their children (in weekend sports, ballet, music lessons, math tutors, and in overall involvement in their children’s schools), while lower-income families, which are likely to be managed by a single parent, are generally stretched for time and resources. There is also a gap in income disparity when it comes to trying to position children for college or other career plans after high school. The educational access that people from low income families need to gain the same opportunities as richer people is much harder for them to come by. Rising residential segregation by income has led to increasing concentrations of low and high income students going to different schools with varying levels of quality. Peer problems, geographic mobility, and challenges in retention rates for good teachers have made it difficult to provide consistently in depth learning experiences to schools for lower income students.

So how should the gap in income inequality be reduced? Because inequality is ingrained into society, only long term trends (in policy, demographics, etc.) affect disparity. The trend that affects income distribution the most is tax policy. Countries that have high tax rates on the wealthy, such as Swizterland or France, suffer from less income inequality than the U.S., which has low taxes on the wealthy and high taxes on the poor. While some disparity is a result from people's behavior, policy promoting progressive projects can reduce income inequality not just on a political note, but with personal business administration in the music industry as well.

*Note: Earnings are projected based off of reported business profits as well as personal finances due to the technological advancements in the music industry allowing more and more independence with music production, from students being able to make side income from their art to freelance self-employed musicians who may not need to report their income.

Sources:

1. Alan Krueger on how the Music Industry Explains Inequality

2. Education Gap Grows Between Rich and Poor, Studies Say

3. For LGBT Workers, Job Security Supersedes Pay Equity

4. Gender Inequality and the Music Business

5. Growing Income Inequality Threatens American Education

6. How do We Penetrate the White Male Roadblock at the Top of the Music Industry?

7. Income Inequality in Music Industry

8. Music is Non-Binary: Where are the Transgender Musicians?

9. Streaming is Making the Music Industry More Unequal

10. Top 1% of Musicians Earn 77% of all Revenue in Recorded Music

11. Unequal Pay: the Gay Wage Gap

12. What do We do About America’s Racial Wealth Gap?

13. What Factors Influence Income Inequality?

Image: Dem Roach Boyz, Folkin Around