Alan B. Krueger, Chairman, Council of Economic Advisers’ speech called “LAND OF HOPE AND DREAMS: ROCK AND ROLL, ECONOMICS, AND REBUILDING THE MIDDLE CLASS” is an interesting take. He says he called it that because many of the forces that are buffeting the U.S. economy can be understood in the context of the music industry. His 25 years of teaching taught him the best way to explain economics is through the example of the rock ‘n roll industry.
“The music industry is a microcosm of what is happening in the U.S. economy at large. 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.”
The music industry has undergone a profound shift over the last 30 years. The price of the average concert ticket increased by nearly 400% from 1981 to 2012, much faster than the 150% rise in overall consumer price inflation.
And prices for the best seats for the best performers have increased even faster.
At the same time, the share of concert revenue taken home by the top 1% of performers has more than doubled, rising from 26 percent in 1982 to 56 percent in 2003.
The top 5 percent take home almost 90 percent of all concert revenues.
Read the rest of his speech here.