How Will The Cost-of-Living Crisis Affect The Music Industry?

Writer Mark Roberts / Photographer Connor Pope

Like 2020 and 2021 were the years of non-stop COVID-19 coverage, 2022 has shaped up to be all about the cost-of-living crisis, with a brief 10 days of wall-to-wall coverage of the queen’s death, and then straight back to it. The cost-of-living crisis has torn a significant hole in the wallets of many of the UK population, and with it a sense of anxiety and worry has swept the nation.

Although the recording music industry was booming in 2021, live music performance suffered significantly throughout the pandemic. In the summer of 2022, inflation hit a peak of 10.1% in the UK, the highest in Europe, and a figure not seen since 1982 under Thatcher’s reign. The implication here being that your money is worth 10% less this year than it was last year.

With inflation causing knock on effects to the economy, what exactly will the impact be on the music scene in Birmingham and across the UK?

The reason behind this rise in inflation, according to the government and the Bank of England, has been Russia’s war with Ukraine impacting supply chains. Although this might not be the whole picture, with quantitative easing reaching high levels over 2020 and 2021 – pumping new money into the economy, but which is inherently inflationary.

And then according to Unite the Union, 60% of inflation in the UK can be related to “corporate profiteering”. A figure that is reflected across tthe pond by the Economic Policy Institute.

But the impact on the music scene can’t be understated, with Russian oil and gas not flowing into western markets the prices of energy and fuel have skyrocketed. The touring band, who rely on petrol and diesel to get around, will find more of their fees being spent on fuel. And with OPEC further cutting the supply of oil we can expect to see a rise in price at the pumps.

Another potential factor that’s recently rocked the UK economy, with warnings from the IMF about its ramification, is recently resigned PM Liz Truss’s (and Kwasi Kwarteng’s) mini budget. Upon its release the pound almost immediately dropped, reaching its lowest level against the dollar since 1985.

Whilst the recording music industry may get away with just having to manage the effects of a raise in energy prices, the greater impact will be felt in the distribution sector – with the cost of vinyl production (already stretched to its limits in terms of capacity for production) rising along with other music merchandise.

This cost will be felt by artists on the front line, with increased prices on their merch desks.

The venues will likely be the worst hit, with sharply increasing prices in alcohol products being felt in the hospitality sector combined with a poorer society, and eye-watering energy bills compounding into a lack of money to spend on nights out, gigs, and drinks. Warnings that thousands of pubs face closure bring these problems into the stark light of day.

Hopefully, with the government’s plan to borrow to help with energy bills now involving businesses this onslaught will be reduced. However, the cost of mortgages are also rising due to the Bank of England’s raising of interest rates, leading to higher rents for the venues at a time when they could use it least.

Then there’s the often less thought of people, those who rely on the creative scene for income and who will also be affected. As venues close, everyone from bartenders to production managers will be out of a job. And with unemployment already at a record low, they will likely find it hard to find new ones.

Promoters will have less money to promote their gigs, and less venues to promote in. Local, evolving artists will find less tours coming through their city to support. Photographers and journalists will have fewer gigs to cover, and if they are paid they likely won’t see a real-terms pay increase.

It’s frequently presented in the mainstream media that wage increases during a time of inflation cause a wage-price spiral, where inflation begins to spiral out of control as businesses repeatedly raise wages year-on-year and raise prices on their goods and services in response.

It’s important to note that there are differing opinions on whether this wage-price spiral is the most realistic outcome, found mainly on ‘the left’ but also in the opinions of Milton Friedman – the pre-eminent neoliberal economist of the late 20th century and advisor to both Margaret Thatcher and Ronald Reagan.

Whether, therefore, wages rising would impact the music industry negatively (or any other industry) is still up for debate.

The ripple effect of the cost-of-living crisis predicts a dark time for the music industry in Birmingham, and the industries that rely on it. Which means it’s more important now than ever, to rally together, and share the warmth of a sweaty dance floor and a well lit stage, instead of putting the heating on at home.

Heating that is, now, three and a half times more expensive than in 2020.

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