Trade Associations Feeling Their Members' Pain
Monday, December 15, 2008
Reflecting the economic turmoil of the industries they represent, many national trade associations based in Washington are hemorrhaging members who either have lost their jobs, run a financially distressed business or said they need to spend their dwindling discretionary dollars on necessities rather than dues.
As a result, associations are struggling to fill budget gaps -- trimming staffs, downsizing national conventions and trade shows, replacing meetings with "webinars," and either slashing dues to prevent a further membership slide or raising them to replace lost revenue.
Anticipating more fallout next year from the collapse of the housing market, officials at the 250,000-member National Association of Home Builders last week announced they will cut 52 positions and $11.5 million from their budget.
"The stark financial realities confronting our association and industry cannot be ignored," Jerry M. Howard, president and chief executive, said in a statement. "Projected income from NAHB's two principal sources -- membership and trade shows -- will be down significantly in 2009."
Associations hardest hit represent industries battered in the recession: manufacturing, real estate, construction, financial services, newspapers.
For instance, ranks of the National Association of Realtors declined 125,472 in the past year, a 9 percent reduction. The Mortgage Bankers Association lost nearly 500 members, dropping from about 3,000 to 2,550. The 11,000-member National Association of Manufacturers has frozen 2009 salaries, cut travel and entertainment expenses in next year's budget and eliminated 17 positions, some through layoffs. While only six newspapers quit the Newspaper Association of America this year, officials say they preempted what could have been a mass exodus by reducing dues 25 percent -- and making dramatic cuts in budget and staff. And the Air Transport Association last week canceled its spring conference for chief executives, citing uncertainty in the airline industry.
In an annual employer survey conducted by the Human Resource Association of the National Capital Area, 8 percent of the more than six dozen associations and nonprofits queried this year said they would lay off hourly staff next year; none made that projection last year. And 7 percent of the associations said they would lay off professional employees in the next year, compared with 3 percent that said that in 2007.
A consistent source of high-paying jobs, the association sector has been a small but significant cog in the engine that powers the Washington region's economy. The District, Virginia and Maryland rank in the top five states in association wages. Average salaries paid by professional associations, which represent individuals instead of companies, are even higher: $90,392 in the District, $70,732 in Virginia and $63,204 in Maryland, well above average pay for private-sector jobs.
Nearly 95,000 people in the region work for associations, and the organizations represent one out of 10 jobs in the District. The sector accounts for 2.5 percent of the region's $370 billion economy, or about $9.25 billion, analysts say. That's more than the $7.4 billion, or 2 percent share, generated by the hospitality industry.
While the extent of the problem has yet to be determined, some analysts say a significant slowdown in meetings and convention business could further weaken what many consider one of the most robust regional economies in the nation.
"If they don't have a meeting here, that hurts us," said Stephen S. Fuller, who as director of the Center for Regional Analysis at George Mason University studies the Washington area economy.
"It will reduce hotel occupancy and it will cost restaurant jobs and revenue," he said.