The last few years have been particularly bad for the jazz community. The latest spate of bad tidings began in the spring of 2008, when the International Association of Jazz Educators (IAJE) went into a precipitous financial decline, resulting in bankruptcy, shortly after the annual conference in Toronto, which lost money. They blamed it on "poor attendance due to a weak US dollar," but I couldn't help but remember the old joke about jazz musicians (and jazz organizations, apparently):
Q: "How does a jazz musician end up with a million dollars?"
A: " Give 'em $2 million to start with."
Yet, these are all somewhat peripheral to the real jazz scene, which thrives in clubs, concert halls, and recording studios, right? Wrong. That scene is not exactly "thriving" in any sense of the word. As the former head of a small university jazz program in the Midwest, I would get weekly phone calls and emails from famous players or their managers (often 2nd or 3rd tier players themselves, trying to bolster their own bookings through peripheral association with a "star" player) who were all looking to "fill in a night" between concerts elsewhere. The saddest part was the negotiation for salary, which would start at $1,500-$2,000 for a quartet, and end up at $250-$400 (which is what my budget would allow). To witness four highly accomplished and famous professionals in their 50s and 60s unload their gear from a rusty 12-year-old minivan (in which they were all traveling together across the country, suits and clothes akimbo, empty Burger King bags strewn about) for $60/person was a sobering and depressing experience. And these phone calls and emails kept coming and coming, to the point where I couldn't even find the time to reply and politely decline—any contact just bred more contact, so, out of self-preservation, I just stopped answering completely. The irony was impossible to miss—jazz has been "sold" to the university as a training for a professional career, and suddenly the training ground has become one of the primary professional outlets.
The opportunities for regional and local players are in even worse shape—many small jazz clubs have closed or changed formats. Most musicians are relegated to playing other types of music for weddings and parties (hardly the stuff of artistic dreams), and those have been dwindling due to the popularity of DJs. Occasionally, there are concerts, but most often, when jazz is played, it is background music, never listened to closely, just unobtrusive sound that carries with it some supposed residual cultural cache that signifies the host's superior tastes and status. When I started playing paid performances in the mid-70s, it was with a wedding band, and we made an average of $150 per engagement; I hear from friends who play well-known jazz clubs in New York today that the pay is about the same (usually worse ) as I made playing weddings as a teenager 30 years ago. America's "classical music" is not in good shape. 
The situation is dire, and there is no one to blame for its decline. The solution, we've all been told ad nauseum, is "Education! Teach jazz in the schools, and we'll be creating new audiences and supporters for the future." This theory rests on a fallacy—namely, that jazz is such a timeless and appealing genre, that exposure at a young age will create new fans and the music's future will be assured. We have ample evidence to assess the education theory, and the evidence is quite clear—it is a complete failure. After over 40 years of Jazz Education, with enormous public and private support, we see no indications of a surge in supporters and fans, but we have seen a huge increase in the number of practitioners. The stark reality is that the people in the audience at most jazz concerts are either seniors or jazz musicians themselves, not devoted new fans. The slew of supporters has not materialized as promised. Why? The answer is simple: Music is a cultural artifact, and the culture has moved on. Jazz has moved on as well, further and further away from being "popular music," and yet jazz culture (particularly jazz education) stubbornly adheres to a stodgy conservatism which is hopelessly mired in romantic notions of the Golden Age (circa 1950-1960). (This decade has been reified by many performers, critics, and academics for a variety of legitimate reasons which I will not go into here.) Here we are, a half century later, and jazz musicians continue to foster the attitudes, behaviors, and sometimes even the hopelessly worn-out hipster lingo from that bygone era. While I'm sure this is emotionally comforting as subculture signifiers, to the outside world, this nostalgic indulgence must appear archaic, comical, and desperate. Jazz and its affectations certainly aren't "cool" anymore, and haven't been for decades; these signifiers no longer identify the user as a slick, modern, and rebellious hipster. Neither education nor beatnik mythology and posturing has created a sustainable audience for America's "classical music," nor does it seem likely that a new and vibrant audience will, at this late stage, materialize from these or any other marketing ploys.
My aim is not to depress an already beleaguered and marginalized subculture, but rather to draw attention to the fact that these strategies (if indeed they are intentional, which I doubt) are not working anymore. The culture that created and supported jazz has long moved on to other things, and there is no way to persuade or manage a culture to go in the direction we might like it to go. Culture is a living thing; it does what it wants, and it grows in surprising ways, some of which are positive, others are negative (depending on your value system and your perspective). It might be good to remember that jazz owes its existence to the very same chaotic and uncontrollable cultural forces of which I speak. Culture's march forward cannot be stopped, and to try is pure folly—it is a Sisyphean task unworthy of intentional dedication.
One solution, proffered by many musicians I've known over the years, is to copy the "classical model" in which government supports jazz in the same way that it has done for classical music. This is unlikely to be successful, for a variety of reasons. First, jazz does not occupy the lofty cultural position that classical music enjoys. It certainly has a certain cache (connoting "sophistication" and "intellectualism" among other things, hence its occasional use in Lexus commercials) but it simply does not have a history spanning millennia, nor does it have the resulting myriad style periods that have stood the test of time with countless generations of listeners enjoyed by classical music.
Second, the classical model has not been effective. It has definitely worked well as a make-work program for classical musicians for the last 50 years, but it has not built a sustainable audience base. Ticket sales do not cover expenses and the model must thus rely on continuing government support, which is, given the current financial climate, likely to suffer severe cutbacks. When governments have to choose between laying off firefighters and police officers, and violas and Wagner tubas, the outcome is not hard to predict.
Third, the failure of the classical model is not a secret. Books and articles have been written that detail the failures of both government and private arts support to deliver on their promises. If jazz musicians attempt to adopt the model, the arguments for "education" and general "enlightened arts support" are unlikely to be persuasive. When a private donor has to choose between funding a new cancer research wing at a hospital, or funding a new jazz orchestra, the outcome is, once again, not hard to predict.
The fabled days of yore are gone, and no amount of education is going to bring them back by attracting or enthralling an obviously disinterested public. Are there solutions? Possibly. Jazz is at a point where other musical niche/period genres have been for many years (Early Music, New Music, and Electronic Music, for example) and there may be a lesson to be learned from how these genres function in academia and in society at large to maintain their standing as serious art forms worthy of respect and funding. However, for a community so attached to its own romanticized "outsider" history, an approach of this sort would be difficult to accept, and quite likely impossible to adopt because of the enormous emotional attachment to the attitudes and behaviors that are apparently as much a part of jazz as the music. That's a shame because, ultimately, the music that jazz has given to the world is so much more meaningful and interesting than the ephemeral trappings of the fleeting decades of its birth.
Yes, jazz is in a state of crisis; "the fabled days of yore are gone, and no amount of education or archaic posturing is going to bring them back by attracting or enthralling an obviously disinterested public." And yet, I do think that we live in a time of remarkable creative growth for music in general, and for jazz in particular. With the ability to record and distribute music independently and inexpensively, and the resultant unlimited access that this provides, we've seen an explosion in musical activity in all genres, jazz included. Visit CDBaby (for example) and search for jazz, and you'll find a staggering number of accomplished jazz artists, mostly unknown, making music of all kinds under the "jazz" umbrella (including genre descriptions that defy description like "Industrial Fake Jazz"). And look at the tremendous quality and quantity of European jazz being produced, with its unabashed blending of styles which has led to many heated discussions on how jazz is defined at this juncture in the 21C. There are so many amazing musicians creating such a fantastic smorgasbord of new jazz, which one can hardly even keep up with a small percentage of it.
Yes, the International Association of Jazz Educators (IAJE) is gone, which is really unfortunate given the organization's unique position as a legitimate academic society whose sole focus was jazz. Academia must play a large role in sustaining the art form, both intellectually as a branch of musicology and music history, and also as a performance venue with the necessary infrastructure and resources to embrace an art form with little commercial appeal. On the bright side, a new organization, the Jazz Education Network (JEN) appeared quickly to take its place; time will tell if JEN will be able to navigate the difficult terrain between academia and jazz performance better than the hapless IAJE. Similarly, magazines have disappeared, but new media outlets (like the blog you're reading) are ubiquitous and, like recording technology, inexpensive and accessible to all.
In short, this era exhibits unparalleled creative activity and creative potential for jazz and for the arts in general. I've found my own experiences in the last decade or so have reflected this in many ways. The playing and recording I'm doing is more varied than ever before and the projects I'm involved in are much more interesting and creative than ever before. So, despite the issues I wrote about previously, there are reasons to be very hopeful about the future of jazz from a creative viewpoint.
Economically, the situation is not good. Between 1978 and 1988 (when I was playing professionally in the Detroit area), the average pay per engagement was around $100–casuals, church gigs, weddings (a little more), clubs (generally a little less). Today, the pay might be a little higher, but it would have to be a lot higher to keep up with inflation, and even more for musicians to get a raise in pay.*
Add to that the fact that dedicated jazz clubs are only found in major centers, and that there are usually only one or two in most places other than New York City, and the economic problem is further exacerbated. This means that there are (if the club books groups seven nights a week) only 30-60 possible engagements available each month. The rest of the work is casuals (weddings and parties), which tend to be clustered on weekends and holidays. (Is that why we pursued a career in jazz? To play weddings and office parties?) With the thousands of qualified musicians in any major center, it's easy to see how an oversupply of labor combined with diminishing demand have worked to keep fees near where they were in nominal dollars 30 years ago.
Other factors have weakened the live music scene as well, such as increased quantity and quality of home entertainment options, less alcohol consumption, stringent non-smoking laws, unlimited free music via file-sharing (see The MP3 Filesharing Fiesta: Party like it's $9.99), and our incredible ability to script our own life soundtracks in a fine-tuned manner due to all of the inexpensive technological gadgetry at our fingertips. I don't think live music is ever going to disappear, but I can't help but remember Glenn Gould's prediction from 50 years ago that "recordings will make the concert hall obsolete." Today, this appears more and more prescient rather than kooky. (The situation is, however, not limited to jazz, it applies equally to classical music as well.)
Economically speaking, there's nothing encouraging to report; creatively speaking, however, there's nothing but encouraging news to report. So what's the problem? The problem is that some of the strategies for career development that worked in 1960 are no longer functional, and haven't been for a long time. In fact, I submit that they may be downright harmful for career development because they hinder creative development while at the same time watering down the brand and demeaning the music.
So, I'm not pessimistic about the future of jazz, broadly defined, as an enduring creative force. I am, however, concerned that the fascination with (and romanticization of) jazz history and jazz culture has calcified into a neoconservative fetish that would make Adorno blush. This stance will likely hamper its opportunities to flourish as a fully marginalized and noncommercial musical genre that would otherwise have far greater potential for growth and innovation.
2 I appreciate Wynton Marsalis' comment as a fundraising and marketing device, but beyond that, it is troublesome. Why does jazz have to be legitimized by a comparison to classical music? If jazz is "America's classical music," what is "America's jazz"?