does this mean that the only musicians that survive on music are those that are in the educational field or give a lot of private lessons, or the few that are plugged into the system?
Pretty much. To paraphrase Corey Christiansen, who I played with last December, the only way for a jazz musician to make it these days is to teach. I don't teach because I am self-taught and I don't really know how to explain the things I know. Plus there are not too many people who want to play jazz organ.
Thankfully, my wife has a decent job with benefits, but even she hasn't gotten a cost of living increase in 2 years (due to poor management at the top). But that's another story. I just sold one of my Hammond organs yesterday so we could pay the mortgage. The gig scene has been absolutely awful since the first of the year. I've played a grand total of 7 gigs since 2007 started. But that has more to do with Michigan's terrible economy than anything else.
I should go into demolition. I just read they are going to raze two more GM plants here in town.
EDIT: To say I'm not complaining. This is the life I chose and I enjoy playing music.