Portland's music scene
Portland, like many other cities, is a buyer's market for original music. A few years ago a friend on the staff of the (now defunct) Jam Magazine told me that there were about 180 live music venues in Portland, which means that there must be hundreds (I wouldn't be surprised if that number is pushing 1,000 now) of available bands.
The punks (and some, but not all, of the indies) are just kids getting their first taste of performance. They're getting by on attitude, fashion, and the party ethos. Their audience doesn't particulary care about the skills of the musicians - everyone's there just to have a good time.
The pros are just that. These are people who have made a lifetime commitment to music. They tend to be schooled, either formally or by virtue of having done nothing but music for a couple of decades. Most of these people do session, cover and corporate gigs and wouldn't dream of playing anywhere they didn't have a contract with a guarantee of enough income to make it a living wage. These people are not only musicians, they're also business people.
I doubt that there are many pros (in Portland or elsewhere) who manage to make a living doing original music. Who from Portland comes to mind? Art Alexakis, The Dandy Warhols, who else...? Some of the pros do play for the cover charge just to be able to go out and play what they want. Check out the Monday night Jazz jam at Produce Row - I've seen local guitarist John Stowell there a few times, and he's amazing. But these pros also have gigs that pay them a decent wage.
Finally, there are the aspiring pros. In this group there are a lot of talented hobbyists with good day jobs to pay the rent and put food on the table (I count myself in this category). I'd even lump some of the indies in this category - the ones who have been around for a while and are diligently following their vision and trying to build an audience. And that's where the aspiring pros meet their downfall - finding an audience. How do you convince someone to come see your show? Word of mouth is really the only thing that works, and competition is our downfall. There are just too many original bands competing for a limited audience. I'd be willing to bet that - at every local gig I've played or watched - a third to a half of the audience has been other musicians. Floater is about the only band I can think of where that ratio doesn't hold, and they've been working for years to build a following. Most bands simply don't hold together long enough to make that happen.
I don't think that the aspiring pros will disappear, nor will their compensation improve, at any point in the forseeable future. Portland has a lot of talented musicians all searching for an audience for their original material. Bands form, play for a while, break up, and re-form in new combinations. There's a wonderful cross-pollination effect at work that you don't find in many metropolitan areas and certainly not at all in rural areas. I was positively delighted when I moved here from Boston in '94 to find an alive and vital original music scene.
I think you've gotta realize though, that the aspiring pros are all there by choice. If they really wanted to make money, the aspiring pros can easily play the music that audiences want to hear - covers, oldies, dance tunes, etc. There's no shortage of reliable, reasonably-compensated gigs for pros who are willing to let someone else call the tunes. The rest of us are just looking for an audience - and that audience (without personal knowledge of the players) can't tell the difference between the aspiring pros and the talented hobbyists.
Frankly, I think the only way that aspiring pros and talented hobbyists will break out of playing-for-beer-money bar gigs is to find a cheap space somewhere and put on our own shows. That requires a mind set not possessed by the typical musician, and not of interest (because of the ramp-up time) to the typical promoter.