Athletes and income inequality

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I don't disagree
I just think the "minimum wage" should be a lot higher.Tons of guys are on "minimum wage" in the NFL-like I think half or more. Now granted that is like $450,000-that number should be higher given the revenue flow...
I agree. I just looked it up, and the minimum salary for NFL players was $795,000 in 2024. A far cry from what the top tier players make, but still not bad. The NFL almost prints its own money. I think the players get about 53% of the revenues which total over $12 billion a year.
 
I agree. I just looked it up, and the minimum salary for NFL players was $795,000 in 2024. A far cry from what the top tier players make, but still not bad. The NFL almost prints its own money. I think the players get about 53% of the revenues which total over $12 billion a year.
795 doesn't suck!!!
 
795 doesn't suck!!!
It's also not great if you only get it for four or five years and then spend the last 20 years of your shortened life in assisted care with a very low quality of life because of CTE. The owners will never allow this but I think the salary cap should be tied to the average of league revenue for the prior three years. The more the league makes, the more the players can make. And penalize any team that doesn't spend all or most of the cap (which I think already happens).
 
It's also not great if you only get it for four or five years and then spend the last 20 years of your shortened life in assisted care with a very low quality of life because of CTE. The owners will never allow this but I think the salary cap should be tied to the average of league revenue for the prior three years. The more the league makes, the more the players can make. And penalize any team that doesn't spend all or most of the cap (which I think already happens).
Assuming you're talking about the NFL, they do most of this. There is a revenue share which is tied to the salary camp as a percentage. There's not necessarily a penalty for not spending up to the max but the money is rolled over to the next year and I think just about everybody spends it. I could be wrong, but I believe it's calculated on a yearly basis but still pretty close to what you are thinking the owners will never do. Of course they never would have done that outside of the players union.
 
Assuming you're talking about the NFL, they do most of this. There is a revenue share which is tied to the salary camp as a percentage. There's not necessarily a penalty for not spending up to the max but the money is rolled over to the next year and I think just about everybody spends it. I could be wrong, but I believe it's calculated on a yearly basis but still pretty close to what you are thinking the owners will never do. Of course they never would have done that outside of the players union.
Yeah, I agree there's some carrot or stick that makes NFL teams spend at least most of the cap, or at least I think there is. I don't think the cap is directly tied to revenue, though. The cap gets renegotiated when the CBA is redone, but I think that's only every ten years or so, and player comp falls WAY behind league revenue in the meantime.

But I'm nothing close to an expert on this, so I may be wrong.
 
Yeah, I agree there's some carrot or stick that makes NFL teams spend at least most of the cap, or at least I think there is. I don't think the cap is directly tied to revenue, though. The cap gets renegotiated when the CBA is redone, but I think that's only every ten years or so, and player comp falls WAY behind league revenue in the meantime.

But I'm nothing close to an expert on this, so I may be wrong.
Yeah. I'm afraid you are wrong on this one. The salary cap is raised or lowered each year based on a percentage of the revenue from the year before. So in 2024, it was about 12% higher than 2023. That's actually more than usual as it usually goes up about 5 to 8%. The only time it went down in the most recent CBA cycle was a covid year.

What does get renegotiated each collective bargaining cycle is the percentage of revenue that goes to the players and how it's calculated.
 
Yeah. I'm afraid you are wrong on this one. The salary cap is raised or lowered each year based on a percentage of the revenue from the year before. So in 2024, it was about 12% higher than 2023. That's actually more than usual as it usually goes up about 5 to 8%. The only time it went down in the most recent CBA cycle was a covid year.

What does get renegotiated each collective bargaining cycle is the percentage of revenue and how it's calculated.
Ok, that makes sense. I stand corrected.

Now can I complain (maybe without basis) about the payroll differentials in MLB? :)
 
Ok, that makes sense. I stand corrected.

Now can I complain (maybe without basis) about the payroll differentials in MLB? :)
Yeah. Might also be able to compare MLB to the NFL and look at the revenue share and the parity that tends to produce as one of the reasons the NFL might be more successful.
 
No it does not bother me.
Its labor against capital...on a grand scale.
If anything it's a golden lottery ticket for kids coming from humble backgrounds.

Edited to add: I do think there's a bit of a sports bubble. Ticket pricing and facilities subsidies are the two early warning signals.
1. I don't know the sociology of sports in Latin America at all; I suspect the "humble background" is more true for football there than elsewhere. In the US, the cost of youth training in athletics gives advantages to kids who aren't from humble backgrounds (depending on what you mean by that). Not sure what impact that has, as I'm far from expert in sociology of sports anywhere. But I will say that increasingly pro sports leagues in the US are filling with kids of well-to-do former athletes. There are a lot of reasons for that and sometimes I wonder why it doesn't happen more often, but anyway.

2. Why is a golden lottery ticket a good economic outcome? Let's say you have $200M to spend on a rural development project. To me, giving that $200M to one lucky kid who happens to be great at some sport is a bad use of that money.
 
Let's say you have $200M to spend on a rural development project. To me, giving that $200M to one lucky kid who happens to be great at some sport is a bad use of that money.
Who is "you" in that scenario? Is a baseball owner offering a player a $200 million contract giving that player money which would have otherwise gone to a rural development project?
 
Still not sure what point you are trying to make Super. If it is to simply acknowledge that super high athlete pay (and entertainers) add a significant portion to the uber wealthy. That is probably true and could be proven with data.

If that is your point, and we also add that sports stars and entertainers are probably the biggest percentage of AF's that reach that group. It is like natural DEI. It is also achieved totally fairly in the free market.

Do you remember the "pet" rock chatski of the 70's? It probably made 100s of $Millions in today's dollars. There are probably 100k+ women making 6 or 7 figures on Onlyfans-- everything from chatty pretty flirty girls all the way to video porn.

In all those cases, it is fine that money was made because people choose and want to buy it. Even for the dumb people that happily paid money for a rock with a rope leash to pull on ground.
I'm not making any point in particular. I think, as a conservative, you're not terribly bothered by income inequality in the first place. Fine. I don't agree, but your position isn't irrational or craziness.

I would say a couple of things in specific response to you:

1. One weakness of libertarian-tinged conservative thought (which is the majority of the conservative intellectual tradition in this country), in my view, is the idea that "in the market" = "totally fairly." There's nothing about market competition that is inherently moral or good. It's surely better than hereditary nobility, but that alone doesn't make it comport with our understanding of ethics. That it's better than communism is not really a point in its favor either, at least not from a theoretical perspective.

The advent of AI, I think, makes my point more accessible than ever before. We've got a few enormous tech companies battling it out for AI supremacy. One of them will win the race, more than likely. So now the one that wins the race and develops an artificial general intelligence now uses that AGI to generate trillions of dollars of wealth for a handful of people. Is that OK just because it was achieved totally fairly in the market? That a few privileged men can buy or sell half the globe?

2. I'd like to leave race out of this discussion because it can lead to stereotyping that makes me feel uncomfortable. Yes, I would guess that entertainers are a higher percentage of black billionaires than white billionaires. There are, of course, reasons for that and many of them lie in our discriminatory past. In my view, not all of them (my view is that there will always be natural variation between cultural groups, which doesn't prove very much but isn't nothing), but it's also true that there's still a thousand and one ways to lose with the shoes and the idea that sports and music are the vehicles for upward mobility among minorities is dangerous.

I don't think you said anything bad but I don't think it's a productive direction for the discussion. If you disagree, I mean, I don't own the thread. I just think it's an obliquely relevant consideration at best.
 
Who is "you" in that scenario? Is a baseball owner offering a player a $200 million contract giving that player money which would have otherwise gone to a rural development project?
I didn't mean it to be a fleshed out hypothetical. I'm just addressing the idea that the golden lottery ticket is a good justification for a system that concentrates wealth in a few fortunate individuals.

I think the discussion has become distracted by people viewing it through the lens of "owners versus players." I understand why people gravitate to that discussion, as it's familiar, but that's really a different issue. It might be better and fairer for players to get 53% of league revenue than 40% of league revenue, but there's still an issue of a small number of people becoming incredibly wealthy. If that's 30 owners and 50 players instead of 30 owners and 5 players doesn't really affect the larger point.

One thing that does stand out to me in this thread -- and this is a problem in income inequality discourse in general -- is that our views of billionaires maybe depend on whether we see the billionaires as good or deserving. And when you go down that road, it makes the economic case against income inequality more difficult. When we say, "I'm OK with Lebron James or Tiger Woods being worth $2B but not a private equity baron," are we moving away from quasi-objective policy analysis and into a world of rooting for one's team? If we say that every billionaire is a policy failure (and for these purposes that number can be modified according to taste without losing the point), do we mean to apply it to Michael Jordan or just Jerry Jones?
 
If we had a more progressive income tax structure which ventured into confiscatory territory above say, somewhere between $50-$100 million in annual earnings and somehow we figured out how to impose a wealth tax above ~$500 million, I don't think the source of the income or wealth would matter. Tech bros, hedge fund managers, oil barons and athletes would all be subject to the same rules. (I pulled the numbers out of my ass without giving it too much thought, I'm just replying to your "good or deserving" question.)
 
The problem with people making giant piles of money isn’t that they can make it, it’s that we don’t tax it progressively. Not really, anyway.
This is a standard response, and a fair one. That's been my sort of my view for quite a while. Sort of, in the sense that I don't find it fully satisfying, but there's truth to it. In a neoclassical economic framework, it's very much true.

What this view misses, though, is power. Suppose we taxed more progressively and also taxed capital gains in some fashion. All right. Larry Ellison might be worth $5B instead of $50B. But he will still wield enormous power with that $5B. For most of our past, money alone could not necessarily buy great power, because it wasn't necessarily all that portable. Vast riches in NYC wouldn't necessarily buy power in New Mexico. For that, you'd need a source of economic power -- for instance, owning all the railroads or aluminum reserves. And that economic power can be attacked via antitrust (and it was, and that was a reason for the decline of the robber barons).

But in today's world, anyone can wield financial power anywhere. So when there are vast disparities of wealth, we get a significant distortion of social power, of democracy and self-governance. That seems bad in and of itself. That some of our most clownish supervillains are also saying things like "capitalism and democracy are incompatible so we need to get rid of democracy" reinforces this point, but it's still a concern even without the clownishness.

Now you could say, "well, we tax progressively, and we should also limit campaign contributions or political expenditures, and strengthen worker rights and so a lot of other stuff" and again, that's a good point. It is sort of my view. But it's also building a house of cards. If one of those protections falters -- let's say by weird judicial rulings that money = speech and thus free speech prevents democracy -- then the safeguards go away. Wouldn't it just be easier to limit the size of fortunes in the first place? And I ask that more or less rhetorically, because desirability and implementation are different issues. Like, let's say everyone agrees that we should limit fortunes; that seems like an important consideration even if we also agree that we don't know how to implement that principle in a way that doesn't cause more harm than good.
 
If we had a more progressive income tax structure which ventured into confiscatory territory above say, somewhere between $50-$100 million in annual earnings and somehow we figured out how to impose a wealth tax above ~$500 million, I don't think the source of the income or wealth would matter. Tech bros, hedge fund managers, oil barons and athletes would all be subject to the same rules. (I pulled the numbers out of my ass without giving it too much thought, I'm just replying to your "good or deserving" question.)
Of course. This isn't a thread for numerical accuracy. It's an abstract theoretical discussion. As long as there's some set of integers X, Y and Z that can be filled in for 50, 100 and 500, then your point is valid for these purposes.

From a policy perspective, I'm not sure the source of the wealth ever matters much, or if it does, only in limited circumstances. But from a political perspective, it might. It's much easier to rail against hedge funders than NBA players. I would say that the popularity of a guy like Mark Cuban tells us that's in part because hedge funders are faceless (Cuban is really an asshole underneath the persona). What does it affect if increasingly our billionaire class is full of people we like?
 
This is an interesting question. Super, you named exactly where I am at - it bothers me to see someone in tech making 100s of millions, while it doesn't (as much) to see an athlete making that much money. Right or wrong, I'm not sure. One thing that I would ask is, if less money were in sports, where would it be spent? For example, lots of athletes put money back into their communities. Would as much be spent there otherwise?
 
This is a union versus a cartel. The pay is collectively bargained. So who cares. The less one sides get the more the other. I would like the players get all they can.
 
This is a good example of the mathematical errors of income inequality measures. The non wealthy player from 10 years ago gets wealthy now and is considered always wealthy by comparing them to the current non wealthy who were assumed to always have been poor. The poor in this case got wealthy not poorer. The calculations assume the wealthy were always wealthy.

 
1. I don't know the sociology of sports in Latin America at all; I suspect the "humble background" is more true for football there than elsewhere. In the US, the cost of youth training in athletics gives advantages to kids who aren't from humble backgrounds (depending on what you mean by that). Not sure what impact that has, as I'm far from expert in sociology of sports anywhere. But I will say that increasingly pro sports leagues in the US are filling with kids of well-to-do former athletes. There are a lot of reasons for that and sometimes I wonder why it doesn't happen more often, but anyway.

2. Why is a golden lottery ticket a good economic outcome? Let's say you have $200M to spend on a rural development project. To me, giving that $200M to one lucky kid who happens to be great at some sport is a bad use of that money.

I'd be curious to see a breakdown of pro athletes by sport and their socioeconomic background by quartile. My guess is that in football and soccer you have the quartiles 3 and 4 over indexed and quartile 1 under indexed. Think basketball might be changing...that might lean to the mid quartiles. Not sure about baseball, but the LatAm players definitely come from Quartile 4. Would be an interesting exercise.

Regarding the benefits of the golden ticket...I guess I like the idea of giving hope to quartile 4 kids...that through sports they have a chance to improve their lot in life, be it an education, a modest income or even against astronomical odds being a mega star.
 
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