Why Pro Athletes Deserve More Money Than You
Posted by admin in General
© Craig Hatfield
The title of the post is meant to be provocative, of course, but if you've ever shook your fist at a world where dunking a basketball is worth more than teaching a child how to do multiplication, you might want to know the answer – why is this world so screwed up that LeBron James comes out of high school to tens of millions of dollars while a Ph.D in biology guarantees you nothing more than a nice piece of paper suitable for framing?
As this article explains, it's supply and demand:
Businesses want to hire people who will make a lot of money for them – and the more money, the better. Therefore, workers who can pull in big bucks for a business will be more sought after (the demand for them will be higher) than workers who can only bring in small change. And the way for businesses to attract the big-bucks workers is to offer them higher salaries.
But this is only half of the pay picture. On the other side is how many big-bucks workers there are. If they're everywhere (the supply is large), then even though each worker is very valuable to a company, companies won't have to work very hard to hire the workers, meaning salaries will be modest or low. In this case, the big supply trumps the big demand.
Yet if there are few of these valuable workers, then firms will be outbidding each other to grab them, so salaries will be high. So here the combination of big demand and small supply results in a gigantic paycheck for the workers.
Now let's go to the other end of the salary spectrum. Jobs that contribute relatively little to the business's bottom line won't carry large pay offers. However, combine this with a situation where many people can do those jobs, and – bingo – you get low demand combined with big supply, meaning a paycheck at the bottom end of the salary ladder.
So why do pro ballplayers get millions? Because, if they're good, they put a lot of people in the seats, they sell a lot of merchandise for the team, and – perhaps most important in today's sports world – they jack up advertising rates. Plus, although many of us had dreams as kids of being ballplayers, very few folks can throw or hit a 90 mph fastball, make a three-pointer with a hand in his face, or rush through a defensive line of 300-pounders. So, big demand and low supply equals major-league salaries for pro players.
If you want to look at it in terms that are less stark than teacher vs. NBA player, I happen to know a number of very excellent graphic designers. They work hard, do great work, love their jobs, but invariably complain about the lack of money they make. Why? Because there are way more talented graphic designers than there are positions to fill or open projects to complete. As a result, few graphic designers can command the big bucks, no matter how good they are.
Everyone should follow their dreams, but if you're looking at it from a financial perspective, it makes sense to learn skills that are in high demand but don't have a lot of people working in that field.
For example, being a plastic surgeon is probably not a bad business to be in these days. Can you think of others?
You can leave a response, or trackback from your own site.
Your supply and demand theory is enlightening. Makes me realise why they can earn so much. Thanks for the insight