Sunday, March 4, 2012

Sports Stars Versus Business "Stars"

Mankiw links to a Ken Rogoff piece that asks why people seem to have no problem with star athletes pay versus supposed star-CEOs and private business executives.   Mankiw, while not explicitly stating so, appears to agree with Mr. Rogoff. 

The argument is nonsensical for a few big reasons.  First, it assumes that people don’t think superstar athletes are overpaid.  Informal evidence suggests otherwise. Second, athletes are not generally paid millions for leading his or her own team’s failure. Third, athletes, while not always the pinnacle role models we wish them to be, have never contributed to the disintegration of an economy while simultaneously leading the perversion of our democracy -- controlling special interest lobby groups on one hand and begging for government bailouts on the other.

There are differences. Equating 'stars' in the sports industry to the top private sector businesses simply doesn't make sense.

7 comments:

  1. Stars are overpaid too, but at least they entertain millions of people and, for the most part, do actually have a lot of talent.

    There are also far fewer of them.

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  2. Most athletes have a small window under which to make their lifetime income, due the physical deterioration implicit in their work. Aside from those few superstars who are able to garner post career endorsements, royalties, etc, athletes don't make as much as appears at first glance.

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  3. Mitch,

    Garth argument still holds, doesn't it? Regardless of whether sports stars are under- or overpaid, the idea that we should idolize them socially the way that atheletes are idolized is without solid ground. Social idolization is a big part of superstars' pay, otherwise athelete pay would be more equal.

    From these premises it seems to follow that while atheletes' compensation may be fairer than it seems to the public, the stigma we attach to sports stars seems immune to the stigma we attach to business "stars".

    The larger issue, which I do think it is worth having a debate about, is why we give so much attention to sports and devote so much collective action to sports, when our surrounding economic environment is so bad. (Or maybe, sadly, I just answered my own question.)

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  4. Sports stars (almost always) differ from business execs and movie/music stars in that they've demonstrated in measurable ways that they have skills that nobody else in the world possesses. There's no quantifiable way to show that the highest-paid execs are providing services that are superior to what thousands of other individuals could provide. It's easy to show that Usain Bolt is unmatched at running 100 m., that very few individuals can hit a baseball consistently, etc., etc.

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  5. I think that athletes are most certainly over paid. I also agree with(GP)in that some stars may poses talents that not many people poses. However I think that top business executives also have many ideas that people have never thought of. For example we would not have this little thing called an Iphone if it were not for Steve Jobs. This little invention that billions upon billions of people own is the reason why Steve Jobs and apple get so much income. Granted there are plenty of top executives that do not fall under this category of great innovators, but there are also plenty athletes that fall under the category of mediocre stars.In addition i also agree with (Daniel MacDonald) that it is the social idolization that grants these superstars a healthy paycheck.

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  6. Unknown

    I sincerely doubt that if Steve Jobs had never lived that our world would have gone without someone figuring a way to put a computer and a phone together and use touch screen technology. Your right though, it might not have been given the name iphone....... tragedy!

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