On Premier League Football And Income Inequality

Premier League Wages Income Inequality

 

Isn’t it awful? The English Premier League has just signed a new television rights deal with Sky and BT worth a cool £5.4bn, while some of their employees earn only the minimum wage. What a searing indictment of our society, of capitalism itself!

Except, of course, that it is no such thing.

Presented once again with a golden opportunity – an open goal, as it were – to talk about real, tangible ways to improve the living standards and life opportunities for those on low incomes, the British left did what it now does best: furiously ignore the real problem, forget actually helping the poor, while training all of their rhetorical guns on a few wealthy scapegoats.

From the Mirror:

Despite a £1.78 billion pay bill last year, not a single top-flight club has committed to giving all ground staff and suppliers the £7.65-an-hour “living wage”.

Pampered players can earn eight-figure annual salaries – with England and Manchester United striker Wayne Rooney, 29, pulling in £300,000 a week and Manchester City’s Argentinian forward Sergio Aguero, 26, £220,000 a week.

Veteran Labour MP Frank Field has written to all 20 Premier League clubs demanding action.

But he got just six replies – with not one club committing to the full rate. Sunderland said the issue “did not merit further discussion”.

Perhaps it has escaped Frank Field’s attention, but top-flight football is not the only industry displaying a huge disparity between lavish pay at the top and meagre wages at the bottom.  Those people lucky enough to win an internship or entry-level position working in the City or Canary Wharf are compensated reasonably well, but earn only a fraction of the money raked in by their managing directors or partners. And the subcontractor employees who clean their offices every night earn less still.

The UK’s oil and gas industry supports nearly half a million jobs, which in 2008 paid on average £50,000 per year, and vastly more for the executives atop the large oil companies. But there are many people among those 500,000 who earned nothing like these sums.

The pay in politics isn’t exorbitant at all, but MPs, ministers and special advisers earn vastly more than the unpaid or minimum wage interns who toil away in the hope of recognition and advancement.

The point here is that if MPs such as Labour’s Frank Fields are going to waste precious time writing angry letters to Premier League football clubs because their employees do not get an equal slice of the pie, they should be doing the same for all businesses in all industries. And they should own what they are doing, and what motivates them to do it, and call it by its name: communism.

Also jumping on board the outrage bandwagon is The Independent, with an editorial entitled “It’s baffling why premier league clubs won’t stump up a living wage“:

These people are not at the bottom of the pile. The fact that they can access football clubs means they can at least find employment. But the gulf between the best and lowest paid at the places they work is, frankly, a crashing embarrassment. You wonder how Arsenal – a club managed by one of the game’s deepest thinkers – can have such a staggering lack of self-awareness to allow [a waitress] to take home £1,500 a year maximum when Alexis Sanchez commands £7.8m – 5,200 times more than she does. It “only” took an annual salary 169 times that of the average British worker – the former Barclays chief executive John Varley’s £4.36m – to prompt a national debate on pay ratios a few years ago.

Never mind the fact that £1,500 per year is the quoted wage from no more than 20 days work per year as a waitress, while the £7.8 million is the remuneration paid for a full time job. Never mind the airheaded assertion that Arsene Wenger should micromanage the entirety of Arsenal’s affairs, right down to the pay and conditions of stadium catering staff. It’s quite clear that Ian Herbert, author of this piece, simply has no understanding of capitalism, the system from which he benefits so handsomely and yet spends so much effort criticising. Baffling indeed.

Left Foot Forward also has difficulty understanding the workings of the market, preferring to concoct an imaginary universe where competitive pressures and comparative advantage do not exist:

Whilst the players are the stars, it’s the football club employees – from ground staff to suppliers – who undertake crucial work that fosters much of the match day atmosphere that the English game is so famed for, and which makes it so lucrative and appealing to TV companies.

It is the security staff, cleaners and caterers that help make match days possible. Such work should not be underestimated by the multimillion pound organisations that rely on their labour. It’s much easier to argue that all workers should be paid a wage they are able to live on – harder to justify why some footballers deserve their £300k a week wage packet.

And here is the main flaw in left wing thinking when it comes to pay disparities. They see a hugely successful industry, the English Premier League, and are aghast at the disparity between the stupendous pay of the top talent and the decidedly average pay of the back office or stadium staff. Fair enough. But follow this line of thought to its logical conclusion and you find yourself demanding that every employee in a lucrative industry should be rewarded with a lavish salary whether their personal talents and contributions are exceedingly rare and valuable, or average and easily replaced.

Those leading the outrage from the left, such as Frank Fields MP, are essentially suggesting that the man who cleans the office of an investment bank should be paid handsomely simply because he works for a highly profitable firm, while his counterpart who cleans the office of a loss-making company in an industry in decline should content himself with the minimum wage.

(Never mind the fact that many Premier League clubs are barely profitable anyway – the high wage bills they have to meet in order to retain the on-field talent to remain in the top flight make sure of that).

There is no understanding – or a stubborn refusal to admit – that there rightly exists a link between the amount of value that an employee adds, as determined by the market, and the financial reward that they receive in compensation. And rather than trying to find ways to make the market operate better or more equitably, we are insulted with lazy arguments that firms should pay certain employees certain sums of money “just because”.

As this blog noted last year:

Labour solutions such as the minimum wage, government-owned everything, punitive taxation, positive discrimination and hiring quotas for every conceivable minority are like a temporary bandage, a stop-gap solution. Once you take away the regulation, the situation – driven by human behaviour and prejudices – will inevitably return to its previous, often inequitable steady-state.

Moreover, these policies are the ultimate expression of the left-wing view of humanity, which is that mankind is for the most part inherently bad, and requires continual oversight, guidance and correction by an enlightened, progressive elite – whose position left-wingers are more than happy to fill.

What Britain – and most of the world – really needs is not coercive paternalism from on high, but rather prudent interventions in the free market to help it function more perfectly, recognising risk, potential and value in a more holistic way.

A better educated, more highly skilled British workforce would attract more of the kind of information economy jobs that will underpin any future rise in living standards. But the current glut of unskilled workers, failed by decades of bad government policy, ensures that there will always be a race to the bottom for pay and conditions at the lower end of the market.

And as the manufactured outrage about the employment practices of Premier League football clubs serves to show, after nearly five years out of government the Labour Party and the British left still have nothing to say when it comes to tackling these slow-burning, fundamental problems with the British economy, preferring to paper over the cracks of our collective failure with the coercive tools of legal minimum wages and income redistribution.

Shaming top-flight football clubs into paying the Living Wage will make life marginally more bearable for a few thousand people. Marvellous.

Now what about everyone else?

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3 thoughts on “On Premier League Football And Income Inequality

  1. olliecampey February 18, 2015 / 5:00 PM

    Disgusting, it real is and what’s worse is that this model isn’t sustainable and is only going to create a bigger divide between the Premier League and the football league

    Like

    • Samuel Hooper February 19, 2015 / 12:01 AM

      I share your concerns about the widening gap between the Premier League and football league, especially as it relates to the development of top-quality English talent. What would you do to address the problem?

      Liked by 1 person

      • olliecampey February 19, 2015 / 7:02 AM

        Distribute a certain amount of it too the lower leagues and a reasonable amount to grass roots. Ill follow your blog, check out mine if you have time

        Like

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