Wages of Footballers

Readers Comment: I believe if you want to solve the recession then look at footballers.
they earn millions and for what/kicking a ball around!! I think their wages should be cut down to say 75k a year and the remaining money should be used wisely.

This recession illustrates that economic policy often involves making decisions based on economic utility rather than a sense of justice.

For example, the government was right to bail out the banks, even though the incompetent bankers didn’t deserve to be bailed out. (Why we need to bail out banks)

By contrast, the honest car worker who lost his job, probably deserves to keep his job. But, unfortunately, the government can’t subsidise every potential job loss in an economy.

The high wages and economic rent of footballers is a good example of the laws of supply and demand in practice. See Wages of footballers

If the top footballers had their wages cut and the income was distributed to lower paid workers, it may create a small increase in consumption. Even though there is no extra money in the economy, it is likely that low paid workers will have a higher marginal propensity to consume than footballers on over £50,000 a week.

In other words, those earning over £50,000 are likely to save a higher % than workers selling burgers for £15,000 a year. However, the impact on overall aggregate demand would be limited at best.

In a recession, the inequities of income distribution seem more unfair, but, it is not  inequality which directly causes a recession. Nor is solving inequality a solution to the recession. Can a recession be avoided?

This does not mean inequality of income is necessarily good, but, it is not directly related to the problems of a recession.

Interestingly, many professional footballers will be affected by the new 50% income tax band. – Some Premiership players have even threatened moving to countries with lower tax regimes.

By on October 15th, 2009

5 thoughts on “Wages of Footballers

  1. This is ridiculous – it’s easy to say that ‘they’ should pay footballers less, because what would the government be able to do with the extra money? nothing- because it’s not the government’s money to spend. Parhaps this might work if the football clubs (the ones with control over the money) promised to hand over any leftover money to the government, but that is a totally unrealistic concept. Footballers earn a ridiculous amount of money, I’ll admit, but a ridiculous amount of money is also made at every major football match that these over-paid footballers play in. Lessening one person’s wages and not someone else’s is certainly not the way to solve the economic crisis. I HAVE SPOKEN.

  2. Why do people always point to Footballers wages as major Economic problem? They are paid ridiculously high wages because their MRP is ridiculously high. Players like Gerrard and Rooney attract so many fans to watch games and buy merchandise. Not to mention the success they bring to their respective clubs. This is sound Economics.

  3. People get paid according to their value they offer others.

    The problem is most people don’t realise this.

    Premiership football players get paid highly because week in week out, they are seen by thousands and thousands of people. They add value and enjoyment to so many people’s lives. They are in the public eye.

    Do you hear anybody complain at how much movies stars are paid? No. There movies are seen my thousands of people.

    If you want to get a higher wage. You have to add more value to those that you are serving and increase the numbers of those that you are serving.

    N.B. People get confused when they try and equate a wage figure to the supposed importance to a job. They see one job as more important when compared to another. This is social created scale. That has little relavance in cold hard cash terms.

  4. IF THEY CAN AFFORD TO PAY PROSTITUTES £1000 A NIGHT..THEY ARE BEING PAID TOO MUCH MONEY! I AM GETTING SICK OF SEEING THIS STUFF ON MY TV / NEWSPAPER. THEY ARE PUTTING OUR COUNTRY TO SHAME. THEY DO WHAT THEY LIKE BECAUSE THEY HAVE SO MUCH MONEY!

  5. i just dont believe in the money they pay players, it is absolutely too much. maybe there is a hype somewhere just for people to have interest in the game.

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