Wednesday, September 26, 2012

NFL Refs and Equal Pay

Eli,

The NFL ref strike and performance of substitute refs demonstrates the overwhelming difficulties with mandated equal pay laws.

Should the substitute refs get paid the same amount as the striking refs? They are doing the exact same job. There seems to be an overwhelming belief, however, that the substitute refs are vastly inferior to the striking refs, so the suggestion of equal pay is risible. For the common chores, the substitute refs seem to be adequate. But for the unusual plays, or the high-value playsm the substitute falls far short of the quality of the striking refs.

There are somewhere around 120 plays in a football game. For how many would the substitute ref be adequate? 110? 115? So the sub is fine for 90-95% of the game. But the 5-10%, that's where the game can be decided, that's where the money is, that's why the striking refs get paid well.

The Equal Pay Act "requires men and women in the same workplace be given equal pay for equal work. The jobs need not be identical, but they must be substantially equal." (EEOC) The law says nothing about the quality of the work performed. It says nothing about a job where 90-95% of the work is tedious, but their is a significant need for high performance 5-10% of the time. Since the substitute refs are doing the exact same job as the striking refs under the law, they should be paid the same. But who would really argue for that?

The last three recoveries, Clinton, Bush, Obama have been the weakest recoveries, measured by job growth, since the end of WWII. And each recovery is weaker than the prior. This is the case despite different fiscal and monetary policies, different interest rate environments, different political power structures.

Maybe the cause is simple. Maybe we've weighed the economy down with well-intentioned, pleasing sounding initiatives that hamper growth and often-times hurt the very group supposedly being helped. If there were a free market in refs, would an equal pay law really benefit the substitute ref? There would be little incentive to hire that ref since the value of his labor would be dictated by the wage of the highest value laborer, not the value of his labor. The same is true of minimum wage laws. Does it really help workers with low skills to price them out of the market? Isn't there a cause and effect between high teenage unemployment, that has been increasing over the decades, and minimum wage laws?

This isn't a bashing of Obama or the Democrats. It's a criticism of almost all politicians. They rarely like free markets and letting prices clear. Instead they have an unholy desire to "do something." Unfortunately the "something" can often hurt more than it helps.

I do find some of the commentary on the ref's strike amusing. In the same article I have often read a complaint that the striking refs don't work hard enough for their pay, but then a harsh criticism of the quality of the substitute refs. Obviously it's not that easy to be a good ref. And in a high-value business like football, good refs clearly earn their money, no matter how often they have to show up to work.

Bill

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