Football and Cheerleader Freedom or Equity?

Robert Reich complains in a Facebook post that NFL cheerleaders are paid too little:

In the realm of economics, how valuable is the freedom for football team owners to pay market wages for cheerleaders?  And for cheerleaders, how valuable is their freedom to choose cheer in stadiums, evenings and weekends, in front of tens of thousands of fans, and millions more on television. Does Robert Reich’s claim of unfair and inequitable pay capture the whole story?

For many and maybe most NFL cheerleaders, cheering at sports events has long been part of their experience growing up. They’ve practiced and cheered through junior high and high school and maybe in college. But never for pay, or in front of crowds as large as pro events.

Many who’ve watched NFL games for decades don’t quite understand what “pro” cheerleading is about. NFL teams didn’t used to have cheerleaders. Maybe NFL cheerleading was pioneered by the Dallas Cowboys as a marketing idea? Professional football has expanded dramatically over recent decades, as television and cable have expanded viewership and advertising revenue.  Cheerleading is part of this expanded (crazy?) professional sports world.

Pundits complaining about cheerleader pay now is a strategy to connect to and promote the $15 national minimum wage campaign, which is part of the income inequality debate and push for higher taxes on “the rich” which is part of the campaign cycle. And discussing “pay inequalities” between NFL cheerleaders and the NFL commissioner is just piling on the latest scandals of NFL stars behaving badly. (Why not compare lack of pay for Ohio State cheerleaders to the $6 million annual salary of Ohio State’s President?)

It should be obvious that some jobs are a mix of work and play, or work and hobbies and deep (or superficial) satisfaction. How much do homeschool debate coaches get paid? Probably too little if one looks just at the value of service provided. But those helping others learn debate skills and strategies enjoy helping others. Former debaters have many great memories of speech and debate, and enjoy helping others prepare for these experiences.

Are there debate kingpins taking advantage of alumni coaches willing to work for free or low pay, while making tens of thousand of dollars running debate clubs and companies? Probably not. But if there were, would federal minimum debate coach pay be a reasonable response? Of course not. Instead, debate coaches who feel underpaid can try to launch their own debate club with interested families.

That’s how things work in the realm of economics. Employees, from cheerleaders to programmers, engineers, airline pilots, and restaurant workers, are aware of wages and benefits at other companies and similar occupations. If they feel underpaid or underappreciated, they switch jobs.

Training new employees is a pain and expense for any company, so managers prefer not to lose workers to competitors. But they don’t want to overpay employees either. If five qualified applicants turn up for every job opening, that’s a sign pay might already be higher than the market rate. And if competitors are paying lower wages for workers who are as productive in providing services, then a company has a competitive challenge.

If equity is defined as treating people fairly, then in the realm of economics it means paying people justly for the goods and services they produce or provide. Fair pay is not a simple process or set pay rate that can be pulled out of the air or guessed by pundits, reformers, or regulators. The earnings discovery process requires the active efforts of employees as well as employers. Employees do best when diligent, alert, and honest, but also keep an eye on the wages paid at similar firms. Human flourishing depends on people taking responsibility for their own health, self-improvement and self-awareness (how does their current job fit into their longer-range plans and calling).

Good managers also try to fathom the strengths and weaknesses of employees. Capable employees can earn more for the company (and themselves) when they take on more responsibilities or more complex tasks. A good manager tries to figure these things out and sometimes has better intuitions that employees (though sometimes not).

Pay is just part of the process. Sometimes pay is low but experience gained is high. For an artist or animator, an internship at Pixar is worth far more than the pay. Debaters who intern at Cato, Heritage, and other think tanks, expect to gain from the experience and hope to apply their research and analytic skills (in between photocopying and proofreading).

So how much should NFL cheerleaders be paid? Through experience, NFL teams discover how much they have to pay for the appearance, cheering, and public relations skills they want. Charles Murray argued, in reference to teaching, that sometimes paying more money attracts people more interested in money than in the great joy and satisfaction of teaching. Paying more for teachers also attracts men more interested sports and summers off than dedicated and passionate about teaching.

Management has the hard task of sorting through job applicants and deciding what pay levels attract and keep employees best able to work with others on the team to deliver quality goods and services. If managers do a poor job, upper managers or company owners replace them. And if upper management and owners can’t hire the right managers to hire the right employees, then the whole company can fail, and its capital, managers, and workers are released to take or search for other employment opportunities.

If the NFL can’t figure out how to manage its players, fans will move on to other sports or to other hobbies and leisure activities.

This Institute for Faith, Work, and Economics article, Why Does Income Inequality Exist, discusses many of these issues.