Professional baseball, football, and basketball players make good money in the US. In 2018, 218 players made at least $14 million, not counting endorsement income. In comparison, 200 CEOS made at least $14 million in 2017. But it’s not just star athletes out-earning star CEOs: over the last few years, the average pay for NBA, MLB, and NFL players has been between 10-30 times the average pay of CEOs. So why such hand-wringing about the “outrageous” pay of CEOs but virtually none about the pay of professional athletes? Why the double-standard?
For one thing, athletes produce something of obvious value to many people. CEOs don’t – it’s hard to visualize and appreciate “shareholder value”. It’s also clear that professional athletes work hard for their money. Less so CEOs, whose high pay is sometimes attributed to financial trickery. Another reason has to do with a broader grievance. Think corporations are evil? Chances are you’re also outraged by CEO pay.
It’s no surprise, then, that fewer Republicans are disturbed by CEO pay than Democrats. To better understand why, consider the following Pew Research findings:
More Democrats than Republicans say:
Economic inequality in this country today is a very big problem
The economic system in this country unfairly favors powerful interests
More Republicans than Democrats say:
Most people can get ahead if willing to work hard
They are generally satisfied with their finances
Life for people like them is better compared with 50 years ago
Their family has achieved, or on the way to achieving, the American Dream
My takeaway from these survey results is that how we feel about disparities in income and wealth has a lot to do with how much we think:
People have control over their circumstances
Luck figures in life outcomes
The rules of the game are fair
People deserve what they get
Of course, one can think in general the rules are fair and people deserve what they get - except in the case of the super-rich. But I bet a general faith in the system dulls the edge of outrage.
References:
Feather, N. T. and R. Sherman (2002). "Envy, Resentment, Schadenfreude, and Sympathy: Reactions to Deserved and Undeserved Achievement and Subsequent Failure." Personality and Social Psychology Bulletin 28(7): 953-961. (Basically, low personal control = high resentment towards undeserving high achievers).
Smith, H. J., T. F. Pettigrew, et al. (2011). "Relative Deprivation: A Theoretical and Meta-Analytic Review." Personality and Social Psychology Review 16(3): 203-232.
Testa, M. and B. Major (1990). "The Impact of Social Comparisons After Failure: The Moderating Effects of Perceived Control." Basic and Applied Social Psychology 11(2): 205-218. https://www.tandfonline.com/doi/abs/10.1207/s15324834basp1102_7