Public policy, budget prioritization and the money question
Nancy tweeted a Money Question this afternoon on whether we disagree with sports figures earning as much money as they do when there is so much poverty and disadvantaged people struggling to get by.
Daily Money Q to ponder: Are we OK with sports figures earning the salaries they do, while other citizens are in desperate circumstances?
It is RARE that I get asked questions that make my blood boil and that’s perhaps one of them (not because Nancy asked it – Nancy is a very dear friend of mine – it’s because I rarely think about this issue, and when I do, I always get upset).
When I teach Public Policy (both at the undergraduate and graduate level), I always have a lecture on fairness, equity and justice. These are always important topics for decision-makers in designing public policies. Why? Because, with a limited amount of resources you have to do a gazillion things. So you (as a policy maker) need to prioritize. What can I do with these resources and how can I best put them to good use to serve the public interest? What is fair and equitable and just? Is it fair that these sports figures (or politicians) are paid THAT much?
I always ask my students (and whomever listens to me, whenever I give a keynote or an invited talk) to think about issues in terms of trade-offs. If I spend X thousands of dollars on implementing Y policy, then I get Z results (in terms of people taken off the streets, or streets paved, or seats funded for post-secondary education, or litres of water treated). But since resources are scarce, I have to spend them on Y policy instead of W policy, then I am trading off something. I am giving resources to a cause and NOT to another. There’s a zero sum game, where some win, some lose.
For example, think about it this way – if instead of paying multi-million dollar salaries to sports figures (or politicians), you could spend all that money in something else.
Let me give you the figure I used as an example for Nancy (as listed below)
hummingbird604 I do have a firm opinion – it’s stupid. With 1 month Mexican soccer team’s salaries I’d pay 5 years of PhD ed for 100 pple
This time, I’ll do the exercise with the actual salaries I knew of. The office of the wife of the former President of Mexico was spending about $ 300,000 dollars per month (at the time I did this calculation – right now, said office does not exist as far as I know). What would you do with $ 300,000 dollars? Well, I can tell you one thing – given the monthly allowance that Mexican granting councils gave to PhD students at the time (I was doing my PhD then), you could fund the monthly allowance of 300 PhD students with the money this otherwise useless office used. 300. PhD-level, smart, intelligent people. Per month.
Think about it, people. What do you say is the best use of your money? Educating 300 people with PhDs or ensuring that the wife of the President has a nice office and staff for her ‘charity’ work? Whenever I reflect on it, I am always reminded of what my Dad used to tell me – “for the Romans, bread and circuses“. I have the same opinion of high salaries for sports figures.
Now, feel free to let your thoughts pour here 
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couldn’t agree more. there is societal value in entertainment (which is what sports is), but it shouldn’t be placed so much further above valuable professions, things society actually needs (education, basic needs, etc).
although, it could be argued that sports players only make that much because society is more than willing to pay huge amounts to see sports… so maybe people should spend more on necessities than entertainment, but that’s SO not the north american way…
I think we need to remember that its *us* “average joes” so to speak who are funding the sports figures salaries. It’s our combined $40 or $100 etc that we each pay for an afternoon/evening of sporting entertainment. So then the question becomes: Do I want to spend that $40+ on this particular event? (I’m not huge on sports, personally, but I completely get the attraction. I’d spend it on a classic rock concert instead). Put that way, it seems so … harmless, yet the fact is, it does result in a handful of people making the same amount of money that could instead provide education for 100 or more people. I’d be interested if @miss604 weighs in on this. I Honestly GET why, as a culture, we each pay for sporting events, and don’t see anything wrong with it. It just seems to have this unintended consequence.
Sorry, Raul, I’m going to have to disagree with you here. Let me start off by saying that I think sports figures do make far more money than is justified on a variety of grounds (but they are not the only one). However, saying it is a tradeoff with other public policy priorities doesn’t seem quite accurate. The example you give of the Mexican President’s wife is an example of trading off public funds (money for her office versus education, health care, whatever). However, that doesn’t extend to sports figures. Why? For the simple reason that they are paid by private entities and funded by citizen’s making their own economic decision of what to watch and where to spend their money (which in turns drives the advertising revenue). Get rid of sports and that doesn’t suddenly make all that money appear for the public benefit. It will still go to some other private benefit. That is, unless there is a radical shift in priorities. If we could see our great teachers the same way we see sports stars, for example, maybe we would value things differently and maybe we would see broader changes. But that is far removed from paying sports stars less resulting in more money for the public priorities we think are important.
Nomade just made my points for me. I would emphasize, though, the very poor job professional sports teams have done in providing live entertainment for the masses at a price the masses can afford (although the CFL seems to be an exception to the rule). When management and the players say it’s all about the fans, but such a small percentage of fans can see the games live, there’s a disconnect.
That said, sports teams are private. They don’t really have an obligation to serve the masses. They’re just about the money. That’s the problem.
@ Nomade Moderne and @ Jonathon
I’m going to agree and disagree with you both at the same time. First, the agreement – yes, I made comparisons of trade-offs in the public realm and in the private realm.
People purchase sport events tickets and do their own internal trade-off. I was making a point about trade-offs and prioritization, and I will admit that I chose the wrong case study to portray my point.
Now, the point that Nomade is making in his third paragraph is EXACTLY what I was trying to say
My point exactly. IF our society had BIGGER and BETTER priorities, we would probably see private spending shifting away from sports and entertainment. But think about it – I actually made a good point. We are using public funds to loan money so that an Olympic Village is completed (sports event). It’s public money spent in entertainment.
I would make the same observations as above. Perhaps more succinctly: is it FAIR that you as an uninvolved individual be allowed to tell me, the owner of the hockey team, what I can and can’t do with my money?
Your point on public priorities is a good one, but I fail to see how it relates to the theme of fairness, equity, and justice. It relates more to values.