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NFL Players Association vs. Typical Unions

CAP’s David Madland argues that the ongoing labor dispute between the National Football League and its player’s union demonstrates how much better off non-professional-athlete workers would be if they were unionized.

But the fact that the players are able to bargain on equal footing with the owners is directly relevant to our economic fate. One of the contributing factors to our current economic situation is that most workers—unlike the NFL players—are not able to negotiate on relatively equal footing with their employers as part of a union. That’s why workers’ wages have stayed flat for decades, instead of rising alongside their companies’ profits.

[...]

Since 1993, when the basic structure of the current agreement between players and owners was first hammered out—with free agency and a salary cap—league revenues have grown by 10 percent or more in most years, rising from $1.7 billion in 1993 to $7.6 billion in 2008. Before players secured the 1993 contract, they received a far smaller share of league revenues than they have in recent years, taking home 41 percent of revenues in 1991 and 47 percent in 1992.

While the exact division of revenues between players and owners in any new contract remains a point of contention, two points are clear: Players now receive a significant share of the revenues that they help create, and the owners accept that players should.

If only this were the case in the rest of the economy.

Most workers even before the current recession helped their companies by becoming ever more productive but did not share much in the gains. From 1980 to 2008, nationwide worker productivity grew by 75.0 percent while workers’ inflation-adjusted average wages increased by only 22.6 percent. This means workers were compensated for less than a third of their productivity gains.

The problem with this reasoning is that Madland elides a rather fundamental distinction:  In professional sports, as in the rest of the entertainment industry, the workers are the primary product being sold.   That’s simply not true in most industries.

Unionized workers are, with rare exception, interchangeable. Nobody knows who screwed the motor into their car, inspected the stitching on their blue jeans, or ensured there were precisely two scoops of raisins in their cereal.  Those jobs are important and help their firms make a profit.  But the individual workers who perform those tasks come and go without the ultimate consumer knowing or caring.

By contrast, most everyone knows who quarterbacks the New Orleans Saints and Indianapolis Colts.  Sports leagues market their star players — who command the lion’s share of the player cut of league revenues — and sell themselves as featuring the best of the best.  If the League locked out the current players and attempted to play games with replacement players — which happened in 1987 — people would notice the difference.   (Interestingly, Saints head coach Sean Payton was a quarterback for the Chicago “Spare Bears” during the three-game stint before a deal was reached and regular players returned to action.)

An NFL franchise employs 53 players (45 of whom may be active on game days) plus up to 8 more on their practice squads.  There are 32 franchises, so that’s 1440 regular players plus 256 practice squaders who make a relative pitance.  That’s not a lot of labor for a multi-billion dollar a year industry.

Like actors and musicians (who are also represented by unions) the marquee talent get most of the money paid to workers because they’re the draw.  While using a different welder on a car frame won’t impact Ford’s bottom line, substituting an attractive brunette from the local community theater for Sandra Bullock, the guy who sings on the street corner for Prince,  or Joe from the docks for Peyton Manning would significantly impact ticket sales.  Similarly, the bottom dozen players on the roster — who Bill Parcells referred to as JAGs for “Just A Guy” — get the NFL’s version of minimum wage, as do the bit players in films or the session players on music recordings.

In fairness, Madland’s analogy isn’t entirely wrong.   Sports owners have been forced by labor laws and court decisions to bargain in good faith with their players.  It wasn’t all that long ago that even superstar players had to accept whatever the boss deemed fair.  And the various player’s unions have negotiated better working conditions, pension plans, injury settlement practices, and minimum scales for rookies and veterans.  Further, the ability to negotiate these things collectively rather than on a player-by-player basis has doubtless made some things easier for owners, too.

But the United Auto Workers will never have the power of the NFL Players Association so long as it exists mostly as a way to negotiate for unskilled and semi-skilled workers.

(It’s worth noting that there are all manner of other differences between the sports business and, say, manufacturing — including the ability to control supply, having most of the revenue streams guaranteed years in advance, and probably all sorts of things I’m forgetting or simply don’t know.  But that’s tangential to the point of this post.)

Link via Matt Yglesias

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About James Joyner
James Joyner is the publisher of Outside the Beltway, an associate professor of security studies at the Marine Corps Command and Staff College, and a nonresident senior fellow at the Atlantic Council. He's a former Army officer and Desert Storm vet. He has a PhD in political science from The University of Alabama. Views expressed here are his own. Follow James on Twitter.

Comments

  1. Brian Knapp says:

    One small consideration here is that for the entertainment industry (which includes professional sports), collective bargaining benefits the little guy much, much more than it does the star.

    Drew Brees will be rich no matter what and he will get optimum care for injuries, etc. Same with Sandra Bullock, because, like you mentioned, they are more companies/brands unto themselves that have an inherent following. Thus, they will receive accordingly.

    But even though most of us know the top three or four players on each team, or we know the stars of each movie, we most certainly don’t know the other 50 players/actors on the team. And especially in the case of actors, they won’t receive one tenth what the Drew Brees/Sandra Bullocks receive.

    Just like most jobs.

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  2. yetanotherjohn says:

    So what major thing happened between 1980 and 2008 that drove up productivity so much? Was it smarter, more educated workers? Did workers develop superhumen strength or speed?

    It would seem to me that computers, embedded or on the desktop, was probably the single most important factor in driving up productivity in those years. So why should the workers get a lions share of the productivity increase profits if they weren’t the primary cause.
    Put another way, compare two companies thinking about adopting a new technology. One will give half the resulting profit increase to workers and the other gives a third. Simple math means the company giving half will have a lower return on investment than the company giving a third. The lower ROI raises barriers to implementing the change. The result is that the company who gives a third to workers is more likely to upgrade, thus gain productivity and then start distancing them selves from the other country by turning the increased productivity into higher profits and/or market share. The company giving half becomes incrementally more likely to fail and toss all the workers out.
    There is a reason that Marxism is a failed economic system.

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  3. James Joyner says:

    Brian: Quite right. I touch on that in the post but don’t make the point explicitly.

    John: Good point. Companies have increased productivity by getting rid of employees — or replacing lots of semi-skilled employees with machinery and one skilled employee — just as agriculture got more efficient by replacing muscle with machines.

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  4. sam says:

    @YAJ

    It would seem to me that computers, embedded or on the desktop, was probably the single most important factor in driving up productivity in those years. So why should the workers get a lions share of the productivity increase profits if they weren’t the primary cause.

    Perhaps because these computers are not Cylons? It takes human beings to use the things, after all. The computers by themselves did and do poop.

    Maybe not the lion’s share, but something a bit more that the monkey’s share, read ‘peanuts’, that they did get.

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  5. Brian Knapp says:

    I tough on that in the post but don’t make the point explicitly.

    Yes, I agree. The point is rather implicit, but certainly there. I just thought that it was worth re-iterating.

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  6. 11B40 says:

    Greetings:

    1) Back in my days studying labor economics, one of the important concepts was the difference between “industrial” and “craft’ unions, the former being lower skilled workers and the latter higher skilled.

    2) It strikes me as misguided that professional athletes, with their accountants, mangers, agents and lawyers are seen as being at some disadvantage in dealing with their employers. They are way different than “industrial” Joe or even “craft” Joan.The current NLRB structure basically allows them two bites at the negotiating apple.

    3) In my basketballing days, one of the bits of folk wisdom was that the professionals were being so much because they were being paid for all the hours those who didn’t make the pros put in.

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  7. yetanotherjohn says:

    Sam,
    You apparently don’t get the concept of ROI. Let’s take a real world example of productivity, namely the grocery store checkout.
    In 1980, the checkout relied on a person putting a tag on each can of peas, another person reading the tag and entering it into the register, and a third person going through the aisle to count the cans of peas left to determine if more needed to be purchased.
    Now one person can monitor 4 self checkout stations. The tags are eliminated and the inventory is automated with the computer noting each sale to know when to order more.
    So 4 checkout lanes probably needed a price tag afixer, 4 checkers and an inventory counter to do the job of the one self checkout monitor and some computing power capital (which included personel to write software but once written can be applied to checkout lines across the country).
    Does your view of economics say the one remaing employee in the above scenario should get 6x the wages because they are doing the job of 6 people?
    The wages earned will reflect the cost of hiring and retaining a person capable of doing the job, not how many jobs it took before automation.
    Yes, there is a person to run the computer. But the productivity increase is not due to that person, but rather to the automation.
    So why should the company pay a larger share of the 6x improvement in the above example to the employee?

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  8. sam says:

    The fact is, with those increases in productivity, the folks at the top got most of the financial benefits. All I said was that I would hope that some larger portion of those benefits would flow to the workers. You and I will never agree on this obviously. But I will say that, as a prudential matter, it would be better for all in the long run if the rewards of advances in productivity were spread a little more evenly.

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  9. An Interested Party says:

    Sam, you do realize that kind of thinking might get you labeled as a “socialist” by many in these parts…

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  10. [...] The NFL Players Association, James Joyner suggests, is not your typical labor organization: An NFL franchise employs 53 players (45 of whom may be active on game days) plus up to 8 more on their practice squads. There are 32 franchises, so that’s 1440 regular players plus 256 practice squaders who make a relative pittance. That’s not a lot of labor for a multi-billion dollar a year industry. [...]

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