Why Lionel Messi Is Paid More Than Nurses
It is apparently a great outrage that sports stars earn more in a week than a nurse will in a lifetime. Lionel Messi is the highest paid soccer player in the world at the time of writing, earning €16 million a year. A nurse, on the other hand, will earn only €20-30 thousand a year. You don’t need to do any complex calculations to figure out that that’s a staggering inequality. Is it justified?
Those who would say ‘no’ would argue it on two accounts:
1. The nurse’s job is more necessary to human health, and therefore noble, than a soccer player, and should be rewarded as such.
2. The nurse puts in more hard work.
Firstly, should wages be set by how ‘necessary’ or ‘noble’ a job is? €16 million does seem an obscene amount of money for what is essentially kicking a ball around a field. And €20-30 thousand, in comparison, seems a paltry amount for a service that very often saves lives.
Let’s imagine that the roles were reversed: that Messi earned a nurse’s wage and all nurses earned Messi’s wage. Obviously, the pure numbers of nurses would make that salary un-sustainable. But even if the salaries were made more equitable, an increase in the nurses’ salaries would create a shortage.
Why do you think a bottle of water is so cheap and a Gold watch so expensive? The bottle of water is altogether more necessary for your existence than a Gold watch is, but it costs less. According to the value judgment theory of prices, water should be expensive and Gold watches really cheap. But where would that leave us? In short: thirsty.
Nobody feels sorry for the water companies, yet they provide a vital service to the community. Most of us understand that water bottles need to be cheap so that everyone can get water when they need to. Why does that need to change with nurses? They are very necessary for the survival of the species, and there therefore needs to be many of them and easily available.
Nurse are incredibly necessary – when they were less abundant, people were willing to pay large amounts of money. Our demand for nurses has brought a lot of them into the market, and the more of them there are the lower the wages will be in order to compete. They are so necessary that the market has made it easier for nurses to get the skills necessary in order to perform it. However, a too lower wage and not enough of them will be drawn into the profession. There needs to be equilibrium. Anything else will result in either a shortage or an over-abundance.
Messi’s incredible salary indicates a large demand but a short supply. Only Messi can be Messi. As of this moment in the 2012/13 Spanish League season, he has scored 46 goals for Barcelona Football Club in 31 games. Anyone familiar with soccer understands that this is an incredible achievement, as a top-level striker would be satisfied with a goal every other game in the top leagues.
Only Christiano Ronaldo, who plays for rival club Real Madrid, can boast anywhere close to that kind of record (33 goals in 31 games).
Other than the financial reward from the trophies he is largely responsible for, he is extremely productive because people enjoy watching him play, and will pay a premium to watch him live and on subscription television services. They will buy his jersey, his boots and the products he endorses, increasing the productivity of hundreds of businesses. This one man has worldwide influence, to a point where his loss would mean the loss of hundreds of jobs.
Messi might just be “kicking a ball around a field”, but the demand for the way he kicks that ball, and in what direction, is incredibly large, and covers the entire world.
One nurse is only in demand within the local area, as there are many who can do the job equally well.
Opponents of the inequality must look at football fans if they wish to change it: somehow you will have to convince those hundreds of thousands of Barcelona fans to support smaller teams, cancel their satellite TV subscriptions and stop buying jerseys. Without changing this demand, any intervention in the market will result in too few nurses and too few soccer players.
The biggest lesson we can learn from this is that prices are economic calculations, not judgments upon their ‘necessity’ or ‘nobility’. It is not the job of the economist to argue that Messi is somehow nobler than the nurse. The nobility of any particular profession is in the eye of the beholder. Prices are governed by abundance, and after all, there is only one Lionel Messi, one Lionel Messi . . .
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