Examining Income Inequality

Dr. Mark J. Perry of Carpe Diem fame did an interesting examination of income inequality among NFL players and teams.  The article appears at The Enterprise Blog.  To wit:

Rising income inequality in the NFL has not come at the expense of either the lowest-paid or the median-paid player. The minimum NFL salary increased by more than 22 percent between 2000 and 2008, from $241,300 to $295,000 in inflation-adjusted dollars. Further, the median inflation-adjusted NFL salary increased by more than 52 percent between 2000 and 2008, from $601,775 to $930,600.

In other words, despite the increasing income inequality in the NFL, all players (lowest-paid players, players earning the median salary, and those earning the highest salaries) were better off in 2008 than in any previous year. Likewise, even poor and middle-class Americans are better off today than ever before, despite the fact that income has become more concentrated, and the share of income going to the highest-paid 20 percent of American households has increased from 43.6 percent in 1967 to 50 percent in 2008.

Dr. Perry’s analysis shoots some holes in the assertion that rising income inequality signals that more and more people are being denied an opportunity at the “American dream.”  In fact, it would seem that the rising tide does lift all ships in this case.

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