The full version of the question is “Why are some professions that require almost irreplaceable skills paid much less than others in the same general field?”
The standard line is that salaries are a function of the supply/demand curve plus a few other factors but that doesn’t seem to hold for a few rather odd exceptions. Two examples that I can think of off the top of my head are MLB, NFL and NBA coaches versus top level players and television writers versus actors.
The first case is rather odd but it is generally expected that management (MLB, NFL and NBA coaches in this case) should make more money than the people under them but that isn’t true at least for the top level players. Don’t get me wrong, none of them are anything less than extremely rich but I would like to know why that top level players demand several times more money per year than the people they report to even among the most long-term, successful coaches. There is some part of the law of supply and demand that I am missing because extremely successful coaches are much more rare than moderately good players yet the latter regularly make more money than they do.
The other example is television writers for very successful shows. Again, I know they aren’t poor in the least but the success of the show depends on the quality of the writing for both individual episodes and the overall story-line. There are a few superstar writers that move between shows and either make or break their success but even those only make a fraction of the mid-level pay for a moderately popular actor.
Supply and demand. Lots of people can write. Few people can write such that every single script is a success. (often because the director and other people determine if a good script is successful or not)
Why are airline pilots paid so poorly, less than truck drivers starting out? High supply. Everyone wants to fly a plane.
Ditto for video game developers.
This is why plumbers and electricians - dirty jobs that a large number of people could learn to do - pay 60k a year.
I don’t know the economics of it, but I can think of several situations where a multi-million dollar business had one employee who knew so many different aspects of the job that if they quit things would probably grind to a halt or at the very least be very troublesome for several weeks/months. Those people were not paid extremely well either, they had middle class lives but not reflective of the fact that they were integral to businesses that did 7-8 figures in business a year.
Shag is talking about people who get *consistently *paid less than their apparent worth. Not just in terms of how important their job is, but how many people out of the population are capable of doing it.
Only so many people can fly an aircraft well. It’s obviously a difficult and complex skill (the computers flying the plane is a myth) and also requires you to meet high medical standards. (or lie about em, but that’s another matter)
Only so many people can write video games. It’s a ruthlessly difficult programming job that is a lot harder to perform than software developers in other industries, yet video game devs usually make less. I’ve read on forums I frequent that it’s not uncommon for developers to leave their game industry job for an offer that pays twice as much.
While it’s true that being an electrician or a plumber is an important job, the needed intellect and manual skills are relatively modest. But you need to climb into hot attics, deal with sewage, etc. Nobody wants to do it.
The visibility is part of the value for some jobs.
When a producer pays 20 million dollars to get Big Name Actor, he’s not just paying for the acting skills, he’s paying because he knows that once BNA is onboard, his project will gather more investment and talent. He also knows that lots of moviegoers choose based on actors, not writers. If moviegoers picked movies mainly based on writers, writers would get a major income boost.
Not that when a movie director becomes famous enough for people to watch movies based on the fact that he directed them, he gets a major income boost too.
Much the same for athletes: Fandom, viewership, TV deals, ads, endorsements tend to follow athletes, not coaches.
Why do moviegoers and sports viewers tend to go for actors and athletes rather than writers and coaches? I hypothesize that most people don’t research what they consume much and just base their decisions on what’s immediately and easily visible and comprehensible.
Tl, dr: It’s called showbusiness for a reason. The nature of movies and sport matches is to show actors and athletes more than writers and coaches.
I think in this case you’re over-estimating the irreplaceability factor. The reality is that the average viewer doesn’t know or care who the show’s writers are. They may feel a show is good or bad but there’s rarely a direct perceived link to the writers.
This puts the writers at a disadvantage. Let’s use Friends as an example of a show that was a major success. If you’re Jennifer Aniston or Matthew Perry, you could threaten to leave the series and the producers would have to consider the possibility that viewers might stop watching the show without you. But if you were Ted Cohen or Shana Goldberg-Meehan and you threatened to leave the show, do you really believe the viewers would follow you if you left? The producers would just bring another writer in and your absence wouldn’t be noticed. At worst, viewers might think “This show isn’t as funny as it used to be” but it would take a long time for any effect in the ratings to be noticed.
To some degree this is changing, with the show originators/producers/writers being fairly famous in their own right. I’m thinking about people like Matthew Weiner, Ronald Moore/David Eick, Shonda Rhimes, David Chase, David Benioff/DB Weiss, Kurt Sutter, Vince Gilligan, Frank Darabont, Joss Whedon, etc…
While they’re not necessarily as important in a show that’s up and running, they do draw a certain amount of attention to shows they’re developing, now that they’ve all struck it big. You have to admit that the next Vince Gilligan show will get a lot of scrutiny because he’s the guy who came up with and shepherded “Breaking Bad” through its run.
No one goes to games to watch Phil Jackson or Gregg Popovich sit on a bench or yell at referees. Even if the team is trash people will show up to watch Jordan, Kobe, LeBron, etc.
It’s still just supply and demand. Assume that to have a good basketball team, you need a lot of good players and a single good coach. Basketball then seems to create more demand for players than coaches. High demand leads to higher prices, so the demand for lots of good players would push up their wages.
But what about supply? I’ll bet bet lots of really good players could make equally good coaches. Phil Knight is a good example – he was a pretty good player and an amazing coach. In fact, that probably suggests that lots of people who didn’t play amazingly well might still be very good coaches. So basketball players are in fact also a really good supply line for coaching talent.
But, for most of Phil Knight’s coaching career, he probably would have made a terrible player because he was too old. Aging limits the supply of good basketball players. But the career of a coach can be much longer, so there is less constraint on coaching supply. So great coaches are generally cheaper than great players because they are both in lower demand and greater supply than great players.
I found the following info:
Celebrity net worth: Vince Gilligan $15 million, Bryan Cranston $30 million, Aaron Paul $16 million, Dean Norris $5 million, Anna Gunn $4 million, Betsy Brandt ± $2 million, RJ Mitte $2.5 million, Bob Odenkirk $2.5 million, -
So he’s doing better than everyone except the main two actors, but yeah considering Aaron Paul was a new comer in Breaking Bad and Vince Gilligan has been around since X-Files in 1996 he’s definitely getting paid less than the actors.
You might find it interesting to look into this concept: economic rent. Economic rent is basically the amount of money someone can charge for something that is beyond the objectively justifiable cost or even what they would be willing to do the job for.
I came across the concept in this article from the National Post, which talks about a study that looks at jobs that can get away with large economic rents. It may provide some context for what you’re asking.
“Extremely successful” coaches are rare because the number of coaching positions is tiny, not because the talent pool is small. For the most part, the only true metric that highly paid coaches offer is prior success. There is almost nothing they do that isn’t easily duplicated.
Anyway, your premise is incorrect. Sean Payton is the highest paid coach in the NFL at $8 million per year. That is more than all but the top 5-10 players at every NFL position except quarterback. Furthermore, Payton’s contract is fully guaranteed, while NFL player contracts typically guarantee no more than a third of their full value.
NBA coaches are paid substantially less (up to $4 million a year) and the players earn substantially more, but the coaches are still earning more than the majority of players. Of course, NBA coaches are largely interchangeable, because the rosters are much smaller and there are fewer set plays, so coaching decisions have less of an effect.
These guys are famous. But I’d argue it’s because they made the transition to being show originators and producers. In movies, the equivalent transition would be moving from being a writer to being a director.
In the entertainment business, producers, directors, and actors are seen as Names - these are people who have a public reputation that can add value to a series or movie. Writers, on the other hand, are seen as just part of the crew like editors or cinematographers - their contribution to the show are generally invisible to the public.
In a company for which I used to work there was a long serving guy in middle management who was everyone’s go-to guy when there was some obscure technical problem or a customer with some peculiar requirements. They made him redundant and in the canteen, everyone was saying “how will we manage?”
Guess what - everything still worked and some of those unprofitable projects that he had taken on got dropped. Most people could hardly remember his name six months down the line.
People have a market value like goods. Hire a high-flying CEO and the share price goes up, so he is worth the $Millions. Same thing in sports.
Of course, there are many people who are paid much less than they are worth. Probably because they are not actively looking to maximise their earnings for one reason or another - quite possibly inertia.
Yeah but Producers being drawcards makes no sense at all. usually the producer is the guy that gets the funding for a film. So a film being promoted as “from the producer of XXXXX” is equivalent to saying, its the guy that got the bankroll together. And? There is no other connection. It would make much more sense to promote “from the writer of XXX” but part of the problem is that screenplays for modern hollywood movies are usually doctored by so many people that it’s not really possible to credit a single writer.
But top coaches in college are paid for their ability to recruit, as well as their ability to win. Players are paid for their ability to produce, but also for their ability to draw fans.
True, a company’s IT guy may know a lot more about keeping the business running day-to-day, but a company’s top salesperson not only brings in money, but equally important, keeps it from going elsewhere. If I had to choose between one or the other, I’d keep my salesperson happy and get ready to train someone in IT.
Most college football programs generate zero or negative net revenue. It (perhaps) makes sense for Alabama to pay Nick Saban more than Judy Bonner. It makes no sense for about 110 of the 129 Division I universities to pay their coaches more than every other employee. Anyway, who the fuck cares if a public university is recruiting well? Its mission is to educate, not to win football trophies.