Wealth Redistribution and the Creation of Income and Wealth Inequalities: The Example of American College Football BCS Commissioners and Large Research University Presidents

How is wealth "redistributed" and how do inequalities in income and wealth arise?

The inexcusable inequality of income and wealth in the United States is exemplified by the situation in American college athletics, where hundreds of thousands of young people as athletes compete for no direct compensation (many of course get scholarships), while a handful of ruling university and related elites pocket big money at the expense of these virtually uncompensated student-athletes.

That is the state of the economy in general. Many work for low wages or none at all while a few of the clever ones profit exorbitantly. It is a situation that must change if America is to achieve badly needed reconstruction and renewal, including a narrowing of the gigantic gap between rich and poor.

In last night's college football game between Rutgers and Louisville, the Cardinals' senior cornerback Anthony Conner unluckily broke his neck when he banged his head on an opponent's knee, but as written by Teresa M. Walker, AP Sports Writer at Yahoo! Rivals.com: "the senior is not paralyzed despite the severity of the injury". It is a freak injury to be sure, but it is the bodies of the young people that are on the line in college athletics - just for fun, mind you. (Joe Pa is an exception)

This is a good time to compare the status of college football players in an allegedly "amateur" sport with that of the salaries of BCS college football conference commissioners in that same "amateur" sport.

For some people, the alleged "amateur" sport of college football is really a very good business to say the least, and that applies particularly to BCS football conference commissioners.

Based on 2009 IRS returns, as written by the Associated Press (AP) at ESPN College Sports in Four BCS commissioners made $1M:

"Four of college football's six powerhouse conferences paid their top executives $1 million or more, an Associated Press analysis of tax records shows, far eclipsing the compensation of most university presidents."

In fact, of the 6 BCS conferences, only one conference commissioner made less than the average salary of the median compensation of university presidents at large research universities, a median compensation of ca. $760,000 in 2008. So dear parents of students and student-athletes, you know where some of those outlandishly high tuition payments are going -- straight into the pockets of the ruling elites.

In our view, no conference commissioner should be paid more than 10 times the annual salary of the lowest paid commission employee, earning a minimum wage. That would put a stop to exploitation by compensation quickly. The world is full of competent people who could be conference commissioners at much lower salaries than currently paid. EVERYONE can be replaced -- easily, and at much lower salaries.

Similarly, no university president should be paid more than 10 times the annual salary of a 40-hour a week janitor at that same institution, where a good argument can be made that the latter is equally important as the former. If lawyers went on strike in New York City it would take quite a long time for that to be felt anywhere. When I was in New York City in the 1970's, however, there was a garbage strike, and the impact was immediate, as the stench made the city unlivable in a short period of time. EVERYONE is important, and sometimes, those less-paid are more important than those who are paid more. It all depends on how WE organize societal rules.

I know of no university where the present president could not be removed and replaced immediately with someone equally or potentially equally competent earning 1/20th less than the salary currently paid. Just hire younger people.

Should you doubt that statement - name ONE university president who is irreplaceable. Indeed, name ONE university president who has done something other than fit himself or herself into an already previously existing university culture and its attendant compensation scheme. That takes talent?

In fact, name ONE university president other than the one at your alma mater. Difficult. It is difficult because these people can be replaced, and indeed, ultimately, ARE replaced. ALL of them. But we have nothing against university execs. WE ALL are fungible. That is the way of the world. Hence, there is no excuse to pay exorbitant salaries that are exploitative of institutions and deplete their resources unjustifiably.

Here is an ad one could place for a university president's position at a much lower salary than currently paid, indeed, at 1/10th the current average:

Job Opening: University President at $76,000 per year. We are looking for a well-educated, bottom-line-focused individual with good references to head our institution and move it dynamically forward. You will represent our interests to the outside world. Social skills are a necessity. Future compensation will be based on individual performance and upon achievement of comparable increases for our entire university staff. Fundraising skills and experience are an asset. Only serious applicants willing to work around the clock for the good of our institution need apply.

Would you get any applicants?
Would you get any competent applicants?

Is the mailbox big enough?

The problem is that people are not paid in these elite positions for their actual personal VALUE to the welfare of any given institution-- they are paid whatever "the position pays" to whomever gets the job. Those are two different things. Salaries by "position" rather than by individual "value" are by nature exploitative of the finances of the institution to the benefit of the recipient, in part because it is not the money of the people who select applicants and make the final contracts. It is not "their'" money, it is "only" university money.

The same holds true for the U.S. economy. Once a certain kind of exploitative compensation scheme becomes the status quo in commercial companies and firms, it tends to continue on in existence, and get even more exploitative as it progresses, whether it is needed or not, and whether it is sensible or not. The result is the inequality of income and wealth we see in the United States today. Again, college sports and especially college football are a prime example of this phenomenon.