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College Football and the Power of Highly Skilled Labor · Mechonomist Podcast

• 0:00
  SPEAKER_00: Good morning, everyone.
• 0:02
  SPEAKER_00: Today, I'm at the beach on vacation and I've been thinking about skilled labor.
• 0:08
  SPEAKER_00: And I think that a good example of how powerful skilled labor is, is college football.
• 0:14
  SPEAKER_00: So for the longest time,
• 0:16
  SPEAKER_00: college football players could not be paid to play
• 0:20
  SPEAKER_00: because they were considered amateur athletes.
• 0:22
  SPEAKER_00: But in 2021, the Supreme Court ruled nine to zero.
• 0:26
  SPEAKER_00: That college football players could be paid for their name, image, and likeness.
• 0:33
  SPEAKER_00: And it was considered that they would take advertising dollars
• 0:42
  SPEAKER_00: and make money off that.
• 0:43
  SPEAKER_00: But what ended up happening is it just became pay-for-play.
• 0:47
  SPEAKER_00: There were no rules.
• 0:48
  SPEAKER_00: They're not considered employees yet.
• 0:51
  SPEAKER_00: They could transfer from one school to the other at any point in time,
• 0:54
  SPEAKER_00: almost at any point in time.
• 0:58
  SPEAKER_00: And the result was that college football players gained a great deal of power over the sport.
• 1:07
  SPEAKER_00: And so much power
• 1:09
  SPEAKER_00: that they were putting already struggling athletic departments totally in the red.
• 1:14
  SPEAKER_00: So to give you an example of how much A athletic department would spend on name,
• 1:20
  SPEAKER_00: image,
• 1:20
  SPEAKER_00: and likeness with how much,
• 1:22
  SPEAKER_00: not necessarily athletic department, but how much NIL commitment there was.
• 1:28
  SPEAKER_00: The University of Oregon has the largest NIL commitment, and it's almost a billion dollars.
• 1:33
  SPEAKER_00: So college athletes were putting so much pressure on athletic departments
• 1:37
  SPEAKER_00: and boosters that they have gone to Congress to attempt to rectify the situation.
• 1:45
  SPEAKER_00: So there's a new A bill in Congress called the Save College Sports Act,
• 1:51
  SPEAKER_00: and it essentially puts a cap on how much these skilled laborers can make in
• 1:58
  SPEAKER_00: a given year and whether they can move from school to school almost at will.
• 2:05
  SPEAKER_00: What it shows you is that the demand for highly skilled laborers Is so high.
• 2:12
  SPEAKER_00: And this is a unique situation because these athletes are some of
• 2:17
  SPEAKER_00: the most talented athletes in the world,
• 2:19
  SPEAKER_00: but there's thousands and thousands of them.
• 2:21
  SPEAKER_00: I mean, there's college football has,
• 2:24
  SPEAKER_00: you know, 170 something school, 113 or 120 something schools in division one.
• 2:31
  SPEAKER_00: And there's even more in the lower divisions.
• 2:34
  SPEAKER_00: So there's thousands and thousands of athletes and they're all, uh,
• 2:39
  SPEAKER_00: Capitalizing on the demand for their services.
• 2:42
  SPEAKER_00: Some athletes are making up to four or five million dollars a year.
• 2:46
  SPEAKER_00: So it is a unique situation,
• 2:47
  SPEAKER_00: but it does show that when there's a pure market,
• 2:51
  SPEAKER_00: a market with zero regulations,
• 2:53
  SPEAKER_00: as conservatives always want to have,
• 2:54
  SPEAKER_00: as libertarians always want to have,
• 2:56
  SPEAKER_00: is that the demand for skilled labor outstrips capital's ability to pay it.
• 3:02
  SPEAKER_00: So I guess my argument is,
• 3:05
  SPEAKER_00: is that One of the ways,
• 3:07
  SPEAKER_00: one of the contradictions of capital is this,
• 3:10
  SPEAKER_00: is that
• 3:14
  SPEAKER_00: skilled labor is worth more than capital's ability to make a profit.
• 3:23
  SPEAKER_00: And in other sports like the NFL or Major League Baseball or NBA basketball,
• 3:30
  SPEAKER_00: it's highly regulated through collective bargaining,
• 3:33
  SPEAKER_00: salary caps, Contracts and other stuff like that.
• 3:40
  SPEAKER_00: And it ultimately works to put a limit on how much athletes can make,
• 3:45
  SPEAKER_00: these skilled laborers can make.
• 3:46
  SPEAKER_00: Because again,
• 3:48
  SPEAKER_00: there's a contradiction in capital that skilled labor outstrips the ability
• 3:54
  SPEAKER_00: of capital to make a profit.
• 3:56
  SPEAKER_00: So I think Marx worked through contradictions in the system of capital.
• 4:02
  SPEAKER_00: And I think this is another contradiction that we could look at,
• 4:06
  SPEAKER_00: the contradiction between skilled labor and profit.
• 4:09
  SPEAKER_00: And I think it applies to other types of skilled labor like auto techs.
• 4:14
  SPEAKER_00: The only reason that auto repair is even moderately affordable is because
• 4:19
  SPEAKER_00: of widespread wage theft in the automotive industry.
• 4:24
  SPEAKER_00: And I'll get into that in my book.
• 4:27
  SPEAKER_00: But yeah, that's, again, college...
• 4:31
  SPEAKER_00: College athletes can be paid now and there's no restrictions in the market
• 4:36
  SPEAKER_00: and it's breaking athletic departments and boosters and they have gone to Congress
• 4:41
  SPEAKER_00: to rectify the situation to put more regulations on the market because the demand
• 4:48
  SPEAKER_00: for that skilled labor has outstripped the ability of capital being profitable.
• 4:53
  SPEAKER_00: And we'll see y'all next time.
• 4:54
  SPEAKER_00: Thank you.