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Tuesday, April 3, 2007

Income Inequality by Position, MLB

I recently wrote about the increasing income inequality for MLB here, showing an increasing share of total income over time for the top 1%, 5% and 10%. Further analysis shows increasing income equality by position from 1988 to 2006, it appears that most of the income gains over time have gone disproportionately to first basemen and third basemen. Notice for example that:

1. In 1998, the average first baseman made 1.38 times as much as the average second baseman, and by 2006 that ratio had increased to 2.55 times.

2. Between 1998 and 2006, the average salary for first basemen increased 8.61 times, compared to an increase in average salary of only 4.66 times for second basemen.

3. First basemen in 1988 made 48% more than catchers (lowest paid position), and in 2006 first basemen made 155% more than the lowest paid position (second basemen).

4. The overall salary range by position increased significantly from 1998 ($362,000 to $537,000) to 2006 ($1,816,000 to $4,632,000).

Speculation: To the extent that income inequality has increased for both the general population and in MLB (and other pro sports) over time, it is possibly a natural phenomenon resulting from an increasingly competitive, globalized environment? Perhaps the greater the intensity of the competitive process, the greater the degrees and level of competence, resulting in a natural increase in income inequality?

For example, wouldn't we expect income inequality to be greater in the 21st century than in the 18th century?

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