The fallacy of blaming rich footballers for inequality

There is a persistent belief that the high pay of the few has suppressed the wages of the many. The data says differently, writes Paul Ormerod Inequality has become a persistent theme in politics. And it is currently on conspicuous display in the World Cup.

The players in top teams will each be earning millions of pounds a year. Those in the bottom ranked teams would count themselves lucky to be paid that amount over their entire lifetime, as indeed would most of the viewers on television. These vast payments are a very modern phenomenon.

When England won the World Cup in 1966, stars such as Bobby Charlton had begun their careers when the maximum wage was fixed at £20 a week. No one was allowed to earn more. A decent sum, maybe around £100,000 a year in today’s money.

But many of the current squad will make this in a week or even less. Advances in technology have enabled this boom in top pay. Because of a truly dramatic increase in the level of connectivity in society, highly talented individuals have been able to leverage their talents across global markets and capture rewards that would have been unimaginable in earlier times.

This is certainly the case with stars of popular culture and sport. A hundred years ago, for example, the only people who could have any direct experience of Manchester United – Bobby Charlton’s club – playing soccer live were those present in the stadium during the game. Now, the team can be watched by literally billions around the world, using a variety of delivery channels.

Wage growth since the financial crisis These fortunate and gifted few apart, there is a widespread perception that wages for everyone else have been held down. But both here and in America, the data tells a completely different story. Since the financial crisis, real wage growth has indeed been historically low.

But this is not because of a shift in the overall share of national income from wages to profits. It is because economic growth itself has been historically lo