NFL Income Inequality: It Just Keeps Getting Worse

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According to a new report from the Census Bureau, the top 20% of American households earned 50.3% of the total income in 2009, just slightly higher than the 50% share of income for the top fifth of households in 2008. Looking at a longer period of time going back to 1967 when the top quintile earned 43.6% of all income, the share of income going to the top fifth increased throughout the 1970 and 1980s, until stabilizing in the 49-50 percent range in the mid-1990s.

Using NFL salary data from USA Today, the shares of total team payrolls going to the highest-paid  20% of players in 2000 and 2009 are displayed in the chart above for all 32 teams. The average share of NFL payrolls going to the highest-paid 20% of players in 2009 was 62.4%, higher than the 59.5% share in 2008, and much higher than the 56.3 percent in 2000.  Between 2000 and 2009, income inequality increased for 27 of the 31 teams that played in both years. 

For the second year in a row, the Indiana Colts led the league in income inequality, with just two players (Kelvin Hayden at $17.5 million and Peyton Manning at $14 million) capturing more than 30% of the total team payroll of $103.4 million in 2009. Top-paid Kelvin Hayden's salary was a whopping 56.4 times more than his lowest-paid teammate, Rudolph Hardie, who made the NFL minimum of $310,000. That would mean that Kelvin Hayden was paid almost as much for each quarter of regular-season play ($273,125) as Rudoph Hardie made for the entire season. (How can that be fair?)

In other words, there is significantly greater income inequality in the NFL than in the general U.S. population, with 62.4% share of team payrolls going to the top fifth of NFL players in 2009, compared to 50.3% of total national income going to the top quintile of American households. And while the share of income going to the top 20% of U.S. households has been constant for more than a decade, payroll inequality in the NFL keeps increasing each year.

What are some of the lessons we can learn from the escalating income inequality in the NFL?

Find out here at The Enterprise Blog.