Economist Writing Every Day

The NFL has filed a grievance against the players union, alleging a conspiracy to fake injuries on the part of running backs to gain greater leverage in salary negotiations. To grant necessary context as succinctly as possible: running backs carry the ball while giant humans attempt to harm them. They do this 15 to 30 times per game. They are important to team success, but not as important as they once were. At the same time, they incur significant traumatic and cumulative damage, resulting in the shortest expected career length of any position in professional football. The NFL has a cap on total team salaries negotiated between the players union and the owners group/cartel/partnership. Running backs have seen their salaries decline even as the damage incurred as become more apparent and measurable. This raises an interesting question: where are the compensating wage differentials for risk? Everyone gets paid more if their job is dangerous. Do running back wages reflect their physical risk?

Supply and demand always come first, and any explanation for the (relative to other positions) decline in running backs salaries has to start with declining demand. Running backs are viewed as less valuable, more interchangable than they once were. At the margin, the returns to employing the best running back relative to the 30th best running back are viewed as thinner than in earlier eras. And that could be 95% of the answer, but it’s worth investigating the supply side as well.

The understood risk of injury facing running backs has increased. With greater risk typically comes less labor supply, the shifting equilibrium pushing wages up. Is this what we are seeing in football? Are fewer athletes interested in being a running back? Are running backs retiring earlier? Maybe, but that can cut both ways, reducing supply and demand.

But the supply side has multiple dimensions: both players entering the market (the “extensive” margin) and the amount they are willing to play (the “intensive” margin). Has the injury “threshold” shifted for running backs who are now less willing to play while already carrying significant damage? Because that’s exactly what I think we are seeing. I think running backs are beginning to reduce the amount of their bodies’ usable careers they are willing to sell at the current market price. They have reduced supply on the intensive margin. Running backs are demanding greater compensating wage differentials for risk and the owners don’t like it. They thought the supply of running back labor would remain almost perfectly inelastic under the terms of the collective bargaining agreement, but they were wrong.

Now, is trying to organize a collective reduction in labor supply in order to better negotiate compensating wage differentials fair play on the part of the players? Absolutely. Why do I say absolutely? Because they are not only bargaining against a cartel of owners, they are implicitly bargaining against the rest of the players association, who have failed to deliver compensation for their risk, at least in part, because the rest of the players, the non-running backs, benefit from every dollar under the cap not spent on running back salaries.

I’ll put it bluntly. Everyone has the right not to supply their labor. Everyone has the right not to incur physical risk and damage if they aren’t being sufficiently compensated. Organizing to collectively restrict that supply is fair game, triply so if there are explicit (the owners) and implicit (the other players) groups that are collectively organizing against you.

I’ve seen NFL games. I know how much you’d have to pay me to carry the ball once on an NFL field, let alone dozens of times every week. If I wasn’t getting paid my reservation wage, there is no collective bargaining agreement you could wave in my face, no public shaming, no pressure from fans that could get me on that field.

All the collective bargaining in the world can’t make the laws of supply and demand go away. Professional sports are a labor-intensive industry, and football is a high risk endeavor for labor. If you want millionaires to show up every week to willingly endure the equivalent of a half-dozen car accidents, you’re going to have to pay them. Oh, but you can’t pay them that much, they’re a depreciating asset since the damage incurred shortens their career? Good point, the price just went up. You don’t want to commit to long term contracts because injury can end a career on any play? Good point, the price just went up. We have a big game this week, we need …you…to…ohhhhh

Now you’re getting it.