If there was one critique I have ever heard about sports players, is that they are paid too much, and there is no justification in doing so. Football, soccer, and basketball players are paid millions every year to play with a ball while people like surgeons and soldiers do good deeds like saving lives and defending our nation, yet only dream to be paid like Peyton Manning. Most people would say this is wrong. However, when one is observing the economic market, they must understand that the economic market is amoral, and how much a person is paid depends on their human capital.
Human capital, simply defined, is “the sum total of skills embodied within an individual.” Basically speaking, how much you are worth to a business is how much you will get paid by that business. There is a reason cashiers at McDonalds do not get paid much. There is not much human capital needed for that job, so consequently they will be getting paid minimum wage. However, Peyton Manning has an indispensable amount of human capital when it comes to being a quarterback. There is only one Peyton Manning, and that is why the Denver Broncos gave him a 96 million dollar contract.
This fact of human capital can be seen outside football. For example, talk show host Glenn Beck signed a radio deal with Premiere Networks for 100 million dollars. This is because to the world of talk radio his human capital is worth 100 million dollars. If I decided to start a radio show, I would be lucky if someone signed me on for free. This is because I have no human capital in the radio business. However, there is not another talk show host like Glenn Beck. That is why he is being paid 100 million dollars; his human capital in radio is irreplaceable. With doctors and nurses, that is not so much the case.
Quite a decent amount of people can be a nurse, the human capital for that job is required can be fulfilled by a lot of people, that is why the average salary for a nurse is around 66,000 dollars. However, there is more human capital needed to be a brain surgeon, and fewer people can meet the requirement of human capital for a neurologist. That is why neurological surgeons on average have a salary of almost 500,000 dollars. The pay of a surgeon is not like a sports player. More than one person can become a brain surgeon, but only one person can throw a football like Peyton Manning, only one person can “bend it like Beckham,” and only one person can perform a talk show like Glenn Beck, and that is why people like football players get paid more than doctors.
Follow Caleb Casto on Twitter @Caleb_Casto.