The wage gap and the WNBA

Recently I have noticed a proliferation of discussion surrounding the current gap in earnings between NBA players and WNBA players. It has often been linked to the “gender-wage gap” a myth purported by politicians and ideologues, which is define as is the measured difference between male and female earnings, usually expressed as a percentage of male earnings. It has been debunked time after time but still persists in public dialogue.

Looking away from basketball for a second, there are a number of factors other than sexism that contribute to a gap in EARNINGS (note the word earnings, as opposed to an hourly wage rate). Not only is there the “Equal Pay Act” of 1970 that prevents discrimination in terms of pay based on gender (making it illegal to pay men and women differently for the SAME work), but the wage gap statistic commonly parroted out by ideologues is NOT based on identical work. The wage gap takes into account other factors such as gender differences in jobs, hours worked, years of experience, education attainment or other personal choices that people make about their careers, as opposed to gender discrimination.

There are many economic arguments that explain the differences in earnings between men and women. Men on average work longer hours and hold more full-time positions than women do. Of course if men work longer hours on average, they are going to earn more on average. Additionally, women take longer breaks from the labour market. This is exemplified when women take maternity leave, it often becomes harder to achieve promotion when re-entering the job market. The ages at which women tend to take breaks from the labour market are usually the ages in which careers “take off” with promotions and rapid increases in wages. Increased female participation rates in economies has increased the supply of labour which may have contributed to lower relative wages.

A diagram showing that an increase in labour supply from S1 to S2 reduces the wage rate by (W2-W1)

However, the most important factor that contributes to a difference in earnings between the genders is that women tend to choose occupations that pay less. Occupations in the service sector such as clerical, caring, cleaning and caring are predominantly female and have relatively low wages. Some will argue that women tend to work in these sectors because of gender roles that reinforce the idea that these occupations are suited for women. However, evidence seems to contradict this claim. In Norway, described as the top country in the world for gender equality by the World Economic Forum, there still exists a phenomenon known as the “Norwegian gender equality paradox,” where gender-segregated labour markets persist in gender equality-oriented welfare states. In more gender-equal countries like Norway, men and women STILL choose to study different subjects, shying away from high paying fields in STEM (Science, Technology, Engineering, and Mathematics). This indicates that it is not gender roles or social pressures that push women into low-earning vocations, but rather that women on average choose to follow low-earning career paths.

Moving back to the WNBA, it is very easy to dismiss the WNBA players claims of pay discrimination based on gender. To put it simply, they are competing in different arenas against different opponents for different prizes, which does not constitute equal work. In economics demand for labour (which in this case is basketball players) is a derived demand for goods and services generated by that labour. To put it simply, as there is more demand for the NBA, whether that be tickets sales, TV contracts or merchandise, they generate more revenue, justifying a much larger wage for their players. The vast difference between the total revenue of the NBA ($7.4 billion) and the WNBA ($25 million) is a prime example of this. If the WNBA paid the same average wage to their players as the NBA does ($6.2 million per annum) then they would not even be able to field one team of five players without making a loss. Even if they paid the their players lowest wage in the NBA of $838,464 (sorry Brad Wanamaker of the Boston Celtics) they could only field 5 teams without making a loss, meaning seven other WNBA teams would have to fold.

The second argument posited from WNBA stars is that they aren’t being paid enough money based on the revenue coming in. Las Vegas Aces power forward A’ja Wilson took to twitter to complain that NBA players receive 50% of the leagues’ revenue whilst WNBA players get 30%. This however, has nothing to do with gender discrimination or their gross income compared to NBA players. Instead, it has everything to do with the current WNBA collective bargaining agreement signed in 2014. This expires in 2019, so if the WNBA stars wish to receive a bigger slice of their own pie then they should seek better union representation and secure a better collection bargaining agreement, as opposed to airing out their grievances on social media.

All in all, the WNBA does not generate enough revenue to justify higher wages for their athletes. If people wish to see a rise in the wages of WNBA players, they need to start watching WNBA games, buying tickets to see the WNBA and buying merchandise from WNBA players, which will translate into higher wages for the leagues’ athletes.