By Teresa Welsh |
The core of the National Labor Relation Board’s ruling is that private elite-level college athletes are “employees” and therefore have the rights common to employees in the U.S. To me as an economist, this decision seems correct: Top football players are recruited, rewarded, and retained for their labor. By contrast, students who receive academic or need-based scholarships are working at their schoolbooks for their own benefit. As private-sector employees, they have the legal right to unionize.
The NCAA enforces a cartel, setting strict limits on how much universities are allowed to reward athletes. It’s clear that for the top players, the cartel prevents athletes from earning the wage they would in a free market. For the many major-sport NCAA athletes who don’t have a lucrative professional future, this means missing out on what could be the highest-paying years in their lives. Colleges collude to prevent high wages; athletes have the legal right to seek a counterweight to the power of the cartel.
However, although the athletes may now be allowed to unionize, doing so might not be in their best interest. Just as economic theory guides us to look past the NCAA protestations that their athletes are principally scholars, economic theory tells us the usual effects of unions: Unions benefit insiders at the expense of outsiders and prevent the most effective employees from earning up to their potential.
An alternative to a perpetual tug of war between cartelized employers and unionized employees is to end the cartel restrictions and allow schools to openly pay college athletes the same way they openly pay research assistants or coaches. Unlike professional sports, college sports have no pretense of parity. The best schools know they need to play games against one another to prove their excellence. That flexible scheduling regime could be maintained under a labor market that freely rewarded great college players.
(For low-profile sports and non-elite football and basketball teams, a free market might look very much like the current system, since the market wage of a promising young fencer is probably less than the full tuition scholarship the college is already allowed to give.)
Sports and education tend to be atypical markets in general, so it’s no surprise that college athletics is a tricky case. Ultimately, it is up to the NCAA and the nation’s colleges to prove that they can create a model of athletic competition that respects the economic freedom of the athletes and remains relevant to their overall goal of providing education services.
About Salim Furth is a senior policy analyst at the Heritage Foundation.