At the beginning of the baseball season, many sports pundits predicted that the Boston Red Sox would easily win the American League pennant and the World Series, given their extraordinary array of talent and management's willingness and ability to spend significant amounts of money. After their complete collapse this month, sports writers have begun to conduct their inevitable post-mortems. Indifference, poor team chemistry, poor conditioning and a lack of intensity - of "fire in the belly" - have been cited to date. By contrast, the Tampa Bay Rays, a significantly poorer franchise with an indifferent fan base, exhibited all of the qualities the Red Sox lacked - team spirit, intensity, clutch performances - during the critical stretch toward this season's end.
Does the performance of the Red Sox have a broader message about the American economy? Is it possible that the economic inequality played a role in the Red Sox's implosion?
The 2011 Boston Red Sox had the third highest team payroll - $160, 257, 476 - among major league teams. By contrast, Tampa Bay Rays, which erased 9.5 game lead as the Sox collapsed during the month of September, had a combined payroll of $41,932.171 which was the second smallest among the thirty major league teams.
The salary differential among Red Sox players was a equally startling. Among those who performed most poorly for the Sox this season were outfielders Carl Crawford, who was paid $14,857.00 and had been signed to a multi-year $128 year contract, J.D. Drew, who earned $14,000,000, and pitcher John Lackey, who was paid $15,950,000, despite his abysmal record. Among the successful performers were Jacoby Ellsbury who earned $2,400,000 for his extraordinary year, and pitcher Alfredo Aceves who was paid, by a major league standards, a piddling $500,000 for his 10-2 won-lost record as a invaluable middle reliever.
Among Tampa Bay players, the disparity in compensation was significantly less. Veteran player Johnny Damon, who had a relatively successful year, was the top wage earner at $5,250,0000 while Jeremy Hellickson, who was productive as a reliever, earned $418,4000.00, which salary was reported to be $4,000 more than the lowest paid player of the Tampa Bay roster, Elliott Johnson.
The salaries of even the least well paid professional baseball player are 100 times greater than the median wages of ordinary American workers but, in some ways, the disparities in salaries disparities between the Red Sox and the Rays mirror the economic inequality of the overall U.S. economy.
In 2006, a year before the current economic implosion began, the richest 1 percent of the American population then enjoyed the highest share of the nation's adjusted gross income as reported during the previous two decades, while the average tax rate of the wealthiest 1 percent fell to its lowest level in at least 18 years. It was also reported that the income of the 400 wealthiest Americans increased in 2006 almost 23 percent from 2005, to an average of $263 million. Further, the top four hundred wealthiest Americans paid slightly more than $18 billion in federal income taxes, or an average of $45 million on a record $105 billion in total income--the lowest effective rate in the 15 years since the IRS began to release such information.
In September of 2010, Forbes Magazine announced that the collective net worth of the nation's wealthiest four hundred persons had risen $290 billion above the previous year to $1.37 trillion. This staggering concentration of wealth was greater than the total wealth held by the bottom 50% of all U.S. households. This month, Forbes reported that the assembled net worth of America's wealthiest had risen by an additional $16 billion - to $1.53 trillion from 2010.
In what ways has the American economy benefited from this staggering inequality? The wealthy and their political defenders deny that inequality is a problem and suggest that, if only the Untied States were to lower its personal and corporate tax rates, reduce the marginal tax rates on passive income even further, and allow the hundreds of billions of dollars currently held by U.S. corporations offshore to be repatriated with little of no tax consequences the American economy would boom and jobs would be created.
The evidence from the eight years of the Bush administration, which enthusiastically enacted policies favorable to the wealthiest and to corporations, shows that such arguments are nonsensical. The Bureau of Labor Statistics announced that, as of March, 2011, there were 130.738 million payroll jobs in the U.S. as opposed 130.781 million payroll jobs in January 2000. This phenomenon occurred despite the addition of some 17.2 million Americans who were added to the potential workforce during that decade. This month, the U.S. Census Bureau reported that the median household income in the United States in 2010 was $49,445.00 , a 2.3 percent decline from the 2009 median.
Much like the lackadaisical performance of the wealthiest Red Sox players, the data suggest that the very wealthy in this country have, since the onset of the current recession that they helped to create, hunkered down and intend to preserve their wealth while they await better opportunities for themselves. They share little sense of obligation or commitment to alleviate the suffering of their fellow citizens.
Their pursuit of their own self-interest and their inability to understand that citizens in a democracy have obligations to one another are as deadly to the overall health of the American economy as was the unwillingness of a number of the most highly paid Red Sox players to give their very best for benefit of the team on which they played . Analogously, the success of the Tampa Bay Rays suggests that, when given the opportunity, the means and the hope, ordinary working Americans, unlike the very wealthy, will successfully stoke the engine of American economic success.