Income inequality is a hot topic in theoretical economics and an even hotter topic in the theater that is American politics.
If you “feel the Bern” or if you tune in to any debate, the rich getting richer and the common man getting screwed is a continuous drumbeat. So short of having a PhD in economics or a master’s degree in finance, it’s easy for some to get suckered into resentment. Thankfully, we can turn to the world of sports to provide a contextual overview of income inequality.
In 1975, the Hall of Famer Kareem Abdul Jabbar (formerly known as Lew Alcindor) was the highest-paid player in the NBA, earning a whopping $450,000. That’s a jaw-dropping $2.79 million in today’s dollars. Stated another way, the NBA’s all-time leading scorer, six-time MVP, and six-time world champion was making the equivalent of less than $3 million per year today.
That same year, the average NBA player earned $90,000, and the league minimum was $30,000 per year. How was the common man fairing at this time? U.S. median household income was $13,379, and a security guard working in a sports arena, making $3.50 per hour, was bringing in $7,280 annually.
In terms of income inequality and executive pay ratios, Kareem was making 5X the average salary of an NBA player and 15X the league minimum. In terms of the global issue of inequality, Jabbar was making almost 34X the national household income average and 62X the lowly arena security guard.
So how has the income landscape changed in the last 45 years in the NBA? And more importantly, why?
The highest-paid player in the NBA this year based on salary is Stephen Curry, a two-time MVP and three-time NBA world champion. Curry will make $40 million this year despite having played in only four games to this point because of injury. The ten highest-paid players in the NBA will earn a collective $371 million in salary, or an average of $37.1 million per player. The league average is $7 million, and the NBA minimum salary is $582,100.
So interleague, how has the NBA fared? The top player’s ratio to the average salary is holding constant at about 5.5X the average, but the ratio to the minimum salary in this star-driven league has widened to an alarming 68X the league minimum.
Even more concerning are the NBA salaries in relation to the average U.S. household income, a.k.a. the common man, and also to the lowly security guard. Over the same 45-year period, the ratio of the top NBA salary to the average U.S. median household has risen from 34X to almost 630X. As concerns the top salary in relation to a lower-profile member in the same organization—the security guard—the ratio has surged to a staggering 2,900X in 2020, from 62X in 1975.
Income inequality is defined as an extreme disparity of income distributions with a high concentration of income usually in the hands of a small percentage of a population. Clearly, the NBA checks all the boxes.
So what are some of the root causes of the NBA’s inequality dilemma? In a star-driven league, there are only so many stars. How many human beings can shoot the 3-point shot like Steph Curry? In the history of the NBA, only one player has ever made a higher percentage. LeBron James, a 16-time All-Star, four-time MVP and three-time NBA champ, is an athletic freak of nature who could have played virtually any professional sport of his choosing. Giannis Antetokounmpo is among the rarest of athletic specimens in a league of extraordinary athletes. The subset of the population that is seven feet tall, runs the length of the court in three seconds, makes 55% of shots attempted and averages 30 points and 14 rebounds per game is a very tiny group of human beings—thus the nickname “The Greek Freak.”
Curry, James and Antetokounmpo demonstrate the concept of “hierarchies of competence.” In every discipline, exceptional contributors emerge. Such contributors create value and growth. While fortunate circumstance or chance may be a contributing factor, this is the exception and not the rule. Generally speaking, competency and timing combine. Bill Gates created the Windows Operating System as personal computers became standard issue. Mark Zuckerberg co-created Facebook (kind of) just as social media was taking hold of our phones. The NBA, with the players’ union, signed a massive new media rights deal as established networks and burgeoning new media entities like Facebook, Amazon and Netflix were breaking the bank in search of original scripted and non-scripted content for global consumers.
A lot of this income “success” is a result of good old-fashioned hard work, discipline and dedication. To obtain this “hierarchy of competence,” players put in hours at the gym, work with strength coaches, endure physical therapy, employ shooting coaches, keenly focus on diet and rest, and sacrifice other endeavors in order to master their craft. They made it to top of the high school food chain, the college food chain and now the NBA food chain. In short, the NBA is a meritocracy. Natural selection is a force in their profession and in their income.
The NBA has an income inequality issue, and nobody is complaining about it—not the average veteran making $7 million, or the journeyman making that league minimum of $582,000, or even that arena security guard or die-hard NBA fan who gets an up-close-and-personal view of some truly great entertainment—because the NBA has created value that makes many of our lives just a little more enjoyable. So thanks, Bill Gates, for giving us unlimited knowledge and access at our fingertips, and thanks, Mark Zuckerberg, for keeping us informed about our high school reunions. And thank you, Warren Buffett; you have made a lot of shareholders, including us, a lot of money over your 70 years at Berkshire. Are we jealous of your obscene wealth? Sure, but you earned it. We have no reason to be resentful. It’s the same for the NBA.
A visionary commissioner, a global marketplace, a collaborative relationship between the union and owners, the fortunate advent of original content and sports gaming, and one quickly forgets the income inequality issue in the NBA. Instead, we focus on the expansive economic growth created for all. Rather than an obsession with the gap between the top and the bottom, we focus on what the NBA has done over the past 45 years, which is to create a lot more millionaires.
This appeared in Forbes on March 5, 2020.
Senate Bill 2534, sponsored by Sen. Walter Michel, would allow for the direct shipment of wine to a house.
Mississippi is one of seven states that currently prohibit the shipment of wine to a house, meaning consumers in most states enjoy this freedom. This would end that prohibition.
This, however, is just one small part of the state’s desire to regulate, and in many cases, prohibit, legal alcohol sales in the state.
While the internet, technological developments, and more have made the purchase and production of alcohol freer and easier in other states, Mississippi has denied its citizens personal liberty on this issue.
The state has discouraged craft beer production, overregulated alcohol distribution, and cracked down on the ability for citizens to privately produce alcohol. Permits are difficult to secure, and thus many businesses have been left in the dark, unable to expand or operate.
Mississippi could make considerable strides by entrusting in its citizens a greater personal responsibility and freedom when it comes to alcohol sale and production.
There is much the state could do, but this is a step in the right direction.
MCPP has reviewed this legislation and finds that it is aligned with our principles and therefore should be supported.
Read SB 2534.
Track the status of this and all bills in our legislative tracker.
Senate Bill 2534, sponsored by Sen. Walter Michel, would allow for the direct shipment of wine to a house.
Mississippi is one of seven states that currently prohibit the shipment of wine to a house, meaning consumers in most states enjoy this freedom. This would end that prohibition.
This, however, is just one small part of the state’s desire to regulate, and in many cases, prohibit, legal alcohol sales in the state.
While the internet, technological developments, and more have made the purchase and production of alcohol freer and easier in other states, Mississippi has denied its citizens personal liberty on this issue.
The state has discouraged craft beer production, overregulated alcohol distribution, and cracked down on the ability for citizens to privately produce alcohol. Permits are difficult to secure, and thus many businesses have been left in the dark, unable to expand or operate.
Mississippi could make considerable strides by entrusting in its citizens a greater personal responsibility and freedom when it comes to alcohol sale and production.
There is much the state could do, but this is a step in the right direction.
MCPP has reviewed this legislation and finds that it is aligned with our principles and therefore should be supported.
Read SB 2534.
Track the status of this and all bills in our legislative tracker.
Mississippi became one step closer to legalizing the cultivation of hemp after it easily passed the House this afternoon.
The debate was lengthy, many questions were asked, amendments offered, but in the end the Mississippi Hemp Cultivation Act passed 105-9. The nine voting against the bill were all Republicans: Reps. Jim Beckett, Donnie Bell, Scott Bounds, Jill Ford, Bill Kinkade, Sam Mims, Ken Morgan, Karl Oliver, and Troy Smith.
Ford, a Madison Republican, offered a toxic amendment that would require any hemp plants “that are processed for use in medicinal products or products that are ingested or applied to the body must be grown and cultivated in organic soil.” This would mean soil that does not contain man-made contaminants, something Rep. Tommy Reynolds (D-Charleston), the author of the bill, said would render the law useless and unworkable. The amendment was tabled on a voice vote.
A near identical bill has been offered in the Senate where legalization stalled in 2019, and was turned into the task force that met last year. But momentum is on the side of legalization.
If that is true, this would just be part of a national trend.
We have seen a massive move toward hemp legalization at the state level after the 2018 Farm Bill expanded the cultivation of hemp. Previously, federal law did not differentiate hemp from other cannabis plants, even though you can’t get high from hemp. Because of this, it was essentially made illegal. But we did have pilot programs or limited purpose small-scale program for hemp, largely for research.
Now, hemp cultivation is much broader, with the Farm Bill allowing the transfer of hemp across state lines, with no restrictions on the sale, transport, or possession of hemp-derived products. There are still limitations, but most states have taken the opportunity to find new markets for those who would like to cultivate hemp.
In fact, hemp cultivation is legal in 47 states today. Mississippi, Idaho, and South Dakota are the lone holdouts. And the South Dakota legislature Ok’d hemp legalization last year, but it was vetoed by Gov. Kristi Noem.
The act will be effective after passage, something supporters hope will allow farmers to cultivate hemp this growing season.
A committee in the Mississippi House gutted what could’ve been a big reform to the state’s civil asset forfeiture system.
House Bill 1398 is sponsored by Rep. Dana Criswell (R-Southaven) and would’ve put caps on what kind of property that state and local governments can acquire via civil asset forfeiture.
The House Judiciary B Committee rewrote the bill (known as a committee substitute), removed the caps, and changed it to end a practice where law enforcement or prosecutors could request a property owner to waive their rights to their property, often in exchange for charges to be dropped. The new language in the bill will also change the burden of proof for forfeiture to clear and convincing evidence.
The original bill would’ve had greater impacts. It would’ve exempted from civil asset forfeiture:
- Homestead real property.
- Currency totaling $500 or less.
- A vehicle with a market value of $2,500 or less.
According to the most recent analysis of the civil asset forfeiture database by the Mississippi Center for Public Policy, of the 353 seizures in 2019, 118 of them of them had a total value of $2,500 or less.
There were 41 vehicles seized by law enforcement with an average value of $5,091 in 2019. Of those, 29 would’ve been below the cap set by Criswell’s bill and would’ve have been eligible for forfeiture.
Despite the narrative that civil asset forfeiture is a vital tool for busting big drug cartels, most seizures are small in size. Only three seizures were $60,000 or more in 2019 and 177 had a total value of $10,000 or less.
Right now, state and local law enforcement agencies can seize any property without limits or a cap, even if the property owner hasn’t been charged with a crime. If prosecutors can prove in civil court, with a lower burden of proof, that the property has been used in the commission of a crime or is the proceeds of a crime, a judge can rule in favor of the seizing authority to take title to the property.
Then the property can be reused by the seizing agency or sold, with the proceeds split 80 percent between the seizing agency and 20 percent to the attorney (either a district attorney or one from the Mississippi Bureau of Narcotics) that took the case to court.
For the property owner to prevent their property being forfeited to law enforcement, they must file a lawsuit. That happens seldomly, as only 39 property owners contested the forfeiture in court (11.04 percent) in 2019.
In 2018, 30 property owners filed suit to recover their property, or 9.52 percent.
Bills that were introduced in both the House and the Senate to allow the sale of wine in grocery stores died Tuesday without being considered in either chamber.
House Bill 981, sponsored by Rep. Brent Powell (R-Flowood), and Senate Bill 2531, sponsored by Sen. Walter Michel (R-Ridgeland), would have allowed wine to be sold in grocery stores, while providing up to six permits. You are currently limited to one permit.
New establishments, including Costco in Ridgeland, Whole Foods in Jackson, and Sam’s Club in Madison, have separate establishments that sell alcohol – essentially their own liquor store attached to their main store, but not a place you can access without leaving the main grocery store.
Most grocery stores can’t or won’t take on what is an unnecessary burden.
The opposition to wine in grocery stores is very loud, and obviously influential with legislators. And they don’t even hide what they are trying to do. It is liquor stores who don’t want competition, and everyone in Jackson knows that. But it shouldn’t be the job of the legislature to pick winners and losers. Coupled with the Department of Revenue who says we can’t handle the capacity of the wine needed to stock Kroger and Walmart (maybe we should remove the state from the alcohol distribution business), you have a pretty dangerous one-two punch that has outgunned citizens who overwhelmingly favor this idea.
It is abundantly clear that most Mississippians who don’t have a vested interest in the status quo want change. They are tired of having the government make life decisions for them and would prefer that they have the ability to decide if, when, and where they purchase wine.
Wine sales in grocery stores are legal in 39 states, including Alabama, Louisiana, and Tennessee. But it will remain illegal in Mississippi, at least in 2020.
We did, however, see some movement on other alcohol freedom bills:
- SB 2534 would authorize the direct shipment of wine. It cleared the Senate Finance committee after a reverse repealer was placed on the bill, ensuring it comes back from the House. A much narrower bill, HB 1088, that would allow you to have wine shipped, but only to a liquor store, passed the House Ways and Means committee.
- HB 4 would increase the number of liquor store permits you can have.
- SB 2552 would remove the prohibition on how much alcohol a craft brewery can sell on its premises.
A gang bill in the Mississippi Senate is intended to combat the rise of gangs in the state’s penitentiaries but could cost taxpayers billions by increasing the state’s prison population after several years of decline.
Senate Bill 2459 — sponsored by state Sen. Brice Wiggins (R-Pascagoula) — would add additional penalties for felonies (up to 15 years in prison and/or a fine of between $10,000 and $15,000) committed as part of a gang on top of the original sentence. It would also render those convicted of being in a gang as ineligible for parole and earned time. Wiggins’ bill also would make criminal gang activity a violent crime even if the underlying offense committed is non-violent.
Also, the burden of proof for convicting one of criminal gang activity would be a preponderance of evidence, a lower evidentiary standard that is used in civil court. This is below the standard required for criminal court, which is beyond a reasonable doubt.
With that kind of language in the bill, the number of those considered gang members under the law would increase, swelling the prison population along with longer sentences. Using data from the Mississippi Department of Corrections at a cost of $39.91 per day to house each inmate, each 15-year sentence for gang-related felonies would cost between $44,000 and $218,000 per prisoner. If the 11,917 state prisoners that the MDOC identified as gang members had been sentenced under the language in Wiggins’ bill, the state could've added up to $2.6 billion in additional costs.
Passage of SB 2459 will also undo many of the criminal justice reform efforts that have lowered the number of those incarcerated while cutting the amount spent by taxpayers on corrections.
In January 2014, before the passage of House Bill 585, the state’s inmate population was 22,008. Violent offenders made up 34.7 percent (7,632 inmates) of the prison population. As of January 2020, the state’s prison population is 19,057 and violent offenders (9,410) represent 49.38 percent of it. That still ranks Mississippi the third highest nationally, trailing only Louisiana and Oklahoma.
According to testimony given by Chief Justice Mike Randolph to the Joint Legislative Budget Committee, taxpayers have saved $452 million in incarceration costs since the passage of HB 585 in 2014.
A similar bill in the House, HB 816, will likely die without making it out of committee. State Rep. Fred Shanks (R-Brandon) authored the House version.
Another problem with SB 2459 is there is already existing law governing gangs on the books in the Magnolia State.
The Mississippi Street Gang Act was passed in 1997 and allows the state Attorney General, district attorneys, or a county attorney to bring a civil case against any gang (defined as three or more persons with an established hierarchy that engages in felonious criminal activity).
The existing law also proscribes that anyone convicted a felony committed for, directed by or in association with a criminal street gang would be imprisoned for no less than one year and no more than one half of the maximum imprisonment term for that offense.
Those selling or buying goods or performing services for a gang could face the same punishment as above and an a possible fine of up to $10,000.
The owner of large medical cannabis cultivator in Arkansas is funding a legislative push to challenge the medical marijuana ballot initiative that will be in front of voters in the fall.
Mississippi law allows legislative alternatives to appear alongside ballot initiatives, and multiple alternatives have been introduced. If an alternative was adopted, the legislature would be tasked with creating a medical marijuana program in 2021, something they haven’t exactly shown an interest in over the past two decades.
They haven’t even approved the cultivation of hemp, though highly regulated bills are pending in both chambers.
The difference between the initiative and what some legislators want is obvious. The initiative is a Constitutional amendment that writes a very clean, market based program into law. Legislators wouldn’t be able to make changes or tightly regulate the program as they have done with the CBD oil program. But the alternative puts the ball back in the their court, allowing the legislature to create a small program, with limited options, that may or may not be operating any time in the foreseeable future.
There are four such concurrent resolutions in the legislature, with three in the House and one in the Senate, though House Concurrent Resolution 39, by state Rep. Trey Lamar (R-Senatobia), appears to be the resolution that is moving. It is highly restrictive and limited, allowing for a "limited number of state-licensed manufacturers," while permitting the Board of Health and similar opponents of medical marijuana to design what they would like.
Since they are resolutions and not bills, they only require approval of the legislature and don’t need the signature of Gov. Tate Reeves to appear on the ballot.
Where does Steven LaFrance, the owner of Natural State Medicinals in Arkansas, fit in this? His attorney, Alex Gray, recently told Marijuana Moment that LaFrance would like to see licensing caps and a “merit-based” licensing scheme. Sounds a lot like HCR 39.
The ballot initiative would allow those who fit within the regulations to open a business in Mississippi in a free market system without caps or state preference. Essentially, if you follow the law, you can open a business and be in business if you can make money. But the restricted access would likely play very well for LaFrance, who wants to enter the Mississippi market.
At this point, Mississippi will likely have medical marijuana after the November elections. It’s just a matter of what that program looks like. For LaFrance, he seems to understand very well how business is often conducted in Mississippi - by currying favor with legislators and limiting competition.
House Bill 985, sponsored by Rep. Dan Eubanks, would prohibit the Department of Health from regulating who can discuss general weight loss programs. This would allow entrepreneurs who are knowledgeable about nutrition and healthy lifestyles, even if they are not registered dietitians, to earn a living.
Yesterday, the Mississippi Justice Institute announced a lawsuit challenging the Department’s ban on speech about weight loss after Donna Harris was threatened with jail time and fines for offering weight-loss tips to happy customers.
Donna has a bachelor’s degree in nutrition and is a certified personal trainer. Her life passion is sharing information about nutrition and physical fitness. After leaving the workforce to raise her daughter at home, Donna was looking for a new career that would allow her to balance her work and her life as a busy mom.
As a local fitness instructor, she had already attracted a loyal following. Her clients knew Donna was passionate and knowledgeable about nutrition and physical fitness, so many began turning to her for weight-loss advice. Some even suggested she start private classes, offering to pay for her services. So, Donna decided to make the plunge. She would become an entrepreneur. She began offering an eight-week weight loss program at the beginning of 2020 and had 70 participants signed up immediately.
Donna’s website included disclaimers that she wasn’t a registered dietician, and that she would only be providing weight loss strategies and would not be offering information to treat specific medical conditions. And Mississippi law specifically exempts people offering “general nutrition information as to the use of foods, food materials, or dietary supplements” from the licensure requirements. The Department claimed that Donna and others are only allowed to provide government-approved guidelines, such as the Food Pyramid and myplate.gov, not provide the advice she was offering. To satisfy the state, and avoid jail time and fines, Donna would have to complete 1,200 hours of training that she doesn’t need or have the time to complete.
This legislation would allow Donna and others like her to earn a living, while decreasing our state’s regulatory burden.
MCPP has reviewed this legislation and finds that it is aligned with our principles and therefore should be supported.
Read HB 985.
Track the status of this bill and all bills in our legislative tracker.