Is a Person’s Salary Always Justified?

One million dollars per year.

For an assistant football coach.

In college.

In a memo released today, assistants at University of Michigan set a new standard for college football coach salaries, with three — offensive coordinator Tim Drevno, defensive coordinator Don Brown, and passing game coordinator and assistant head coach Pep Hamilton — each making $1 million for the next three seasons. There are also bonuses that each coach is eligible for each year. Michigan head coach Jim Harbaugh made $9 million this year, overtaking Nick Saban, Alabama’s head coach who made $6.9 million.

The first thought I had when I saw these numbers was “You’ve got to be kidding me.”

But then I thought about it for a while, and my second thought was “You’ve got to be kidding me.”

After finally calming down, I thought, if the school is willing to pay that much, then the salaries must be justified.

While many people may argue that they are underpaid for the work they do, is it possible that there are people who are overpaid?

Here are some examples of some of the highest paid people in recent years.

David Tepper, a hedge fund manager, made $4 billion, in one year.

Soccer superstar Cristiano Ronaldo earned $88 million in 2015.

Comedian Kevin Hart earned $87.5 million in 2016.

Are all those earnings justified?

Some people may say that if they can earn it, then they must be worth it.

But I have a problem with that argument.

I’m sure part of my problem is jealousy; I certainly wouldn’t mind earning $4 billion in one year. But that’s only part of it.

I just finished reading the Grapes of Wrath, and while the story is set in a different time, the issues are still highly relevant. There were significant differences in wages between the haves and the have-nots back then, and significant problems for the have-nots to become part of the haves. Those problems still exist today, and are perhaps even worse.

I’ve written a few times about the Ovarian Lottery, and I’m convinced the biggest predictors of financial success are when, where, and to whom you were born. And all of those factors are pure luck. Think of a basketball player; they tend to be much taller than the general population, but as they say, you can’t coach height – it’s pure luck.

Certainly it takes more than just being born lucky to become successful; hard work and talent are important traits as well. And while there are individual cases of financially successful people who have not won the ovarian lottery, the odds of doing so are quite, quite slim.

So if that is the case, it’s hard to make an argument that high salaries are justified when a big determinant of such high earnings is luck.

I am sure there are football coaches as qualified as the three Michigan football coaches, but are only earning five figures doing similar work. But it could be that because of circumstances outside their control, they didn’t happen to be at the right place at the right time to take advantage of such an opportunity,

I’m also bothered by the fact that such a salary is being paid at a college. I’m certainly not the first to express outrage at how much money is committed to college sports; these salaries just add more fuel to the fire.

If the primary mission of a college is education, why are coaches usually the highest paid employees at many colleges?

So while it is an impressive feat to be paid $1 million as an assistant coach, that doesn’t mean it’s justified, or that it’s the right thing to do.

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Jim Borden

Accounting Prof. at Villanova; happily married for 30+ years; father of 3 outstanding young men; vegan; interests: fitness, creativity, education, blogging, social media.

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