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Why do footballers earn more than soldiers, doctors, and teachers?

The economy operates in 2 key sectors: the public sector and the private sector.

  • The public sector refers togoods, services and professions owned by the government, for instance: NHS hospitals, state schools, and police. The public sector is funded by tax revenue.
  • The private sector is the part of the economy not under government control, and is usually run by individuals and companieswith the aim of making a profit.

The government can regulate private companies to an extent if they are overcharging consumers, for instance by setting maximum prices and taxing them. However, companies are generally in control of the wages they pay their employees and the mark-up they make on their goods. 

The wages firms pay their employees depends on the demand and supply of labour. For instance, employees are paid more if there is a low number of workers available who can do the job. If there are not many people who can do a particular job, the firm will have to keep raising the wage until the people with the right skills are willing to accept it. The workers can be more choosy about the job offers they accept, because they know they will not struggle to find work elsewhere when demand is high. The firm will be willing to pay the worker a high wage as long as the worker will generate a high income for the firm.

Why do footballers earn more than soldiers, doctors, and teachers?

  1. Because footballers work in the private sector  

  2. There are very few extremely talented football players 

  3. If a football player is unhappy with the wage they are offered they can easily find another club willing to pay them millions 

  4. All of the above 

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Anjali


Anjali Garg is an IGGY student mentor and a final year Economics student at the University of Warwick. 

She particularly enjoys industrial economics, which is the application of economics to firms, markets and industries. This is because she hopes to work in many different industries in the future before starting her own business. She's also interested in environmental economics and is writing her dissertation on the effect of temporarily legalising the ivory trade on elephant poaching.

 You can message Anjali at @Anjalig and see more about the Student Mentors here.