Sunday, July 5, 2020

Is The NBA’s Reopening a Warning Sign for the U.S. Economy?

Tyler Cowen makes the case in his July 4th Bloomberg column that the failure of some NBA players to return to work has implications for the rest of the workforce:

Key snippets:
As a fan of professional basketball and a student of economic game theory, I am becoming increasingly concerned. I fear that the NBA, in particular, may be reflecting a still-hidden trend in the broader economy: People may not actually be so keen to return to work.

The NBA is planning to resume a fragment of its regular season, and then the playoffs, in a custom-tailored “bubble” in Orlando, Florida, on July 30. The games will be played only among the top teams in a single complex, with regular testing and tight regulations governing the entry of outsiders. The league is going to the maximum lengths possible to ensure a safe reopening.

There’s only one problem: An increasing number of players do not seem very interested in being guinea pigs in this experiment. At first the secessions were a trickle. Now they are picking up steam.

Davis Bertrans, arguably the second-best active player on my home team the Washington Wizards, will not play because he doesn’t want to risk injury and endanger his prospects as a free agent next season. That’s an entirely reasonable excuse, and more and more players are finding them....

These players will still be paid, but they are lowering their future market value by expressing less than a full commitment to the team. And it is hard to imagine that many other workplace environments can be made much safer than the planned NBA bubble...

In the normal business world, the superstars — in this case, the CEOs and other leaders — are indeed eager to resume and expand operations. But as with the NBA, the grumblings beneath the surface are real and growing.

How well will business reopenings go? If you wish to track the American economy, professional sports has never been a better place to look.
I am not sure Tyler has this right. Two facts stand out:

1. Some are apparently holding out because they don't want to injure themselves in an airball of a season when they have a big free agency contract in front of them.

2. According to Tyler, they will continue to get paid even if they don't play!

These are not circumstances that your average worker faces.

There are no big free agency contracts dangling in front of workers next year.

They are not going to get huge payments by just sitting at home (unless Trump extends the mad federal unemployment payments).

The NBA world and the rest of the labor force are two different worlds.

The NBA employment situation is not an indication as to what will occur in the rest of the economy.


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