BY Alex Cantatore
Staff Reporter
To the recently graduated Class of 2008, I must first apologize for my delayed commencement column. I’ve been struggling for the past few weeks trying to find the right words to guide you through these wild roads ahead of you.
Sure, I could be like every other commencement speaker in history and tell you that you can accomplish anything you dream of, that the best lies ahead of you, and that there is a Santa Claus, but I’ve decided to take a different tact. Instead, I’m going to talk to you about Ray Allen.
Allen, as I’m sure you know, is one of the most successful Central Valley natives of all time. And if you didn’t, I’m going to lay it out for you.
The 6-foot, 5-inch, starting shooting guard for the Boston Celtics was born at Castle Air Force Base in 1975. At 32 years of age, he is not only is he an Olympic Gold medalist, but also an 8-time NBA All-Star. Allen holds the NBA record for the most three-point shots made in a single season, is second place on the career three-point shots made list, and is the 53rd highest scorer of all time. For this, Allen makes $16 million a year.
Yes, new graduate, your parents were wrong. Instead of studying when you were growing up, you should have been playing basketball.
In 99 games this season, Allen has played for a total of just over 60 hours. Allen averaged almost $270,000 an hour this season. And you thought auto mechanics were expensive.
Now, of course, I understand this isn’t an exact figure. Allen spends countless hours in the gym, working out and practicing his shot, but what does Allen’s basketball brilliance bring to the table that justifies a $16 million paycheck?
As I’m sure you remember from your economics classes, in our capitalist society men are paid according to their worth to other men.
But is the work of any man really worth $270,000 an hour?
By comparison, the best-paid “normal” professions in 2007, according to the Bureau of Labor, were surgeons and anesthesiologists, both of whom pulled in just more than $190,000. And that’s in a year, not an hour.
Of course, not many people complain about surgeons making big money. People would give almost anything to stay alive, and that’s the service surgeons provide to their fellow man.
In fact, if you really stop to consider how much money you’ll make down the road by being alive, doctors should probably charge a lot more for their work.
Of the non-medical professions, Chief Executives are the best paid with an average income of $151,370 per year. CEO Bob R. Simpson of XTO Energy, a natural gas production company, was the best paid CEO in America last year, with a $56.6 million paycheck to his name.
But again, these salaries, while exorbitant, make some sense. CEOs helm companies that pull in millions - or billions - of dollars each year. Because of a CEO’s leadership, thousands of people are put to work and often millions reap the benefits of the products a company sells.
But what do athletes do for us? Why is Ray Allen making $16 million a year while you, recent graduate, will be lucky to make $60,000 with a degree in Chemical Engineering or just $32,000 with that Psychology B.S. you’ve worked so hard for?
How, on earth, can one man’s time be worth $270,000 per hour? Let’s look at it from a purely financial perspective.
Because of the players on their roster last season, the Celtics pulled in $18.3 million in operating income. This year, with a NBA Finals win thanks to the addition of Allen, the Celtics will make even more from TV deals, sponsors, ticket sales, and merchandise than they did last year.
Of course, this doesn’t even begin to calculate the tens of millions that apparel companies, shoe manufacturers, and various media outlets will themselves pull in because of the public’s interest in Allen. But do all these millions of dollars worth of profits that Allen creates justify his exorbitant salary? Who cares?
In the end it’s a moot point; things - and men - are worth what you’ll pay for them.
No one forced Celtics owner Wycliffe Grousbeck to pay Allen millions of dollars. Grousbeck did it of his own free will, because he liked Allen, and he thought that Allen would help him win. To Grousbeck, Allen was worth $16 million, and that’s all that matters. If you can convince someone, anyone, that they need you, then they will pay you whatever they have to pay you to keep you on board.
It’s simple economics: supply versus demand. There’s only one of you, and if a lot of people want you then you’re suddenly worth a lot. If you’re looking for proof that your income is directly related to how in demand you are, look no further than Barry Zito, San Francisco Giants starting pitcher. Zito is being paid $18 million to go 2 and 10 so far this season, just because he was the “best” free agent pitcher available in the 2006 off-season.
It’s all supply and demand.
Think about it in terms of an auction. The more people bidding, or the more people are worried about other people bidding, the more you are worth.
Employers want to attract the best, most qualified applicants, and they are in competition with all the other employers out there hiring. They oftentimes have no choice but to overpay to get the type of person they want to hire.
So, be that type of person, new graduate. The kind of person that other people look at and say, “He makes THAT to do THAT?” The kind of person that is so in demand that employers have no choice but to cough up big bucks to receive your services.
Be good at what you do. Be popular. But most importantly, be in demand. If you can manage that, you can make a ton of money doing whatever it is you want to do.
As to what you want to do, well, you’re going to have to figure that part out on your own.
To contact Alex Cantatore, e-mail acantatore@turlockjournal.com or call 634-9141 ext. 2005.
Originally published in the Turlock Journal 6/18/2008.
Retrieved from the Turlock Journal Web site.