Friday, July 24, 2015

Major League Soccer and Income Inequality

Over the last few years there has been greater awareness of income inequality, with trends showing that income inequality is rising here in the US.  I have previously looked at income inequality in Major League Soccer as well as Major League Baseball, NCAA Athletic Department Revenue and NCAA football bowl subdivision bowl revenue.  Here is how to calculate the Gini coefficient.  The Gini coefficient is bound between zero and one, with a zero Gini coefficient meaning that income in perfectly equal and a Gini coefficient equal to one meaning that income is perfectly unequal.

Recently the Major League Soccer Players Union has released players salaries, and mirroring this is the degree of income inequality in Major League Soccer.  In fact not only are salaries in MLS more unequal but the degree of salary inequality has been increasing.  I will only be looking at the players salaries for the 2013, 2014 and 2015 seasons.

Gini Coefficient
Base Salary Guaranteed Comp.
0.5197 0.5294
0.6064 0.6141
0.6487 0.6492

As you can see in the table above, in both base salary and guaranteed compensation the Gini coefficient has been increasing in MLS, or that MLS salaries are becoming more unequal.

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