Claudia Goldin is a Harvard labor economist who won the 2023 economics Nobel, and she has a new mission in life: boost pay for the players in the Women’s National Basketball Association (WNBA). In a recent op-ed in the New York Times, she wrote that the pay disparity between WNBA players and their male counterparts in the NBA is “embarrassing.”

She writes:

Women’s basketball has rapidly become one of the country’s most popular spectator sports. The Indiana Fever, with its star Caitlin Clark, regularly sells out arenas. Several W.N.B.A. games last year attracted more than two million viewers. The 2024 N.C.A.A. women’s championship game drew a larger television audience than the men’s championship.

Yet players in the W.N.B.A. make far less money than many male athletes in less popular sports leagues — and only a sliver of what the average N.B.A. player does. Nothing can justify this extraordinary pay gap.

She continues:

Across the American economy, much of the gender pay gap no longer reflects outright discrimination. It instead reflects the different occupations and industries that men and women choose to enter, as well as other factors. But gender discrimination remains a major problem, and there is now a prominent example for everyone to see: professional basketball.

For the past year, I have worked with the Women’s National Basketball Players Association, the union for W.N.B.A. players, to consider the earnings of basketball players, and I have been surprised by what I found. The average N.B.A. player’s salary is around $10 million in the current season. That is 80 times what the average W.N.B.A. player earned (about $127,000 in salary) in the 2024 season.

However, as Goldin writes, she has formulas that “suggest that the average W.N.B.A. salary should be roughly one-quarter to one-third of the average N.B.A. salary to achieve pay equity.” Her claim is that the WNBA receives about a third of the viewership of the NBA, and that the pay structures should reflect that situation.

First, Goldin is making an orange-to-apples comparison in using viewership, since the advertising prices are higher for NBA games than those of the WNBA. Second, the NBA is a profitable entity, while the WNBA is not and has not made a profit in the near-30 years of its existence.

That the WNBA is unprofitable (and may never turn a real profit under the current business model) is significant if one understands the fundamentals of Austrian economics. From Carl Menger’s 1871 Principles of Economics, we learn that the value of the factors of production (what Menger called “goods of higher order”) is determined by the value of the final product, and in the case of the WNBA, the value of the individual players is determined by the value that WNBA customers place upon the value of the basketball games themselves. In other words, the valuation process runs backward from the value of the final product to the value of the factors (or higher-order goods).

Because the WNBA faces losses every year, the organization probably should be classified as a charity or non-profit, since individual franchises, economically speaking, would have a negative value. Furthermore, because women’s sports in the US are highly politicized, thanks to their association with Title IX of the Education Amendments of 1972, one can argue that the WNBA really is a political as opposed to an economic entity, which really is what Goldin is arguing.

Her claim that WNBA players should be earning more than $2 million a year on average is not based upon their economic value to consumers of professional women’s basketball, but rather is a political opinion tied to her abstract view of the world. That does not mean people do not value their services—spectators pay to watch them—but rather people are not willing to pay at the same level that spectators pay to watch NBA games.

There is an exception, however, and that has been the entry of Caitlin Clark into the league. Her passionate and wide-open style of play filled arenas and substantially raised the price of tickets when she was in town. However, as I noted last year, Clark received a hostile reception from most of the players because she is white and straight. I wrote:

Indeed, while basketball audiences and TV executives were ecstatic about Clark’s entrance into professional women’s basketball, fellow WNBA players and a number of media commentators were downright angry and hostile, making it clear that Clark was not welcome. Even though one economist estimated that Clark was responsible for about 26.5 percent of the revenue coming from ticket sales, merchandise, and television, none of that mattered to many of the owners, coaches, and players in the league.

Not only were players outspoken against Clark’s entrance into the league, but she also was the victim of harder (deliberate) fouls than any other WNBA player. For example, Chennedy Carter of the Chicago Sky is shown in this video screaming “B*tch” at Clark just before deliberately knocking her to the floor. The officials simply called a common foul before the league, after hearing protests, upgraded it to a Level One Flagrant Foul the next day, although Carter received no punishment for what she did.

Clark’s treatment this year is even worse. Brittany Griner—who spent nearly a year in Russian jails for possession of hashish oil before being released on a prisoner swap—was seen recently calling Clark a racial slur, something the WNBA brass ignored. (When Angel Reese of the Chicago Sky claimed that fans of Clark’s team—the Indiana Fever—used racial slurs against her, the league immediately “investigated.” However, the WNBA later announced its investigators found no evidence to substantiate Reese’s claim).

There is no denying Clark’s financial impact on the WNBA. After she was injured this year, missing several weeks, tickets to her games plummeted in price. Yet, many WNBA players still prefer she not be playing at all. While even Goldin recognizes that Clark’s financial influence is important, Goldin does not address the hostility toward Clark and the economic damage that the league would suffer if these players were successful in driving her from the WNBA.

But Clark or not, there is a reason that WNBA salaries are as low as they are. As I wrote last year:

Because the WNBA is not a profitable entity, its survival owes more to feminist and racial politics than anything else and the response of the league to Caitlin Clark drives home that point. A male star like Clark who is so good that he is changing the game would be honored in the NBA. The WNBA, however, is looking more and more like just another part of the modern Grievance Industry. As long as the league is heavily-subsidized, don’t look for that part to change.

Goldin can cite mathematical models if she wishes but given the fact that the WNBA creates negative wealth, the only true “equity” would be salaries of zero if she is going to appeal to economic formulas. Whatever pay the players receive is an act of philanthropy, and there is nothing wrong with wealthy NBA players and WNBA owners opening their bank accounts to accommodate female basketball players. Just don’t call in “equity.”