Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed.
PART 6 The Economics of Labor Markets
Chapter 19 of 36 Earnings and Discrimination
Section 9 of 16
…
Most actors earn little money and often take jobs such as waiters to support themselves.
But famous actors like Johnny Depp earn millions of dollars for each film they star in.
Most people who play tennis do it unpaid as recreation, but Serena Williams earns millions playing as a pro.
Depp and Williams are superstars, and their great public appeal results in huge incomes.
…
It is not surprising incomes differ within occupations.
Good carpenters and plumbers earn more than average ones.
People vary in ability and effort, these differences lead to income differences.
But the best carpenters and plumbers don’t earn the millions made by the best actors and athletes.
…
To understand the big incomes of Depp and Williams, we look at the special features of the markets for their services.
Superstars arise in markets by having two characteristics
· customers want to enjoy the good supplied by the best supplier
· the good is produced with a technology that makes it possible for the best producer to supply every customer at low cost
If Johnny Depp is the best actor everyone will want to see his newest movie.
Seeing movies by an actor half as appealing and talented multiple times is not a good substitute.
…
It is possible for everyone to see a performance by Johnny Depp because it’s easy to make multiple copies of a film.
Depp can provide his service to millions of people at the same time.
Because tennis games are broadcast on TV, millions of fans at the same time can enjoy seeing the top athletic skills of Serena Williams.
…
Why are there no superstar carpenters and plumbers?
Everyone prefers to employ the best carpenter but a carpenter can provide his services to only a limited number of customers.
Unlike the best and average actors and athletes the best carpenter will command higher than average wage, but not in the millions of dollars.
Considering the many actors who make little money from acting, it’s likely carpenters and plumbers make more money on average than actors.
… …
carpenters and plumbers
daiku to haikankō
大工と配管工

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