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The Federal Reserve is always on the lookout for signs of easing wage pressures, and we seem to have a big one in East Rutherford, N.J., home of football’s New York Giants. The NFL team has just announced a new starting quarterback to replace someone who was making roughly 40 times as much. If lightly-compensated Tommy DeVito can now exceed the play of generously paid Daniel Jones, it suggests a veritable productivity revolution in the Giants backfield, though perhaps fans should not expect a decline in ticket prices. The well-heeled Mr. Jones is a leader with grit. But your humble correspondent has been concerned for a while about his compensation and the
message it sends. In March of 2023 this column noted: Economists routinely argue over the most interesting and important inflation gauges, with some partial to consumer prices or non-supervisory wages, or perhaps measurements specific to food or energy or housing or used cars. But an especially striking number, and the one generating perhaps the most chatter on Wall Street trading desks this week, is the price that a National Football League team just paid to retain one of its employees. In the New York Post Ian O’Connor reports on a new contract for Daniel Jones, an unspectacular quarterback: Despite a career record of 21-31-1, he convinced the Giants to pay him $40 million a year. This morning Evercore ISI Chairman Ed Hyman chuckled as he noted on
Maria Bartiromo’s Fox Business program that the Jones deal is not exactly a sign of declining wage pressures. Mr. Hyman’s comment was as much a lament as a joke because he thinks that monetary tightening by the Federal Reserve is likely to result in a recession later in the year. The esteemed Wall Street economist knows that the sky-high compensation being handed out by the New York Giants is not helping him make his case…
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