Derek Jeter and Nominal Wage Rigidity

• Derek Jeter is in the midst of some tough negotiations.  Will he accept a real pay cut?  The market says that he better but his sense of fairness and his past compensation are nudging him to be a pinch unrealistic here.     Now, $19 million a year averages out to $117,000 per game. Not a bad wage or $29,000 or so per at bat.   At $29,000 per lecture, how many lectures would my friends in academia be willing to give a year?  I’d supply 10 and call it a year.  

“If they did agree on those numbers, it would actually represent a small, but symbolic, annual increase over Jeter’s last contract, which, at the behest of George Steinbrenner, was designed to average a sliver below $19 million a year.

A deal that paid $19 million a year would also allow Jeter to rationalize that he was not taking a pay cut, a point that was emphasized on Friday by one National League executive who has been watching the Jeter situation with interest. That executive said that established stars like Jeter typically found it difficult to take any kind of reduction of pay, even when they have already made enormous amounts of money.

Still, it is not clear that the Yankees will ultimately agree to a compromise that pays Jeter $19 million a year, regardless of the negative fallout a protracted standoff might produce.”

The Yankees should offer their Captain deferred compensation. Offer him $1 billion dollars in the year 2400 and let’s get back to more important things. What is the net present discounted value of 1 billion dollars 390 years from now?

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