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Thursday, February 22, 2024

Upfront: College sports and a changing labor market

The transfer portal, a fairly new term in our lexicon, is a fascinating symbol for our fast-changing labor market.

It refers to the National Collegiate Athletic Association’s new system that enables student-athletes to change schools without sitting a year after the transfer. Nearly 3,000 students have filed their interest in jumping ship for greener pastures.

Sports fans and boosters are split on the change. If their school attracts a star who sparks success, it’s all good. But others are appalled, contending that the portal encourages disloyalty by athletes and coaches and is widening the gap between NCAA haves and have-nots. 

A player who has a great season at a small school can land a slot for the following year at a bigger program that offers more prestige and benefits. Coaches have an incentive to attract hot new recruits rather than develop current players who may be underperforming.

Quick entries and exits can tear away at long-term team-building, which has been a hallmark of amateur athletics. A decade after graduation, my son retains tight bonds with former teammates who hung together for four years in an NCAA-sanctioned sport. I doubt those lifetime friendships would happen if they’d split up.

This year, Weddington High School’s boys basketball team won its second consecutive state title with a group that wasn’t as tall or as athletic as some rivals in North Carolina’s large-school division, sports reporters noted. The Union County students had played together since middle school, creating a cohesion that contributed to a   49-game winning streak. 

But the transfer portal concept reflects the trend toward magnifying individual rights — why shouldn’t students play wherever they prefer and maximize their potential? Indeed, the new policy comes as workers are wrestling some power back from employers, perhaps for the first time in decades. (More on that below.) 

Many of the biggest U.S. employers boosted front-line pay by at least 10% in the last year, led by 17% average increases at Amazon and Walmart. Average weekly earnings overall gained 4.5% to more than $31 an hour in 2021, the fastest increase since the early 1980s. Unfortunately, the fastest inflation rate in decades is eating up the wage gains for many people. 

Still, the higher wages didn’t happen because big business executives suddenly got more compassionate. Instead, a variety of factors have created an unexpected staffing shortage in countless industries and the strangest labor market in my lifetime.

It’s a lot harder to feel loyal to an employer when one receives a barrage of job openings from staffing agencies or sees billboards urging people to come aboard — or works in a declining industry.

Early in my career, I worked at The Charlotte Observer, where some colleagues in the newsroom of more than 250 periodically discussed the merits of organizing a labor union. The chatter always faded. It was a good place to work by newspaper standards and most folks respected management. Everyone knew a union would be strongly opposed by owner Knight Ridder, a public company enjoying robust profit margins despite tense relations at its unionized papers in Detroit and Philadelphia.

In February, a majority of the Observer’s 35 journalists formed a union affiliated with other publications. The McClatchy newspaper, owned by New York-based hedge fund Chatham Asset Management, gave “voluntary recognition” to the effort. 

I never thought I’d see that happen — or a transfer portal for college athletes.

David Mildenberg
David Mildenberg
David Mildenberg is editor of Business North Carolina. Reach him at dmildenberg@businessnc.com.

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