Should Schools be Paying their College Athletes? Dartmouth, who finished last in the Ivy League this season, became the first team in college athletics to unionize. Are college athletes students playing sports or are they employees of their schools? A 2021 White house memo said if students are performing a service in exchange for compensation, like scholarship or stipend while under control of the school, they should be considered employees and given the right to unionize and bargain for wages. The Dartmouth case is interesting because Dartmouth does not give athletic scholarships. They do provide ‘financial aid’, shoes, meals, game tickets but don’t offer free tuition and the union founders both work part time jobs in addition to dedicating 25-30 hours a week to basketball (not including travel). While traveling they follow a schedule that dictates when they eat and sleep. During class selection, they are advised not to select courses that would conflict with practice and are often completing schoolwork on bus trips. Due to this level of control the National Labor Relations board ruled that these athletes are employees of Dartmouth. The school has appealed the director’s ruling, and this could end up in the Supreme Court potentially setting a precedent for schools across the country. There are many college athletes who don’t generate income for schools and paying wages, firing, and strikes could be very sticky. Schools do have significant budgets for athletics. It’s worth noting that the NCAA has called these athletes ‘student athletes’ intentionally and in one case used that to deny a widow workman’s comp benefits after a football player died from a head injury during a game. Either way it is great to observe young people joining together for a cause that impacts their larger community.
Mortgage Rates – remained unchanged this week as the price of Mortgaged Backed Securities moved sideways. Rates are up approximately 0.125% from this time last year.
Inflation – the Personal Consumption Expenditures (PCE) Index, the Fed’s Favorite measure of inflation, showed that inflation rose 0.3% in February and is up 2.5% year over year. The Core rate, which strips out food and energy rose 0.3% and is up 2.8% year over year. Personal income rose 0.3% last month and spending rose 0.8%.
Rents – Apartment List released its March Rent Report which showed new rents rose 0.6% during March and are down 0.8% year over year. The nationwide median rent now stands at $1,388.
Loan Performance – Core logic released their monthly Loan Performance Insights and 30 days+ delinquencies dropped back to 2.8% which is in line with what we have seen for the past few years. Foreclosures remain near historic lows at 0.3% of mortgaged homes.
Home Values – the Case Shiller Home Price Index – the gold Standard of appreciation – showed that home prices fell 0.1% in January, the first negative reading since last January. It is typical to see weaker numbers during the month of January. Home prices are up 6% on a year over year basis, an increase from last months’ reading of 5.6%.
Mortgage Applications to purchase homes remained stable last week and are down 16% year over year. Refinances declined 2% last week and are down 9% from last year.