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Using two measures of pay dispersion, Bloom analyzed how they affected both individual player performance and final team standings for 29 teams from 1985 to 1993. Adjusting for such factors as past performance, age, experience, and pay levels, he found that unequal pay distributions translated into poorer stats for lower-paid players on a number of performance measures—and into lower standings for their teams.

The proof of the pudding: Bloom notes that three of [1998's] division winners, the New York Yankees, the San Diego Padres, and the Cleveland Indians, each had one of the smallest pay spreads in their respective leagues.

Successful teams like the San Diego Padres and Cleveland Indians tend to have relatively smaller pay spreads.

—Reprinted from March 29, 1999 issue of Business Week, by special permission, copyright © 1999 by The McGraw-Hill Companies, Inc.

Successful teams like the San Diego Padres and Cleveland Indians tend to have relatively smaller pay spreads.

Examining the Newsclip

1. Synthesizing Information What are the two theories presented in the article regarding large pay differentials?

2. Finding the Main Idea Which theory does the Bloom theory support?

3. Drawing Conclusions In your opinion, are the study's findings valid? Explain your reasoning.

CHAPTER 16: ACHIEVING ECONOMIC STABILITY 455

SECTION 4

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