Article: Minor Leaguers Deserve Better

[DJL44]

There are clear ways to tell that this is monopoly power setting the price, not a fair market

 

1) Everyone makes the same paycheck

2) 6 year minor league free agents make more money

3) The independent leagues pay higher wages

[Mike Sixel]

The is plenty of evidence out there that many great athletes don't choose baseball because there is a quicker path to the NBA or NFL, that they don't have to toil 6 years on buses going to small towns. That data is actually out there.

 

There are ways to keep competitive balance.....

 

Like, the 10 worst teams get 1 month to sign up to 3 draft eligible players for any price, then there is a draft. At least 30 players would get market rates then.....there are many ways this could be more fair to the players.

 

But I suspect at this point we are talking past each other now, and won't convince the other side.

[tobi0040]

So they are paid just fine.

 

I am not following you here. They could have made at least 3 times this amount by doing nothing. So clearly they are not doing this for the money, they are trying to get to the big leagues and this is the only way to achieve that.

[tobi0040]

And while this may limit the "free market" for professional baseball services, these services still must compete in the complete market for labor services. So, some players taht are drafted may choose an alternative career rather than take the low pay and limited chances of a professional baseball career. Most of these guys know that they have zero chance of making it to the big leagues so they go do something esle in their lives.

 

In the definition of a monopoly (below), "a single company....owns all of the market for a given type of a product or service". In this case, the given type of service is the labor market for baseball players. Specifically, baseball players aspiring to become professionals. So, they could quit and go into another line of work. But the government enforces competitive practices in every other field. For example, they keep blocking mergers in the cell phone market to ensure we have 4 or more competitors. This keeps prices fair. If we had one cell phone carrier we would all spend $200 a month. A minor league baseball player quitting due to wages would be the equivalent of a cell phone customer, facing a monopoly not using a cell phone and in turn, yelling really loud, using a pigoen, or not communicate at all.

 

Monopoly

A situation in which a single company or group owns all or nearly all of the market for a given type of product or service. By definition, monopoly is characterized by an absence of competition, which often results in high prices and inferior products. (in this case a monopoy on the supply of baseball players keeps prices low).

 

Monopoly is the extreme case in capitalism. Most believe that, with few exceptions, the system just doesn't work when there is only one provider of a good or service because there is no incentive to improve it to meet the demands of consumers. Governments attempt to prevent monopolies from arising through the use of antitrust laws.

 

http://www.investopedia.com/terms/m/monopoly.asp

 

free market

noun

an economic system in which prices and wages are determined by unrestricted competition between businesses, without government regulation or fear of monopolies.

 

http://dictionary.reference.com/browse/free+market

[Shane Wahl]

As a host mom for the Elizabethton Twins, I charge each player $100.00 per week. That doesn't even cover the groceries and my water and electric bills double while they are here. The boys each lunch here, take food to the park with them and then eat dinner here at 11:00 following the ballgame. I send food on the road with them too.

 

I always appreciate your posts! And thank you for being such a great host.

[TheLeviathan]

I think a more lucrative minor league wage is probably your best best for increasing the percentage of African-Americans in the game as well. The path to baseball takes awhile and without the financial incentive to be patient I think that potential group of players is the one hurt most.

 

If baseball negotiated these payments directly with the minor leaguers, that would be something and the free market arguments would be valid. (They are valid, to a degree) But baseball has an anti-trust exception and that muddies the waters significantly.

[tobi0040]

I think a more lucrative minor league wage is probably your best best for increasing the percentage of African-Americans in the game as well. QUOTE]

 

Good point. Look at Torii Hunter. He was drafted at 18, had a son at 20, and did not see regular major league action until he was 24 years old. He was on the verge of quitting a few times.

[Jim Crikket]

I think a more lucrative minor league wage is probably your best best for increasing the percentage of African-Americans in the game as well. The path to baseball takes awhile and without the financial incentive to be patient I think that potential group of players is the one hurt most.

 

This subject inevitably starts to become one where race enters the discussion. It's difficult to have the conversation when that happens, because everyone has to be cautious of generalizations and political correctness. This is especially true for an upper-middle aged white male like myself. That said, I don't think anyone would dispute that baseball's minor league pay structure has, over time, significantly contributed to the current ratio of black/white/latino players in MLB.

 

I just shake my head when MLB talking heads boast about the few bucks they put in to the "RBI" program that builds a few diamonds in urban areas. As if building more fields will make more kids decide they want to work their asses off to put themselves in a position where they can get paid less than minimum wage to play professional baseball.

 

The better approach, it seems to me, would be to create a compensation system where the best athletes in the US see baseball as worth pursuing - where they can at least just make a living wage for a couple years while they and the teams they play for figure out if they have a realistic shot at the big leagues. More kids wanting to play would create demand for more ballfields, not the other way around.

[Jim Crikket]

I think a more lucrative minor league wage is probably your best best for increasing the percentage of African-Americans in the game as well. QUOTE]

 

Good point. Look at Torii Hunter. He was drafted at 18, had a son at 20, and did not see regular major league action until he was 24 years old. He was on the verge of quitting a few times.

 

I'm not a huge Torii Hunter fan. I can admire his talent and appreciate the contributions he made during his time with the Twins without much caring for Torii Hunter the person. I think he's all about "getting his" and trying to make his personna look good. He talks a lot about how much he cares about the young African American kids coming up behind him and wanting to help get more of those kids in baseball. I think he should talk less to the media about it and more to his Union about not negotiating away minor leaguers' money just so he and his MLB friends can have an even bigger share of the pie. But that might cost Hunter a couple bucks, so I doubt we'll see it happen.

[diehardtwinsfan]

Honestly, the easy way to solve this would be for MLB to build or purchase a small apartment near the park that could house the team plus one or two extra dorm rooms for callups and what not and cover their meals as well. If they've paid for living and meal expenses, there's not much else at that age, and I'd imagine that would solve a lot of those problems.

 

I think most players could stick through that at minimum wage if they had no food/housing costs. As others have said, I'd think MLB would already be doing that with the food.

[Hosken Bombo Disco]

I agree diehard- I would have believed the players were put up in an extended stay and given a somewhat generous stipend, if not a generous salary.

 

The free agency cases of the 1970s showed pretty clearly to me that veteran major leaguers at that time (Messersmith, Catfish, et al) weren't being paid what they were worth.

 

Jump ahead, and the ordinary person is too busy to know that minor leaguers today are being exploited in the same manner as major leaguers were before. Thanks to Seth and Thrylos for their figures and the others here for their first hand experiences. Great thread topic. I have nothing to add other than it's unfortunate that both MLB owners and union leaders will not even listen to what their employees are asking for until a lawsuit is filed - such is the "litigious" culture we bemoan today but seem unwilling to address.

[Jim H]

This is an interesting thread. While there are interesting points made on both sides of the issue, I would like to point out one thing. There will be consequences from changing the current structure of compensation in the minors. I suspect that major league organizations will either be forced to increase wages, etc. for minor leaguers or will choose to in order to avoid getting the courts involved in this. That doesn't mean however that major league organizations will increase their minor league budgets.

 

The likely result could be fewer minor leaguers in each organization. Most teams could choose to sign fewer marginal prospects. They could choose to sign fewer non-drafted guys like the Anthony Slama's of the world. They could decide that signing lots of cheap foreign prospects that occasionally yields a Josmil Pinto, is no longer cost effective when they are no longer so cheap.

 

Right now the Twins have a lot more players than places for then to play, because it doesn't cost them much to keep a bunch of kids in extended spring training. If that changes(I am not saying that it shouldn't) they may have to rethink that. It is even possible that some teams will eliminate one of their short season teams if the cost increases to keep so many marginal prospects.

 

Increasing salaries may even more likely, effect older organizational type guys. Why keep guys who aren't too likely to play in the majors(like Beresford for example) if they get more expensive? This sort of thing has happened before in baseball. In the 50's and early 60's most major league teams had very extensive farm systems because it cost them virtually nothing. When that changed(many reasons including the major league TV exposure) most organizations eliminated up to half of their farm teams.

 

While I think that some change concerning minor leaguer's salary should and will change, don't be to surprised if there are some unforseen consequences.

[shimrod]

This line of reasoning tends to bother me, whether talking about minor leaguers or anyone else in general. Everyone has a right in this country to quit their jobs at will. But at the same time, that does not end business responsibility to treat their employees fairly. Employment laws were created for such a scenario. MLB can skirt around them because there is a union and these rules are collectively bargained... except that in this case, the bulk of the MLB employees don't get to vote on said rules.

 

 

You quoted my earlier post. My point is, for most players the minor leagues are like playing the lottery. The odds are against them. Adding up the salary (most here are disregarding the signing bonus) and hours and comparing it to a regular job is not an apples to apples comparison. No one gets a burger flipping job with the intention of achieving a 7 figure salary in the same business within 5 or 6 years. That's not an unrealistic result in baseball. Every minor league ballplayer is gambling that they'll be one of the millionaires. A much better percentage win that gamble than win the lotto. Should many of the low round players quit and start a real career? Probably, their odds are much worse than the high picks. As an earlier poster said, if they didn't think it was worth it they wouldn't be doing it, and the league might have to pay higher wages to fill the roster.

[tobi0040]

 

I'm not a huge Torii Hunter fan. I can admire his talent and appreciate the contributions he made during his time with the Twins without much caring for Torii Hunter the person. I think he's all about "getting his" and trying to make his personna look good. He talks a lot about how much he cares about the young African American kids coming up behind him and wanting to help get more of those kids in baseball. I think he should talk less to the media about it and more to his Union about not negotiating away minor leaguers' money just so he and his MLB friends can have an even bigger share of the pie. But that might cost Hunter a couple bucks, so I doubt we'll see it happen.

 

Torii was my favorite player and I was sad when he left. I usually get upset when a guy kicks the team that drafted him to the curb for an extra million. But in Torii's case, we offered 3 years 45 million and he got 5 years and 90 million. On top of that he approached us a year before being a free agent in both occasions where his contract was coming up and he was denied.

 

I guess I don't blame him. As far as standing up for minor league.players.He could.But so could one of the several hundred other veterans. It isn't solely his responsibility.I do know he has started a succesful charity that encourages young african americans to play and stick with baseball. He also encourages other players to donate.

[tobi0040]

You quoted my earlier post. My point is, for most players the minor leagues are like playing the lottery. The odds are against them. Adding up the salary (most here are disregarding the signing bonus) and hours and comparing it to a regular job is not an apples to apples comparison. No one gets a burger flipping job with the intention of achieving a 7 figure salary in the same business within 5 or 6 years. That's not an unrealistic result in baseball. Every minor league ballplayer is gambling that they'll be one of the millionaires. A much better percentage win that gamble than win the lotto. Should many of the low round players quit and start a real career? Probably, their odds are much worse than the high picks. As an earlier poster said, if they didn't think it was worth it they wouldn't be doing it, and the league might have to pay higher wages to fill the roster.

 

I think most people aspire to rise through the ranks wherever they are. I work for a company with 300,000 employees and a CEO that makes $20M a year. In fact, if you took the 25 highest paid executives in MN their salaries would dwarf the Twins payroll. So the lotto ticket theory does not really apply, as the odds are much worse in the real world.

 

If you get that first job in the mail room, our society says you deserve at least minimum wage while you start your ascent, which is not the case for a minor league player. The fact that he has a potential payoff down the road should not justify a salary of $6k a year.

[Wookiee of the Year]

This is an interesting thread. ... That doesn't mean however that major league organizations will increase their minor league budgets.

 

The likely result could be fewer minor leaguers in each organization. Most teams could choose to sign fewer marginal prospects. They could choose to sign fewer non-drafted guys like the Anthony Slama's of the world. They could decide that signing lots of cheap foreign prospects that occasionally yields a Josmil Pinto, is no longer cost effective when they are no longer so cheap.

 

...

 

Increasing salaries may even more likely, effect older organizational type guys. ... In the 50's and early 60's most major league teams had very extensive farm systems because it cost them virtually nothing. When that changed(many reasons including the major league TV exposure) most organizations eliminated up to half of their farm teams.

 

While I think that some change concerning minor leaguer's salary should and will change, don't be to surprised if there are some unforseen consequences.

Jim H, it's a good point worth thinking about, and a lot of it comes down to just how tight you think the profit margins for major league clubs are. As others have pointed out, the fact that minor leaguer salaries could be doubled for less than 20% what the Twins paid Nick Blackburn last year suggests clubs (at least the Twins) aren't operating at extremely tight margins and probably have room to simply eat the cost.

 

If MLB profits are virtually nonexistent, or teams are unwilling to reduce their current profit margins, you might see minor league jobs reduced--but I don't see indications that that's where the first of the fat is to cut. The reason MiLB salaries are so low is not because MLB teams believe their money is worth little when invested there; it's because minor leaguers have been represented by a bargaining unit that doesn't care to protect their interests, and so has traded away their compensation in exchange for benefits for major leaguers.

 

My guess, if teams were unwilling or unable to lower their profit margins? They'd guard their Free Agency dollars more tightly, eliminate that new MLB coach position they just added last year, or look for areas around the clubhouse management where they can save money--because my hunch is there's even less surplus value to be found there than in marginal minor leaguers, even if their salaries doubled.

 

Also, regarding the shrinking farm systems of the 50's and 60's, my understanding is teams disappeared not because minor league expenses went up but because minor league revenues went down--TV outcompeted minor league teams so their major league owners had to start thinking of them more as investments and less as additional profit-generators.

[DJL44]

Also, regarding the shrinking farm systems of the 50's and 60's, my understanding is teams disappeared not because minor league expenses went up but because minor league revenues went down--TV outcompeted minor league teams so their major league owners had to start thinking of them more as investments and less as additional profit-generators.

 

That's the general consensus - TV in general and the ability to watch major league baseball as well as other sports on television shrank the minor leagues. However, the teams that are left have done fairly well, especially the AA and AAA teams which have been able to leverage their towns for nice new minor league ballparks.

[shimrod]

I think most people aspire to rise through the ranks wherever they are. I work for a company with 300,000 employees and a CEO that makes $20M a year. In fact, if you took the 25 highest paid executives in MN their salaries would dwarf the Twins payroll. So the lotto ticket theory does not really apply, as the odds are much worse in the real world.

 

If you get that first job in the mail room, our society says you deserve at least minimum wage while you start your ascent, which is not the case for a minor league player. The fact that he has a potential payoff down the road should not justify a salary of $6k a year.

 

You're making my point here, lottery-wise. I'm saying the "lottery" odds are much better as a minor league ballplayer than as a burger flipper (or lotto player). You agreed with me on this.

 

So, let's consider the price of a ticket. If a dollar buys you a ticket for a million dollar payout at odds of 10 million to one, what is a ticket with odds of 100 to one worth? What would you pay for a 1 in 100 chance at a million dollars? The minor leaguers are playing in the 1 chance in a 100 lottery, and the price they pay for that ticket is low wages and long hours. (playing a game, I might add).

 

I'm not at all arguing that they couldn't be paid more, the skin-flints who own the team wouldn't miss the money. And I'm fully on board with the idea that a labor agreement negotiated by a group with opposing interests is inherently wrong. But the fact the league has no shortage of players willing to play for the going rate tells me the wage is not too low.

[DJL44]

There is another benefit of having a strong minor league system - it helps develop major league players. When the talent level is higher the development in the minors is of more value.

[tobi0040]

I think most people aspire to rise through the ranks wherever they are. I work for a company with 300,000 employees and a CEO that makes $20M a year. In fact, if you took the 25 highest paid executives in MN their salaries would dwarf the Twins payroll. So the lotto ticket theory does not really apply, as the odds are much worse in the real world.

 

If you get that first job in the mail room, our society says you deserve at least minimum wage while you start your ascent, which is not the case for a minor league player. The fact that he has a potential payoff down the road should not justify a salary of $6k a year.

 

 

You're making my point here, lottery-wise. I'm saying the "lottery" odds are much better as a minor league ballplayer than as a burger flipper (or lotto player). You agreed with me on this.

 

But the fact the league has no shortage of players willing to play for the going rate tells me the wage is not too low.

 

I follow you now regarding the lotto ticket analogy. I still don't think the sub-minimum wage is acceptable, but it looks like we agree on that.

 

The logic of no shortage of the labor exists, therefore this is not a big issue doesn't make sense to me.

 

A) we don't know how much labor would exist if they paid more. I would guess every MLB team has lost a player that would have eventually contributed to their MLB club because he was struggling in the minors and not making any money. Most men have a complex about being able to support their wife/girlfriend and kids if they have any. More labor would mean higher qualify of labor, i.e. a better MLB team.

 

in the mail room example I used earlier. This is a guy that is starting out and wants to climb the ranks. Our society protects him and pays him at least a minimum of $7.15 an hour. Competition within that industry, i.e. he could work at any mail room creates a situation where a premium is added to the role, so this guy is probably making $10 an hour. $10 an hour is $20,800 a year, or about $8K more than the annualized $1,150 a month over six months. The competition is lacking for MILB players, therefore no premium is attached and they should not be exempted from minimum wage considerations.

[mlhouse]

With all due respect, it seems to me that the fact that young ballplayers can choose other career paths does not justify a regime that is inherently anti-competitive. What if all the hospitals and health insurance companies conspired to limit doctors' compensation to $50,000 per year? Under your theory, the best medical students could "choose" to work for hedge funds, until the hedge funds implement a similar monopolistic conspiracy.

 

It seems to me that a union that fails to adequately represent its members is an abomination, and it is inherently unjust for an employee to be bound by a union contract if the employee has no vote.

 

I understand that in order to maintain competitive balance, ballplayers must be locked into negotiating with whichever team owns the rights to their services, and must be prohibited from participating in a free market. However, it seems to me that the scales need to be balanced by allowing them to form a separate union where they get to elect leaders and vote on contracts. Then if the owners are not willing to make a deal, the owners can close their minor league franchises. I support free markets, but the current regime seems totally one sided and the opposite of free when it comes to minor league players.

 

It seems to me that there should be a basic right to sell one's services to the highest bidder and that this is fundamental to capitalism and free markets. If such right is going to be suppressed in the name of preserving competitive balance among the 30 ballclubs, then there must be some mechanism for protecting the employees from gross exploitation.

 

It doesnt matter what I think, nor what you think. I might even think such a situation is unfair. The problem is that is the law. For example see Wood v. NBA. Unionized labor has enormous power to distort the free market place.

[mlhouse]

On 3 - I know why there are restrictions. I think they are too heavy handed. They should be able to find a way to allow some outside work without banning all of it.

 

On 4 - Do you believe in the free market or not? There are most certainly players who could make the big leagues that turn it down because they can't afford to be poor for 5 years. Are you asserting that supply and demand is baloney?

 

MLB is oversupplied with teenagers who can still live at home in the offseason and Dominicans with no other options. That doesn't mean it has cornered the market on athletes. You contradict yourself with your example - the only way to get a talented multisport athlete to play baseball is to give them a huge bonus. There are players almost, but not quite, as good as Stewart every year who turn down a 3rd round signing bonus to play football or basketball. I want to see guys like Kenny Lofton playing baseball, not going to Europe to play basketball.

 

1. With multi-sport athletes there is considerable competition between the sports. If major league baseball thought they were good they would offer them a bigger bonus. The minor league salary plays little part in this determination. It is essentially trivial when you are player that is in this competitive situation.

 

2. You simply cannot ignore the bonuses as part of the baseball compensation scheme and pretend that the minor league stipend (which is what it really is) is the competitve price. The Twins 6th round draft pick last year catcher Brian Navarretto got a $262,500 signing bonus. Prorate that over the next 5 or 6 years and he is making more than an adequate income.

[tobi0040]

It doesnt matter what I think, nor what you think. I might even think such a situation is unfair. The problem is that is the law. For example see Wood v. NBA. Unionized labor has enormous power to distort the free market place.

 

Wood v. NBA has absolutely nothing to do with the point most of the people on this site are making. True, in both cases a union or league is setting salaries for players. However, Mr. Wood sued the NBA because his 1 year, $75,000 contract was not a market value offer. He wanted more money and sued that he was being harmed because he was not paid enough.

 

This lawsuit was in 1984. In 1984 you could buy a gigantic house for $75,000. Certainly that was hundreds of multiples above minimum wage. The point most have made here is that $1,150 a month, given the hours these guys put in playing, practicing, training, and traveling is below minimum wage.

 

http://www.leagle.com/decision/19841127602FSupp525_11023

[tobi0040]

So, if they are not in it for the money they cannot be underpaid. That is a contradiction that you are creating yourself. Hence, my comment to you that they are paid "just fine".

 

This is not charity work. This check is the livelihood of thoustands of people. A big difference. Many illegal immigrants farm for $2-3 dollars an hour, which is illegal. It happens though, so given no shortage of people willing to do it, I guess they are paid fine?

[snepp]

2. You simply cannot ignore the bonuses as part of the baseball compensation scheme and pretend that the minor league stipend (which is what it really is) is the competitve price. The Twins 6th round draft pick last year catcher Brian Navarretto got a $262,500 signing bonus. Prorate that over the next 5 or 6 years and he is making more than an adequate income.

 

You simply can't ignore that the majority of players don't get bonuses anywhere near that figure.

[mlhouse]

Wood v. NBA has absolutely nothing to do with the point most of the people on this site are making. True, in both cases a union or league is setting salaries for players. However, Mr. Wood sued the NBA because his 1 year, $75,000 contract was not a market value offer. He wanted more money and sued that he was being harmed because he was not paid enough.

 

This lawsuit was in 1984. In 1984 you could buy a gigantic house for $75,000. Certainly that was hundreds of multiples above minimum wage. The point most have made here is that $1,150 a month, given the hours these guys put in playing, practicing, training, and traveling is below minimum wage.

 

http://www.leagle.com/decision/19841127602FSupp525_11023

 

He sued the NBA because he claimed the CBA prevented him from negotiating with other teams and it's scale lowered his earnings, and that he was NOT a member of the union that made the agreement.

 

/ edited by ashburyjohn to remove disrespectful and antagonistic phrasing

[mlhouse]

This is not charity work. This check is the livelihood of thoustands of people. A big difference. Many illegal immigrants farm for $2-3 dollars an hour, which is illegal. It happens though, so given no shortage of people willing to do it, I guess they are paid fine?

 

Yes. If they were not paid just fine there would not be illegal immigrants.

[mlhouse]

I think a more lucrative minor league wage is probably your best best for increasing the percentage of African-Americans in the game as well. The path to baseball takes awhile and without the financial incentive to be patient I think that potential group of players is the one hurt most.

 

If baseball negotiated these payments directly with the minor leaguers, that would be something and the free market arguments would be valid. (They are valid, to a degree) But baseball has an anti-trust exception and that muddies the waters significantly.

 

 

I disagree with this racial way of looking at it. Should the NBA be looking at increasing the number of white players in the league?

 

Even if that was a worthwhile goal, minor league salaries are unimportant. What percent of the population knows what the minor league salary scales are? The choices of what sport to play are made long before such a concept would enter into an individual's thinking.

 

High level players that play multiple sports are competitively bid on. I used the Kohl Stewart example. The guaranteed 7 figure signing bonus for a high school player is something other sports cannot even come close to and you would need to be one hell of a football/basketball/hockey (maybe) to turn that offer down.

 

Baseball also has several other financial advantages other sports cannot compte against. Football has significant injury risk and their contracts are not guaranteed. Football also does not have a minor league or foreign league system were players just below the "major league" level can earn significnat incomes by playing minor league football.

 

Another aspect of the football and basketball player economics is that to make the professional levels you have to go to college for what essentially is your minor league seasons. Baseball is allowed to draft players directly from the high schools.

 

So there are competitive advantages to baseball just as there are some to other sports.

[DJL44]

If major league baseball thought they were good they would offer them a bigger bonus.

 

That only works if you think the baseball draft is made with perfect knowledge of the future potential of the draftees. That clearly isn't the case. High round picks bust often and low round picks make the majors.

[tobi0040]

Yes. If they were not paid just fine there would not be illegal immigrants.

 

Just a philosophical difference then.

 

The immigrants from latin america that illegally make $2 an hour are not underpaid. What if we smuggled immigrants from Ethiopia and paid them 20 cents an hour? Some would be willing. 1.60 a day sounds reasonable with your line of reasoning. Can we find anyone to go lower? What about a child from Ethiopia? This is really fun and not at all morally objectionable.