Article: Minor Leaguers Deserve Better

[mlhouse]

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.

 

Nope.........perfect knowledge is not required. Value in economics is a subjective opinion, not objective. So, the Twins thought BJ Garbe was worthy of the 6th overall pick in the draft and a 7 figure signing bonus. They also thought that Justin Morneau was worthy of a 3rd round pick. Not perfect knowledge, but that is how the valuation of the players are given their expectations.

[tobi0040]

Lol!!!!!!!! You clearly have zero understanding of the case. 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. These were the points you made. Woods refutes your points.

 

Let me explain, again why almost everyone else on this thread thinks they are underpaid.

 

$1,150 a month / 8 hours a day / 30 days a month = $4.79 an hour. It is illegal to pay someone $4.79 in this country.

 

Mr. Wood, in 1984 dollars was paid seven times more than todays minimim wage.

 

It really is not that complicated.

[mlhouse]

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? This is really fun and not at all morally objectionable.

 

Nope. If the wages paid to illegal immigrants were higher, MORE illegal immigrants would cross the border. If wages paid were lower, FEWER illegal immigrants would cross the border. That isn't just a philosophy, it is the law.

 

Next, it doesn't matter what wage rate I THINK is "reasonable". It only matters what the person ACCEPTING the wage believes is "reasonable". I wouldn't poop for $2/hour but to some people given what their alternatives are, $2/hour might be an economic windfall. It is a subjective measure of the value of your labor, time, and alternatives.

 

Next, if there were peope that willingly and knowlingly wanted to work for $0.20/hour who are you to decide if that is right or not? Clearly, if they are doing it willingly and knowingly then the $0.20/hour might be significantly more than what they can earn otherwise and starvation might be their other real alternative.

[mlhouse]

Let me explain, again why almost everyone else on this thread thinks they are underpaid.

 

$1,150 a month / 8 hours a day / 30 days a month = $4.79 an hour. It is illegal to pay someone $4.79 in this country.

 

Mr. Wood, in 1984 dollars was paid seven times more than todays minimim wage.

 

It really is not that complicated.

 

 

You are changing your argument know. Your argument was that the draft and other issues with respect to the labor agreement with the baseball union was wrong, and that players taht were not part of the union when it such agreements were made should not be subject to that agreement. Wood v NBA and many other court cases disproves your assertion.

 

Next, the minimum wage law is pretty much dead. There are lots of ways that a minor (notice the employer is a minor not major) league team will almost certainly be able to demonstrate that the players are not under their control for more than 40 hours per week for one and second, that the pay is based more on a "game" than hours worked. All kinds of compensation is based on this such as on-call work. In that case, overtime and minimum wages do not matter as long as the parties agreed to the compensation (check), that the compensation has some rational basis (check), and that the wages are competitive (check).

[DJL44]

players just below the "major league" level can earn significant incomes by playing minor league football.

 

Except the CFL.

 

One point I just remembered is the two groups at the bargaining table just negotiated those amateur signing bonuses downward and that savings is enough to boost minor league wages significantly.

 

Is a team allowed to double the pay of their minor league players? It would be a creative way to get around international bonus pool limits if they offered more pay instead of a large signing bonus. From a quick google search it appears that teams can negotiate pay after the first year which is set by contract. The Twins could make themselves very attractive to international free agents if they're known as the team that pays double.

[diehardtwinsfan]

Just a small point here, but this system isn't a free market. We can talk about free market economics here, but the reality is that it doesn't exist in baseball.

 

MLB has an anti-trust exemption based on the fact that they are essentially a trust. The draft, by its very nature, is anti-competitive as the 30 organizations essentially decide who potential labor pays for and sets their wage. That's illegal in every industry unless they get an exemption, and the reason why MLB is allowed to do it is because they have a collectively bargained agreement with the union. The problem though is that while the union "represents" minor leaguers, they aren't actually voting members of the union and so their interests are not being represented.

 

This one, in the eyes of the law, is pretty clear. Minor leaguers will either get to unionize, or they will be granted membership in the MLBPA. Their current wage, bonuses, etc. are all immaterial to this, other than proof that MLB and the MLBPA have been ignoring the interests of minor leaguers because quite frankly no one has forced them to do otherwise.

[tobi0040]

You are changing your argument know. Your argument was that the draft and other issues with respect to the labor agreement with the baseball union was wrong, and that players taht were not part of the union when it such agreements were made should not be subject to that agreement. Wood v NBA and many other court cases disproves your assertion. QUOTE]

 

Maybe you are confusing me with someone else. Here is my quote from the first post I made on this thread, two days ago:

 

"The monthly check has to be below minimum wage if you view "work" like a business would, the time at the ball-park, practice, and travel time would all need to be paid"

 

 

It sounds to me like you have an argument with the logic of minimum wage.

[tobi0040]

Just a small point here, but this system isn't a free market. We can talk about free market economics here, but the reality is that it doesn't exist in baseball.

 

MLB has an anti-trust exemption based on the fact that they are essentially a trust. The draft, by its very nature, is anti-competitive as the 30 organizations essentially decide who potential labor pays for and sets their wage. That's illegal in every industry unless they get an exemption, and the reason why MLB is allowed to do it is because they have a collectively bargained agreement with the union. The problem though is that while the union "represents" minor leaguers, they aren't actually voting members of the union and so their interests are not being represented.

 

This one, in the eyes of the law, is pretty clear. Minor leaguers will either get to unionize, or they will be granted membership in the MLBPA. Their current wage, bonuses, etc. are all immaterial to this, other than proof that MLB and the MLBPA have been ignoring the interests of minor leaguers because quite frankly no one has forced them to do otherwise.

 

 

Agreed. This is not a free market. I would expect this to change in the next few years, and minor leaguers to be paid above minimum wage at a minimum and possibly receive representation.

[shimrod]

Originally Posted by tobi0040 Let me explain, again why almost everyone else on this thread thinks they are underpaid.

 

$1,150 a month / 8 hours a day / 30 days a month = $4.79 an hour. It is illegal to pay someone $4.79 in this country.

 

Let me point out that the minimum wage is not an all-encompassing law. Many people are exempt, most of whom are also compensated in some other manner. You've got your wait staff working for less than minimum plus tips. You can get sales jobs that don't pay a stinking dime, straight commission. I would argue the minor league players compare well with the commission example. They earn a stipend with the opportunity to make a tremendous amount more if they perform well enough to make the MLB team, which is also the first time they generate any positive revenue for their employer.

 

You just cannot disregard the potential riches these guys all have a legitimate shot at. The chance to strive for a major league contract or even stardom is compensation of a sort. The fact many fall short doesn't change the fact they still had a shot most people never get. That shot has more value than another 3 or four bucks an hour.

[glunn]

It seems to me that the biggest problem with pure capitalism is that it ignores any concept of fairness. Capitalism is an economic theory that is designed to maximize production. Before there were unions and before there was a minimum wage, millions of people lived in extreme poverty so that a relative handful of people could live in extreme luxury.

 

Obviously, if given the choice between 20 cents an hour or starving, most people would pick 20 cents an hour. But who wants to live in a country where anyone is faced with such choices?

 

I hate the idea of someone working 40+ hours a week and not being able to provide adequate food, clothing, shelter and health care for his or her family. To me, that seems fundamentally unfair.

 

Is the CEO of General Motors really worth $20 million per year while a janitor is worth $20,000. Was it the janitors who caused General Motors to go bankrupt a few years ago? Was it really a good thing for the CEO to be able to be able to spend $2 million per year on a private jet while janitors' children died from lack of health care?

[shimrod]

You've never seen "pure" capitalism, and the US is getting farther away from it every day. Please remember the regulatory regime is priced into everything you buy, which is why $10/day is a living wage in some countries and $10/hour won't cut it in the US without gov't support.

[mlhouse]

It seems to me that the biggest problem with pure capitalism is that it ignores any concept of fairness. Capitalism is an economic theory that is designed to maximize production. Before there were unions and before there was a minimum wage, millions of people lived in extreme poverty so that a relative handful of people could live in extreme luxury.

 

Obviously, if given the choice between 20 cents an hour or starving, most people would pick 20 cents an hour. But who wants to live in a country where anyone is faced with such choices?

 

I hate the idea of someone working 40+ hours a week and not being able to provide adequate food, clothing, shelter and health care for his or her family. To me, that seems fundamentally unfair.

 

Is the CEO of General Motors really worth $20 million per year while a janitor is worth $20,000. Was it the janitors who caused General Motors to go bankrupt a few years ago? Was it really a good thing for the CEO to be able to be able to spend $2 million per year on a private jet while janitors' children died from lack of health care?

 

When you own General Motors then you can make the decision to pay the janitors as much as the CEO. The funny thing about these type of claims by people is that from my experience the business owners that are the most liberaral are the cheapest people and screw the lower end employees the most.

 

WHen you work for an employer only two things are important. 1. What you produce and 2. what your total compensation is. On occasion there is a sob story that will make me feel bad and I will give an employee a raise but that is favortism that is unfair to the rest of my employees. IF there are some people that work but cannot afford to live properly that is societies problem, not the employer's, and we have programs galore that spend hundreds of billions of dollars in food stamps, Medicaid, job training, section 8 housing, and other entitlements that give them help.

[Hosken Bombo Disco]

Ah yes, the regulatory regime. The welfare state. We are against them until we are for them, me included. A recent poll, if you trust polls, shows that West Virginians have actually lost patience with the pollution of their environment and would support "doing something" to fix it… or in my words, not trusting the free market to police itself. And because we are a civilized nation, we help people who are no longer able to help themselves, in the workplace or wherever. I think it's a pretty good deal.

 

Anyway, you have mentioned the signing bonuses -- that needs to be considered in this debate, no doubt. That might be a pretty strong argument against the minor leaguers. But I'd bet not a majority of them get that windfall bonus (I could be wrong), which circles back to the original complaint. Maybe there should be a minimum signing bonus? Not sure. Or scrap the new bonus structure and level them to some degree? That would no doubt upset the union and Scott Boras, which I can live with.

 

I am not against a young guy in his late teens or early twenties scraping by on a minimum wage, in the name of character building or living the dream, or whatever. But there would seem to be other moral and legal questions with the way the owners are operating their systems -- not paying a minor leaguer during spring training really stands out.

 

As others have suggested, aside from the signing bonus issue, maybe the Twins should pay a higher minor league salary, which in theory should draw better talent into the system (all scouting being equal). Better minor league talent competing for spots on the major league roster would be a tangible benefit to the major league team, to the bottom line. Maybe a team or two is already doing that, I don't know. I'm not knocking the Pohlads, as they are running the business they inherited as best they see fit. You defend the right of the CEO of General Motors to pay a pittance -- how about the idea that the Twins follow the lead of Henry Ford instead and forego some personal gain to pay employees what they are really worth? That's what some of us would like to see.

[mlhouse]

Ah yes, the regulatory regime. The welfare state. We are against them until we are for them, me included. A recent poll, if you trust polls, shows that West Virginians have actually lost patience with the pollution of their environment and would support "doing something" to fix it… or in my words, not trusting the free market to police itself. And because we are a civilized nation, we help people who are no longer able to help themselves, in the workplace or wherever. I think it's a pretty good deal.

 

Anyway, you have mentioned the signing bonuses -- that needs to be considered in this debate, no doubt. That might be a pretty strong argument against the minor leaguers. But I'd bet not a majority of them get that windfall bonus (I could be wrong), which circles back to the original complaint. Maybe there should be a minimum signing bonus? Not sure. Or scrap the new bonus structure and level them to some degree? That would no doubt upset the union and Scott Boras, which I can live with.

 

I am not against a young guy in his late teens or early twenties scraping by on a minimum wage, in the name of character building or living the dream, or whatever. But there would seem to be other moral and legal questions with the way the owners are operating their systems -- not paying a minor leaguer during spring training really stands out.

 

As others have suggested, aside from the signing bonus issue, maybe the Twins should pay a higher minor league salary, which in theory should draw better talent into the system (all scouting being equal). Better minor league talent competing for spots on the major league roster would be a tangible benefit to the major league team, to the bottom line. Maybe a team or two is already doing that, I don't know. I'm not knocking the Pohlads, as they are running the business they inherited as best they see fit. You defend the right of the CEO of General Motors to pay a pittance -- how about the idea that the Twins follow the lead of Henry Ford instead and forego some personal gain to pay employees what they are really worth? That's what some of us would like to see.

 

The Ford claims are just ridiculous. I know that the left wingers like to trot this (and Costco) out as an example of how companies are "better" if they just pay their employees more, but Ford was just working within the market. Working in the original ford plants was tedious work. The turnover was very high. To complete Ford had to pay a premium to his employees.

[diehardtwinsfan]

The Ford claims are just ridiculous. I know that the left wingers like to trot this (and Costco) out as an example of how companies are "better" if they just pay their employees more, but Ford was just working within the market. Working in the original ford plants was tedious work. The turnover was very high. To complete Ford had to pay a premium to his employees.

 

I'm sure there were reasons that Mr. Ford decided to pay his workers more. Some of it may have been ethics as Hosken suggested, and some of it may have been simple economics as you have suggested.

 

I fail to understand why it cannot be both, as both can be very legitimate reasons for raising salaries. I also fail to understand why it is that some are against the idea of paying people a living wage. I've been to countries where you are lucky to make a couple of dollars a week. The poverty there cannot be described adequately, as the poor in this country live like kings in comparison.

 

The reality as I see it is that the MLB has essentially organized into a trust like structure to control wage and employment of prospective employees. That's done in the name of competitive balance, and truthfully, for the league to survive, that has to exist in some manner... However, the law is clear that in order to be exempt from this type of anti-trust activity, the players must be unionized and collectively bargain their wages. That works great until the union no longer represents the interests of players, and in this case, the minor leaguers are not represented.

 

MLB would have done themselves well by building dorm/apartment style housing near all their stadiums and making sure the players were fed well. But they don't do that. As well, it isn't as if they lose money on the minor league operations. Those are quite profitable, especially if the players are being paid peanuts. MLB and the MLBPA are likely going to lose this. They've exploited the law. This is a case where simple ethics could have solved this problem years ago. Instead, due to a complete lack of them (or perhaps pure ignorance), they are in this situation. I'm hardly a fan of organized labor, but in this case, it's hard to feel sorry for MLB and the MLBPA.

[mlhouse]

I'm sure there were reasons that Mr. Ford decided to pay his workers more. Some of it may have been ethics as Hosken suggested, and some of it may have been simple economics as you have suggested.

 

I fail to understand why it cannot be both, as both can be very legitimate reasons for raising salaries. I also fail to understand why it is that some are against the idea of paying people a living wage. I've been to countries where you are lucky to make a couple of dollars a week. The poverty there cannot be described adequately, as the poor in this country live like kings in comparison.

 

The reality as I see it is that the MLB has essentially organized into a trust like structure to control wage and employment of prospective employees. That's done in the name of competitive balance, and truthfully, for the league to survive, that has to exist in some manner... However, the law is clear that in order to be exempt from this type of anti-trust activity, the players must be unionized and collectively bargain their wages. That works great until the union no longer represents the interests of players, and in this case, the minor leaguers are not represented.

 

MLB would have done themselves well by building dorm/apartment style housing near all their stadiums and making sure the players were fed well. But they don't do that. As well, it isn't as if they lose money on the minor league operations. Those are quite profitable, especially if the players are being paid peanuts. MLB and the MLBPA are likely going to lose this. They've exploited the law. This is a case where simple ethics could have solved this problem years ago. Instead, due to a complete lack of them (or perhaps pure ignorance), they are in this situation. I'm hardly a fan of organized labor, but in this case, it's hard to feel sorry for MLB and the MLBPA.

 

There is no such thing as a "living wage". There is only a wage. You produce a value and your employer pays you for that value. How you "live" after you leave your place of employment is not part of the labor equation, and rightly so for both sides. WHat do I mean by that? If your employer was in charge of your "living wage" then they will necessarily need to be in charge of everything in your life. NO one wants that because that is in essence slavery.

 

If you are so unskilled that you cannot produce a "living" wage, then thatt is society's problem as awhole and we spend hundreds of billions of dollars on anti-poverty programs (not that it does much good because the one driver of poverty is the idiotic decisions most of them make on themselves that cannot be stopped).

 

You are wrong about the "trust" structure of baseball too. The modern structure is based on union labor economics. The new employees of such systems live by the rules and wage scale drawn up by the existing union.

 

And just like Henry Ford, if the wages being paid were not high enough then you would have a shortage of employees on the floor of your plant. Baseball does not have such a problem. THey have more than enough young men willing to give it a shot for the chance of making the big payday in the major leagues. THat means that the compensation is more than adequate.

[IdahoPilgrim]

IF there are some people that work but cannot afford to live properly that is societies problem, not the employer's, and we have programs galore that spend hundreds of billions of dollars in food stamps, Medicaid, job training, section 8 housing, and other entitlements that give them help.

 

Since society is composed of all of us living together, I would say it is everybody's problem, and everybody should be concerned about it, including employers. I for one fully support the system we have in place (to which you make reference) that attempts to soften the unintended negative consequences of "pure capitalism." I do not, though, think that system, as it currently exists, eliminates the need for continuing concern and to keep an eye out for other instances when unjust inequalities exist.

[Wookiee of the Year]

As others have suggested, aside from the signing bonus issue, maybe the Twins should pay a higher minor league salary, which in theory should draw better talent into the system (all scouting being equal). Better minor league talent competing for spots on the major league roster would be a tangible benefit to the major league team, to the bottom line. Maybe a team or two is already doing that, I don't know.

Actually, that's part of the problem--under the contract, there are maximum pay limits. For example, no team is allowed to pay their first-year minor leaguers more than $1,100/month. So the Twins or any other team aren't allowed to gain a competitive advantage by paying more.

[diehardtwinsfan]

There is no such thing as a "living wage". There is only a wage. You produce a value and your employer pays you for that value. How you "live" after you leave your place of employment is not part of the labor equation, and rightly so for both sides. WHat do I mean by that? If your employer was in charge of your "living wage" then they will necessarily need to be in charge of everything in your life. NO one wants that because that is in essence slavery.

 

If you are so unskilled that you cannot produce a "living" wage, then thatt is society's problem as awhole and we spend hundreds of billions of dollars on anti-poverty programs (not that it does much good because the one driver of poverty is the idiotic decisions most of them make on themselves that cannot be stopped).

 

You are wrong about the "trust" structure of baseball too. The modern structure is based on union labor economics. The new employees of such systems live by the rules and wage scale drawn up by the existing union.

 

And just like Henry Ford, if the wages being paid were not high enough then you would have a shortage of employees on the floor of your plant. Baseball does not have such a problem. THey have more than enough young men willing to give it a shot for the chance of making the big payday in the major leagues. THat means that the compensation is more than adequate.

 

I see a few disconnects here, and to be honest, it seems as though this is spending way too much time looking at theory. The problem with theory is that it represents ideal situations, which do not exist in reality. Basic economic theory, for instance, assumes perfect knowledge, but reality suggests otherwise. As well, you are distorting what I mean and what everyone else means by a living wage. No one is saying that the employers need to control every aspect of an employees life as compensation for the "living wage". It isn't necessary. MLB, as an employer, is very much aware of what the cost of living is in these minor league cities. They don't need to dictate their employees budgets or anything of the sort, they just need to pay them enough to cover that. This isn't slavery, it's basic ethics. One could argue that the current situation that minor leaguers face is more akin to slavery than most jobs right now. These guys have no control over who they work for or what they are paid.

 

Likewise, this isn't a situation where these players are "so unskilled" that they cannot produce a living wage. It's quite the contrary. These guys are highly skilled at something that the vast majority of us could wish to be skilled at. You are right that there are more than enough young men willing to give it a shot. But what is being missed that being willing does not equate to having a skill. I'd love for a shot at MLB. No team in their right mind would ever employ me to play the game, because quite frankly, I'm not that good at it.

 

The flip side is that there are only a few places where these guys are reasonably work to ply their skills. Their potential employers have sat down and agreed on a wage compensation and then assigned these folks to their places of employment, thus eliminating their ability to maximize their earnings. This is not a situation where these players can freely choose where they want to work. As such, this is the definition of a trust, which under the law is illegal. The reason MLB, the NFL, NBA, etc. are allowed to operation in this fashion is that they have been granted an anti-trust exemption because they have allowed the players to unionize and collectively bargain for their wages. That would work just fine except that in this case, minor leaguers have no vote in the bargaining process and because of this have been unrepresented. In the eyes of the law, this is pretty clear in my opinion. These guys cannot control their wages or who they work for, and they have no ability to collectively bargain for really anything. As such, we are back to a trust situation and the anti-trust exemption does not apply. I really don't see how MLB and the MLBPA will come out OK on this.

[TheLeviathan]

I would suggest that the real villans here aren't being identified: the major league players.

 

They are the ones not allowing the minor leaguers to be at the table and a strong part of their union. As so often seems to be the case in unions, they become their only little exploitative structure with little care for those impacted.

 

At the end of the day, they're the ones with the most power to change those circumstances, not the league or the owners.

[mlhouse]

Since society is composed of all of us living together, I would say it is everybody's problem, and everybody should be concerned about it, including employers. I for one fully support the system we have in place (to which you make reference) that attempts to soften the unintended negative consequences of "pure capitalism." I do not, though, think that system, as it currently exists, eliminates the need for continuing concern and to keep an eye out for other instances when unjust inequalities exist.

 

But what is the "inequality"? A minor league baseball player enters into a contract willingly. They value their time/effort and look at the alternatives and decide to sign the contract. Their employer, which is a mixture of the major and minor league teams, analyses their value as an employee and the alternatives, and offers the salary.

 

Since both sides are making an agreement and neither side is coerced no inequality exist and your subjective opinion is worth exactly nothing. Zip....Nadda. THe salary is the "price" of labor. IT is governed, not perfectly, but still goverened by the laws of supply and demand. And again, your subjective opinion with respect to "justice" are meaningless in this equation.

 

IF minor league baseball did not "pay" enough then there would be a shortage of minor league baseball players. If such a shortage existed, then those employers would have to raise wages until they covered the shortage. No such shortage of labor exists in the minor league baseball market. In fact, as I have argued, there probably is an over abundance of employees wanting these positions so that every year team need to release players and end their dreams. Too bad, but that is how it works.

[mlhouse]

1. The problem with the living wage argument is that there is a vast group of people in this country (and world) that cannot produce enough to justify a living wage. That is a sad situation, but it isn't the employer's job to pay for this problem. It is societies and the employer more than pays their fair share of taxes in contributing to solving the problem. But to try to force a "living" wage cost society because resources are now misallocated and the welfate of everyone will suffer much more. Leave the efficiencies of business in place and address the social aspects with the proper mechanisms for that. EVERYONE is much better off.

 

2. THat they are skilled baseball players is a given, but the fact is that the vast majority of the minor league players will never make the major leagues. They play minor league ball that draws minor league crowds paying minor league ticket prices. THat is their value. ANd while you can argue that means sometimes you get to watch a Byron Buxton or Miguel Sano for a cheap cost, you also have to watch players that are much below that average. So, the prices of minor league baseball reflect this and this dictates a significant piece of the salary minor league players receive.

 

3. No, most of the labor issues do not derive from the anti-trust exemption that sports receive (and which I oppose). But rather, they derive from the extension of labor rules when the market is covered by a collective bargaining agreement. Almost all of the salary cap, draft, and contract rules would be patently illegal in a "free market". But almost every issue has been upheld by the court systems, including the draft, rookie pay scales, and the other salary control/competitive balance issues. IF the unions were to decertify like they threatened recently then the entire landscape would change. I don't even think the draft would be able to stand scrutiny (which would mean that the competitive balance of almost every professional sport would be significantly altered).

[Wookiee of the Year]

Since both sides are making an agreement and neither side is coerced no inequality exist and your subjective opinion is worth exactly nothing. Zip....Nadda. THe salary is the "price" of labor. IT is governed, not perfectly, but still goverened by the laws of supply and demand. And again, your subjective opinion with respect to "justice" are meaningless in this equation.

 

IF minor league baseball did not "pay" enough then there would be a shortage of minor league baseball players. If such a shortage existed, then those employers would have to raise wages until they covered the shortage. No such shortage of labor exists in the minor league baseball market. In fact, as I have argued, there probably is an over abundance of employees wanting these positions so that every year team need to release players and end their dreams. Too bad, but that is how it works.

mlhouse, let me ask you this: What is the harm, then, in any monopoly or in collusion? If all the gas stations in the country get together and decide to raise the price of gas by $2 per gallon, what's the harm? Only the people willing to pay $5.50 for a gallon of gas will do so, and those unwilling to pay that price won't. No one is being forced into taking part in that transaction, so why not let them do so?

 

While we're at it, why do we need the Player's Union--what's wrong with MLB declaring that the maximum player salary is $500,000 annually? No one is forced to play baseball, and I'm sure there are plenty of people who would play at that price, so is that a fair proposal?

[mlhouse]

mlhouse, let me ask you this: What is the harm, then, in any monopoly or in collusion? If all the gas stations in the country get together and decide to raise the price of gas by $2 per gallon, what's the harm? Only the people willing to pay $5.50 for a gallon of gas will do so, and those unwilling to pay that price won't. No one is being forced into taking part in that transaction, so why not let them do so?

 

While we're at it, why do we need the Player's Union--what's wrong with MLB declaring that the maximum player salary is $500,000 annually? No one is forced to play baseball, and I'm sure there are plenty of people who would play at that price, so is that a fair proposal?

 

A gas station isn't a monopoly. If all of the gas stations "got together" that would be a violation of US anti-trust laws. And even if such a cartel did exist they are almost impossible to keep together. Such cartels can only be maintained by agreeing on market share. But there is more money to be made if you cheat and members of cartels will almost certainly cheat over their quotas.

(if you are ever in Orlando there is a gas station that charges $5.99/gallon hoping to sucker tourist. It is by the outlet mall. Dont go there).

 

 

Next, monopoly or not, pricing in a free amrket means that those that are willing to pay $5.50 will and those that are unwilling will not. And, this means that those that value the product at least as much as $5.50 will buy and those that do not value the product as high will not. This is how the free market place polices the economy and creates teh hidden hand that maximizes everone's utility (welfare). When something interrupts such a process, then the right buyers are not buying the resources that value those resources the most, usually because some government entity lets them get better deals.

 

AS far as the max salary issue in lieu of a players union, that would essentially be illegal (again, the CBA freely negotiated with a union and employers allows these types of restrictions) collusion amongst owners and most owners would cheat such a value out of existence although there is a conceivable max salary that could be created that is a max salary because it would be economically impossible to pay, lets say $150 million/year.

[mlhouse]

And, I forgot to address the issues of collusion and/or monopoly.

 

THe reason why restrictions on monopolistic practices, of which collusion is one, is that it leads to a undersupply of a commodity and economic rents being paid to that monopolist. Under a competitive market, the market would demand more at a lower price and suppliers would supply more at a lower price. This articfial situation hurts the overall welfare of society while benefiting one party.

 

Now, there are situations were monoplies do exist. We recognize that there are some products that require extensive capital infrastructure investment that it would be very difficult to create a truly competitive market. Electiralc power and cable television are two examples of such monopolies. HOWEVER, we also understand that in such situations that these monopolies need to be regulated. So, public commissions usually regulate the rates that these monopolies can charge, usually guaranteeing them a profit over cost.

 

On the other hand, it is much more difficult to create a monopoly anymore. Think of the telephone company and how technology pretty much destroyed the monopolistic practices of the Bell system.

 

Right now, the biggest monopoly players is the government and they are incredibly immune to challenges to their monopoly powers. Government Public Education is probably the biggest monopoly operated in the world, with entrenched bureacrats and unionized teachers that are adapt at the nasty politics of defending their turf. And, the American public suffers for this because their product is not efficient or effectie.

[Thrylos]

1. The problem with the living wage argument is that there is a vast group of people in this country (and world) that cannot produce enough to justify a living wage. .

 

I so cannot enumerate the issues I have with this one sentence...

 

Let me just simply say a couple of things:

 

a. A living wage should not require justification. Period. Full stop.

b. Cannot divorce the MLB team profits (MLB teams are paying MiLB player salaries not the MiLB team owners who get the MiLB game ticket receipts) from the MiLB player salary equation. That's where they belong.

[mlhouse]

I so cannot enumerate the issues I have with this one sentence...

 

Let me just simply say a couple of things:

 

a. A living wage should not require justification. Period. Full stop.

b. Cannot divorce the MLB team profits (MLB teams are paying MiLB player salaries not the MiLB team owners who get the MiLB game ticket receipts) from the MiLB player salary equation. That's where they belong.

 

Lol. I can tell all of these advocates do not and never will employ people. Your tune changes when you pay FICA taxes, workers comp insurance, federal and state unemployment insurance. Then your "deserving" employees file bogus work comp and unemployment claims, and then run off to file bogus civil rights claims.

 

Here are is the deal. Stop talking about wages unless you are going to employ people yourself. An employee's wage is a mutual agreement between the employer and employee. Once the agreement is made other's opinions are meaningless.

[ashbury]

Here are is the deal. Stop talking about wages unless you are going to employ people yourself.

 

Moderator's note: Here are is the deal. You do not employ the people you are talking with here, and thus do not have standing to tell them what they may or may not say. Please keep the discussion respectful, or expect the moderation team to take further steps beyond the private messages already sent.

 

The Comment Policy contains an entire section on respectful discourse: http://twinsdaily.com/showthread.php/8837-Twins-Daily-Comment-Policy-last-revision-September-2013?p=164884&viewfull=1#post164884

[glunn]

When you own General Motors then you can make the decision to pay the janitors as much as the CEO. The funny thing about these type of claims by people is that from my experience the business owners that are the most liberaral are the cheapest people and screw the lower end employees the most.

 

 

The owners of General Motors are the shareholders, but they do not set the salary of the CEO. Such salary is set by the board of directors, most of whom are cronies of the CEO and the inside control group.

 

We live in a world where wealth perpetuates itself. Kids born to wealthy families get excellent educations and have a relatively easy path to success. Kids born to middle class families have to work harder. And kids born to poor families tend to get poor educations and end up in poverty.

 

This is a system designed by the rich, for the benefit of the rich. If we made the effort to make a great education available to poor children, then the system would be fairer. But as things stand now, it seems to me that the race to home plate lacks integrity when a handful of people start at third base and the vast majority start outside the stadium.

 

I personally have benefited from this system, but the unfairness bothers me daily.

 

As for liberals being more unfair to employees than conservatives, I challenge you to provide a shred of evidence for this. My anecdotal experience does not support this.

[mlhouse]

The owners of General Motors are the shareholders, but they do not set the salary of the CEO. Such salary is set by the board of directors, most of whom are cronies of the CEO and the inside control group.

 

We live in a world where wealth perpetuates itself. Kids born to wealthy families get excellent educations and have a relatively easy path to success. Kids born to middle class families have to work harder. And kids born to poor families tend to get poor educations and end up in poverty.

 

This is a system designed by the rich, for the benefit of the rich. If we made the effort to make a great education available to poor children, then the system would be fairer. But as things stand now, it seems to me that the race to home plate lacks integrity when a handful of people start at third base and the vast majority start outside the stadium.

 

I personally have benefited from this system, but the unfairness bothers me daily.

 

As for liberals being more unfair to employees than conservatives, I challenge you to provide a shred of evidence for this. My anecdotal experience does not support this.

 

1. The shareholders set the wages of the CEO to the same extent they set the wages of the lowerest paid employees. Like I said in a previous related response, when you own your own company you can set the salaries of the janitors equal to the salary of the CEO. I DOUBT YOU WOULD though. You would pay the market wage for your managers and janitors. Nothing more, and nothing less.

 

2. Your comments on education are ridiculous. We pour money into the education of the lowest class. More money per student is spent on low income areas than the highest end. THe problem is more cultural than money. The poor have very poor habits and make very poor choices. THey are burdened with children before they are ready and are more prone to drug and alchohol abuse. THese are their choices, culturally influenced.

 

3, Based on the undisputed facts of the above, the only way that you can "equalize" education is to tear down the people who are successful......great policy.

 

4. As far as anecdotal evidence about the liberals being hypocrites. Two words: Al Franken. The fact is that liberals are more into telling others what they should pay rather than creating jobs and paying wages themselves.