Minor League Wages and the New Commissioner

Editor’s Note: This is the sixth in a 10-part series commemorating baseball’s new commissioner with advice for his tenure. To read more about this series, click here.

In the 20 years since the 1994-1995 player strike, baseball has enjoyed a period of almost total labor peace. From 1972 through 1994, Major League Baseball endured five strikes — 1972, 1980, 1981, 1985 and 1994 — and three lockouts — 1973, 1976, 1990. While there have been some close calls since, the last two decades have not seen a single game cancelled due to labor disputes, arguably the largest feather in departing commissioner Allan H. (Bud) Selig’s cap.

All is quiet on the major league front for incoming commissioner Rob Manfred, as the Major League Baseball Player’s Association now spends most of its time deciding just how harshly its members should be punished for the use of performance enhancing drugs. Rather, Manfred’s fight will come at the minor league level. Two lawsuits challenging the minor league system were filed in 2014. The labor peace at the major league level is predicated on the cheap talent provided by the minor league system, and quashing the threats of these lawsuits will be a top priority of Manfred’s early days in office.

In Feburary, Aaron Senne, Michael Liberto and Oliver Odle sued Major League Baseball and its teams claiming they were denied minimum wage and overtime pay due. The suit notes minor leaguers make as a little as $1,100 per month, which, as Baseball America noted, is “below fast-food standards” on an hourly basis. Selig has denied all allegations of misdeed by MLB or Minor League Baseball. Stan Brand, MiLB’s executive director, was much more forceful in a statement released in December. Brand compared the threat as equivalent or greater than the threat posed by attacks on baseball’s antitrust exemption in the late 1990s. Brand issued a statement supporting MLB’s side of the lawsuit:

I do not want to overstate the threat this suit presents, but I think my honest assessment is that it is equally perilous for our future as the antitrust repeal was in the 1990’s.

So, once again, as I did then, I will you ask you to heed the clarion call, man the battle stations and carry the message to Congress loudly and clearly: The value of grassroots baseball and our stewardship of the game needs to be protected against the onslaught of these suits.

The bedrock of baseball’s labor system has been the lack of competition among minor leagues since the establishment of the National Agreement in 1876 — 14 years before the Sherman Antitrust Act was signed into law. It is this agreement which gave the reserve clause teeth in its early days, as any minor league team that dared sign a “reserved” player risked expulsion from Organized Baseball. This strategy worked to keep salaries low even in the days when minor league teams were unaffiliated and unattached to major league squads.

The rise of the “chain store” minor league system we know now, pioneered largely by the Branch Rickey Cardinals in the 1920s and expanded following Kenesaw Mountain Landis’ departure from the commissionership in the 1940s, only led to more wage suppression. “Quality out of quantity” was Rickey’s mantra, and his Cardinals went so far as to buy entire minor leagues to get that quantity. With so many players, Rickey had the power to tell a player looking for a raise to simply quit if he didn’t like it — the players were hamstrung by the reserve clause, and Rickey always had somebody else to promote.

The chain store model hurts fans, too, as the minor leagues have become little but glorified instructional leagues, run for the parent clubs and with little attention paid toward winning or providing a compelling product on the field. Players who show special talent are rushed on to the next level. Wins and losses are forgotten as soon as the next lineup is drawn up. Independent teams such as the Portland Mavericks have been driven out of the minor leagues. Even if the talent is not major league quality, competitions like the College World Series, World Baseball Classic and Caribbean Series prove baseball can be compelling no matter who plays, as long as something is at stake.

The reserve clause doesn’t have the power it did before Curt Flood and free agency, but it still has a hold on minor leaguers, who are unable to become free agents until they spend all or part of at least seven seasons on a minor league roster. And without the competition for players seen at the minor league levels, salaries have stagnated. From the lawsuit, “While major leaguers’ salaries have increased by more than 2,000 percent since 1976,” when free agency began to take hold in the major leagues, “minor leaguers’ salaries have, on average, increased only 75 percent in that time.” Major league revenue, meanwhile, was $7.5 billion in 2012, and franchise values — which include the value of the minor leaguers controlled by the teams — have increased by 50 times or more in the past 40 years.

If successful, the suit wouldn’t necessarily remove Major League Baseball’s monopoly control over the minor leagues. It would merely force MLB to increase pay to conform with minimum wage laws. With its antitrust exemption still intact — the same exemption Brand is looking to get coded into law by Congress — the minor leagues would remain a non-competitive labor market with a significant cap on wages as a result. The cap would simply become high enough for minor leaguers to live sustainable lives while attempting to make it to the top.

The second lawsuit, filed in December by former minor leaguers Sergio Miranda, Jeff Dominguez, Jorge Padilla and Cirilo Cruz, does take aim at Minor League Baseball’s exemption from antitrust laws. The suit challenges the legality of the first-year player draft, international and domestic bonus pools, and the minor leagues’ version of the reserve clause.

As Nathaniel Grow wrote at FanGraphs in December, the lawsuit faces an uphill battle in many respects. The Curt Flood Act allowing major leaguers to file antitrust lawsuits includes specific language disallowing the same from minor leaguers. The 1953 decision Toolson v. New York Yankees provides legal precedent for the antitrust exemption with regard to the minor leagues. And, as I wrote last year at The Score, baseball has always been a “jealously guarded institution” by men of the law. Even if the legal arguments against baseball are immaculate, it would be of little surprise if the Supreme Court ruled in the league’s favor regardless.

Still, Miranda vs. MLB holds significance even if the case fails to proceed past district court. All four defendants are Latino, as is a constantly growing proportion of Major League Baseball’s work force. An all-time high 26.9 percent of major leaguers were Latino in 2014. This growth extends to the minor league level as well. Every team has built academies in Latin America. With the draft forcing hands off American prospects until they reach 18 years of age, Latin American scouting and development has become the cheapest method for teams to sign talented young players. Now, more than 40 percent of minor leaguers are Latino-born.

The proportion of Latinos in baseball has been growing steadily for the past three decades. This growth, and the entirety of Major League Baseball’s labor policy, can be summed up by a 1985 quote from Pirates superscout Howie Haak, the man who “opened up” Latin America for the Pirates and was responsible for bringing Roberto Clemente, among others, to Pittsburgh.

“It’s simple,” Haak told Peter Gammons in 1985. “When was the best time for developing white players in this country? In the Depression.” This sentence explains the entirety of baseball’s relationship with labor for the past century. By the 1980s, the draft, labor laws, and the strength of the player’s union had made Rickey’s “quality out of quantity” idea untenable in the United States. Not so in the Caribbean. Former Dodgers executive Al Campanis said in 1986, “They’re hungry,” referring to players from the Dominican Republic. “They have fairly good builds. They want to get fame and acclaim and money to eat and in that country that means being an entertainer, prize fighting or baseball.”

If those players do make it to the United States, they are greeted by a spring training that pays nothing, minor league wages that pay as little as half what some players could make as a dishwasher at TGI Friday’s, and the difficulties of maintaining the necessary strength and nutrition required by the daily grind of the game. Witer Jimenez, a former player who has joined the Senne case, told NBC News, “They didn’t prepare me for anything. They didn’t say anything about [the wages]. We had to suffer in silence. What they did to me was not just.”

As the major leagues continue to set revenue highs on a yearly basis and municipalities line up to offer public money for new ballparks, this continuing exploitation of labor, both domestic and foreign, should disturb anyone who cares about baseball. Major League Baseball will attempt to solve the problem by quashing these lawsuits, but even with victories in the courts, the people affected won’t go away.

Let’s pause briefly to consider the numbers: The federal minimum wage comes out to $1,265 per month (40 hours/week * 4.33 weeks/month), or an extra $165 per player per month in those rookie leagues at the minimum salary. So for a rookie league team employing 30 players, that’s an extra $4,950 per month or an extra $29,700 over six months. In Florida the minimum wage is $8.05 (80 cents higher), which comes out to $1,395 per month, an extra $295 per player per month, an extra $8,850 per month per 30 person team, and $53,100 over six months. As you can see it adds up pretty quickly. In California the minimum wage is $9.00 => $1,558 per month => extra $458 per player per month => extra $13,740 per month for a 30 person team => extra $82,440 per year. Seems like something MLB can afford, but enough that a small business like MiLB might sweat over.

As Stan Brand says, what’s at stake here is Major League Baseball’s “stewardship of the game.” Perhaps Minor League Baseball as it currently exists could not do so if forced to pay higher wages. But if this is the case, its owners can no longer afford to be stewards of the game. They are not entitled to run the show and skimp on the checks simply because it has always been this way.

It is Commissioner Manfred’s job to convince you, and more importantly, convince our lawmakers and judges, of the exact opposite. It is his job to convince you that baseball’s labor system is the only labor system. It is his job to convince you baseball can only run on his magical engine, and it is his job to convince you if we dare to step outside, we’ll all freeze and die.

The minor leagues are great for their cities and great for the baseball fans who love the game no matter the level of play. But we don’t deserve them if we can’t pay the men who supply the labor enough to live their day-to-day lives. Commissioner Manfred can fix this problem, if he desires, and I hope he will. But knowing the history of the office, and knowing his bosses, he will instead do everything he can to bury it.