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.

Esteban German played 11 minor-league seasons, but didn't make a lot of money doing so. (via Brent Moore)

Esteban German played 11 minor-league seasons, but didn’t make a lot of money doing so. (via Brent Moore)

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.

A History of Defunct Team Nicknames
What happens when you leave the power to nickname baseball teams to sportswriters? Quite a lot, apparently.

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.


Jack Moore's work can be seen at VICE Sports and anywhere else you're willing to pay him to write. Buy his e-book.
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bucdaddy
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bucdaddy

Law of supply and demand at work, for better and for worse.

Paul G.
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Paul G.

Kinda, sorta. Baseball effectively has a monopoly. Monopolies do not respond to supply & demand the same way as companies with competition.

pft
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pft

That only applies in a free market, this is a market more suitable for Mao’s China and Stalins USSR

bucdaddy
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bucdaddy

You make it sound like voluntarily signing a contract to play MiL ball for peanuts and the hope against hope of making the majors and cha-ching! someday, as hundreds of young men do every year and thousands more would sell their mothers for the chance to do, is exactly like being sent to the Gulag. It makes it hard(er) to take you seriously. It’s kind of repulsive, actually.

Chuck2a
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Chuck2a

Every business operating in any free market still has to follow local laws, and in this country, this includes labor laws. Slave labor is no longer acceptable.

bucdaddy
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bucdaddy

“slave labor” That’s a little strong. Nobody forces anybody to play MiL ball. There’s a glut of people who think they can, though. Lots of guys who would kill for the chance. Should they all make at least minimum wage? I dunno. But I don’t think this is at all like single moms who have to hold down three jobs to pay the rent. These are young men, 95 percent of whom will soon be encouraged to get on with their REAL life’s work anyway. Maybe MiL players ought to be treated like bartenders and servers, and the team can… Read more »

Paul G.
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Paul G.

I would like to know if the minor leaguers get anything beyond their wages. I know they get meal money when on the road. Is that it or are there other benefits? For that matter are there any additional expenses? Do they have to pay their own way from wherever they live to spring training or does the team pay for it? The overall picture may look better or worse depending. But, yes, minor league players should know what to expect before they show up. It appears that at least some players are not being briefed properly. It is interesting… Read more »

pft
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pft

One thing that is being overlooked is how is the minor league compensation system affecting the talent pool. Could it be the poverty wages for years before being added to the 40 man are discouraging athletes from chose baseball as their sport? The declining number of African Americans the past 20 years suggests this is so, and it may very well be that its affecting white athletes choice to play baseball, some with fewer athletic options and with student loans to pay back who may not be signable if drafted out of the bonus money, and hence are not drafted… Read more »

tz
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tz

Another thing too – college football and basketball provide the opportunity for a lot of 18-23 year old guys a chance for some glory on a national stage, because of their popularity. College baseball doesn’t have the same following, and minor-league baseball life just plain sucks.

So if you are a borderline pro talent in baseball and one of the two big-ticket college sports, which would you choose? The possibility of spending a lot of time in the minors with nothing to show for it has to be a huge turnoff.

Chuck2a
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Chuck2a

In the 3rd paragraph from bottom, ‘…Perhaps Minor League Baseball as it currently exists could not do so if forced to pay higher wages.” I don’t think this is correct now. The MLB teams pay the salaries of the players in their system, even when they are playing in the minors.

Tim
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Tim

I think minor league talent is the biggest untapped resource in baseball. If you look at the level of non standard coaching, i.e. nutritionists, sports psychologists, trainer, top notch training facility, being invested in the players . On top of the inability to live and behave like a professional athlete. Leads to out of shape players with garbage mental toughness. I almost think part of the reason that top draft picks succeed more then others, is that with the bonuses they receive, they’re able to focus on being a baseball player, not figuring out how to eat tomorrow. I firmly… Read more »

bucdaddy
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bucdaddy

I’m not sure why anybody would pay (or at least pay more) for something that hundreds of young men would probably do for free.

MLB, after all, could treat MiL like an internship and, as many companies that use and discard interns do, pay the players nothing. Or call it an extended job interview/tryout.

Not saying that would be right, understand.

Chuck2a
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Chuck2a

Buckdaddy, Your analogy to unpaid internships is correct but never right. Companies taking advantage of interns is such a large problem, to the point where prospective interns started expecting nut to be paid for their labor. But, companies willingness to take advantage of the weakest in our society does not make the practice right. If this is your position, I hope you are never in position to ever hire anybody or be in power over anybody. So if you are able to take advantage of people, you should do so. Congratulations on the most callous statement here. I have hired… Read more »

Bpdelia
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Bpdelia

But they WOULDN’T do it for free. This is a total myth. By the time i was 22 i was married with one kid and another on the way. If i had been a late blooming type player i would absolutely have quit. Baseball is fun and all but money is money and all the fun of baseball or basically erased at night when you are broke and bored. People absolutely would not do this for free. The only reason Perle DO it is because of the belief they will make it. Hence why when you look at transaction reports… Read more »

dshorwich
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dshorwich

Chuck2a has made the most relevant point in all this: MLB pays the salaries, not the minor league teams themselves. So the Giants would need to pay another $82,440/yr for their High-A affiliate in San Jose? Somehow I think they could afford that, as well as the increased salaries for their other affiliates – the total cost per franchise would be less than a utility infielder makes. The apocalyptic language of Stan Brand and others is absurd and disingenuous, and sounds very much like the kind of nonsense the owners spewed in the mid-’70s when free agency loomed. They were… Read more »

4min33
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4min33

” So the Giants would need to pay another $82,440/yr for their High-A affiliate in San Jose? Somehow I think they could afford that, as well as the increased salaries for their other affiliates – the total cost per franchise would be less than a utility infielder makes.” Well, funny you mention the Giants, as the plantation mentality in SF extends to the major league club labor dealings–From US Dept of Labor: San Francisco Giants pay employees $545,000 in back wages, damages US Labor Department finds clubhouse and administrative workers not paid properly SAN FRANCISCO — The San Francisco Giants… Read more »

Yehoshua Friedman
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Yehoshua Friedman

MLB can and should subsidize MiLB player salaries so that the guys playing can make a living wage. The vast majority of Minor League players never make it to the Big Show. MLB drafts and signs players, signs non-drafted players, uses them up and throws them away. With the odds being what they are of making the Majors, a young guy is better off studying and going to college and playing ball on the weekends for fun unless he is really IT — or if he comes from the DR and has no choice. Players can get college scholarships to… Read more »

Casey Bell
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This is so similar to the situation with college football and basketball. The players get very little of the billions being made off of their efforts. Meanwhile the NFL benefits by having the colleges serve as defacto development leagues funnelling players to them. The average major league salary is what, about $4 to $5 million dollars, right? And the average minor league salary is probably around $12 to $15 thousand I’d guess. So the average MLB player makes about 350 times the minor league average! My suggestion would be this. Have each MLB player be assessed 0.5% of his salary,… Read more »

ThePuck
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ThePuck

‘My suggestion would be this. Have each MLB player be assessed 0.5% of his salary, with the money going into a pool to pad the pay of minor league players, coaches, managers and umpires. These funds would be matched by the owners.’

Why on Earth would the MLB players agree to do this and why would anyone think that’s fair? Why should MLB players contribute to the pay of minor leaguers?

Casey Bell
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Your question about why MLB players would want to share a small fraction of their earnings with minor league players is like asking why lawyers and doctors and business men would want to pay taxes to support schools. Those lawyers and doctors and businessmen benefitted directly and/orindirectly from the public school system. Once they become financial successes soceity believes that they have an obligation to “payback” a little of their income by way of taxes to support future generations. Likewise, I feel that MLB players who graduate from the minors and earn 7 or 8 figure salaries have an obligation… Read more »

Bpdelia
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Bpdelia

Seriously? Umm? Human decency? Karma? A nod to the fact that an entirely self centered ego centric view of reality has contributed to unimaginable suffering in our world? Or maybe because none of those guys would be major league players without the minor leagues and in order to HAVE a minor leagues you need all those other players to play with. Or just not being jerks. Fair? It truly astounds me when people use the word fair in this type of anti tax rhetoric. The entire world is a complex system. Nothing works alone. Without the highways business is constrained.… Read more »

Chuck2a
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Chuck2a

It is all fine to create such a player fund, but that does not take the team off the hook from their legal responsibility to pay minimum wage. This is the law. If any tiny business is expected to do so, we can certainly expect it from a multi billion dollar business.

Mac Vernon
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Mac Vernon

MiLB players need union representation to enable them to bargain with MLB. Withholding their labor would enable them to get their just rewards. The big clubs would be better off just accepting the relatively minor cost increases to make this issue go away. Just saying no can only work for so long.

Bpdelia
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Bpdelia

Yes but impossible. Because this labor pool is fairly replaceable and because men between the ages of 17-24 are not terribly forward thinking the available scab labor force would be too huge to pull it off. If the modern labor union can’t pull of organizing the service industry it won’t be able to do this. The myth of the ubiquitous corrupt mobbed up union has been too widely accepted as actual truth for the modern labor movement to get any sympathy with the public. Pretty nifty trick considering the give day week, 8 hour day, safety, bathroom and lunch break.… Read more »

a eskpert
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a eskpert

Just let the Yankees do Yankees things.

Grandpaboy
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Grandpaboy

How about a $.15 fee added to the price of all MLB tickets with the proceeds going into a MiLB player’s pool? 15 cents x 74 million tickets sold (roughly last year’s number) yields $11.1m in revenue. If my back-of-the-napkin numbers are correct, there are about 3000 MiLB players from Low-A through AAA (30 MLB parent teams x 4 levels x 25 players.) Give each of them an extra $3,200 per year–that’s $9.6m. Then, there are roughly 1,250 players in various forms of rookie ball (short-season, etc.) Each of them gets $1,000–that’s another $1.25m, and $250k is left over for… Read more »

Casey Bell
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Why make fans pay a tax to benefit minor leaguers? Ticket prices are already way too high. The ones who should be supporting the minor leagues are the ones who benefit the most from the minors, namely owners and major league players. The problem isn’t that there’s not enough money in baseball to provide minor leaguers with more reasonable compensation. Baseball is a multi-billion dollar business and there’s more than enough money to go around. The problem is the way that the money is currently distributed is out of balance. There is no way that the average major league player… Read more »

Bpdelia
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Bpdelia

Aaaaaaaaannddd that’s a pretty good summation of the entire post Vietnam era neo liberal economic structure of the world economy on general.

Chuck2a
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Chuck2a

All these solutions are quite imaginative, but really, all that is needed is for the labor board and/or the courts to do their jobs. There is nothing complicated about minimum wage. I can’t believe anybody making such an issue with minimum wage, considering that it has not kept up with inflation the last few decades and how much below they poverty line it has fallen.

Jack
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Jack

If major league baseball does not settle this quickly and relatively quietly, they are making a big mistake. The treatment of minor league players, in this scheme of things, is a disgrace.

Bpdelia
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Bpdelia

Ahhh but never underestimate the other side of these arguments. The federal minimum wage is quite literally sub poverty wage. A forty hour week after payroll taxes leaves somewhere around $240 in net income. And raising that is actually a huge political battle ground with millions of rational but poorly informed and economically secure people arguing that it should not be raised. A great example of this is my father. In the Regan era (he’s slowly become far more liberal… He’s more like a late 50s republican now) my father would rail against greedy unions. But when i graduated high… Read more »