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Player Salaries Newsbeat

Thursday, August 14, 2014

Searching for Racial Earnings Differentials in Major League Baseball

This never would have happened if baseball adopted a racial salary cap.

White players do not seem to get paid less when they re-sign more than a year before free agency, but black players do.  Latinos take a severe discount and sign for $4.9 million per WAR when they sign early. Obviously Albert Pujols’ contract plays a role in this, but even excluding him the earnings per WAR among Latinos who re-signed more than a year before reaching free agency would be $5.3 million, far less than the pay per WAR for white or African-American players.

This is actually not surprising. An individual’s willingness to sign early is largely based on his desire for financial security. If a player has strong earning potential outside of baseball, he will not be as willing to surrender potential future earnings for current financial security. A player who is more likely to face economic hardship if he gets injured and fails to earn a fortune in baseball will be more amenable to a team-friendly discount.

 

RoyalsRetro (AG#1F) Posted: August 14, 2014 at 09:16 AM | 19 comment(s)
  Beats: player salaries, race

 

 

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