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Wednesday, November 17, 2021

MLB’s minimum wage has fallen behind. Players ought to fight to lift it up

Additionally, MLB’s minimum is the lowest amongst major sports, and no other sport leans on its minimum-salaried players like baseball does. Consider that 63.2% of all players to step on the field in 2019 (the most recent year we have complete, full-season data from the MLBPA) had less than three years of service time. They accounted for 53.6% of days of service time accumulated, but they combined for only 9.8% of player pay.

At the opening of the NHL season this year, 23% of players were paid within 10% of the league’s lowest wage. In the NBA, it was just 3%.

The average MLB salary climbed to more than $4 million in 2016, but it’s plateaued there. That’s the average, though, which is dragged upward by 11 players who earned more than $30 million last season. The median salary in 2019 was $558,400; a new minimum salary and a scaled system would help that number.

Moreover, since 2012, the minimum salary is up only 19%, not even keeping pace with United States inflation (20.5%). The average MLB salary climbed 30%, however.

RoyalsRetro (AG#1F) Posted: November 17, 2021 at 10:23 AM | 27 comment(s) Login to Bookmark
  Tags: labor issues

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   1. DL from MN Posted: November 17, 2021 at 10:59 AM (#6053279)
Union TV actor "regulars" get between $3000 and $9000 per episode. MLB players are TV stars who produce 162 episodes a year (with very good ratings). An $800,000 minimum salary would be $5000 a game which would put them on par with TV actors. That doesn't even include the revenue impact from the live audience.
   2. sanny manguillen Posted: November 17, 2021 at 12:03 PM (#6053285)
I've assumed the owners are very happy with the structure of the game and will give ground on something like the minimum pretty easily to keep the structure in place.
   3. JRVJ Posted: November 17, 2021 at 12:12 PM (#6053287)
2, absolutely.

In the context of collective bargaining, you really shouldn't appraise issues on a stand-alone basis. However, if the ONLY thing that were to change in the 2021-2022 CBA is that minimum wage goes up to $1MM per player, that would be great for the owners, good for young players and possibly a disaster for players already into arbitration and into their FA years.
   4. DL from MN Posted: November 17, 2021 at 12:49 PM (#6053291)
A higher minimum will give the arbitration players a higher base to start from. Instead of the first arbitration year earning $1M they'll get $1.3M. The only players it would hurt are the few already signed to multi-year contracts.
   5. JRVJ Posted: November 17, 2021 at 12:56 PM (#6053292)
4, I say it would be a disaster for players already in arbitration in the sense that if that's all they got out of the CBA, they didn't get much (yes, the ceiling is a little higher, but if MLBPA is not going to try to improve and/or buttress the arbitration system, then what the heck is this CBA process about?).
   6. Pat Rapper's Delight (as quoted on MLB Network) Posted: November 17, 2021 at 01:10 PM (#6053294)
I haven't checked my database, but it feels like 63.2% of all players to step on the field now are relief pitchers who account for 53.6% of innings pitched, 9.8% of whom I've ever heard of.
   7. 57i66135 is a hard word for me. Posted: November 17, 2021 at 01:17 PM (#6053295)
"a rising tide lifts all boats"
   8. RoyalsRetro (AG#1F) Posted: November 17, 2021 at 01:18 PM (#6053296)

A higher minimum will give the arbitration players a higher base to start from. Instead of the first arbitration year earning $1M they'll get $1.3M. The only players it would hurt are the few already signed to multi-year contracts.


As Travis points out, a higher minimum wage also makes it less likely they'll be non-tendered, as the alternative option wouldn't be as cheap anymore.
   9. DL from MN Posted: November 17, 2021 at 01:20 PM (#6053298)
I haven't checked my database, but it feels like 63.2% of all players to step on the field now are relief pitchers who account for 53.6% of innings pitched, 9.8% of whom I've ever heard of.


Those guys are never going to earn much more than the minimum even after accumulating the required service time. Getting relievers to arbitration faster will just get them cut from the roster sooner. Many of them get released once they're out of options and can't be easily used as the 27th to 30th players.
   10. Karl from NY Posted: November 17, 2021 at 02:40 PM (#6053313)
I bring this up in every minimum wage thread. This is how the minimum really works: Each new CBA makes a big increase up front but then only small increases over its years in effect.

This is because the union membership who agrees to each CBA are acting in their own interest. An immediate bump tends to benefit a significant proportion of current members, but future increases mostly benefit future union members, not the ones that are currently voting.

Put another way: Players don't make the minimum for long. They either get better and make more, or wash out of the league. CBA voters have little interest in raising the minimum in future years.

The minimum is low right now because it's been a long time since the last CBA. Any new CBA will raise it now but with small increases to come thereafter.
   11. BDC Posted: November 17, 2021 at 03:26 PM (#6053317)
TFA presents the salary structure of baseball as if there's significant inequity compared to the NFL and NBA, but I'm not quite seeing it. Some sport is going to have to have the lowest minimum salary, after all. Nor does it seem scandalous that so many baseball players earn near the minimum. As Pat points out, a bunch of them are relief pitchers.

Though I would imagine that many of them earn less than the ML minimum in any given season; if they are on the AAA shuttle most probably only earn the ML rate when actually in the majors, and much less when back in AAA – or am I misunderstanding the process? That might be the real inequity. NBAers on 10-day contracts are analogous.

TFA sidesteps the issue of how many NFL players make close to the minimum, so I infer that a lot of NFL players don't make much more. (There is a certain amount of going up and down from lower levels of the roster in the NFL, too.) TFA notes that the NFL has a service-time scale; but most NFL careers are really short and a large percentage of NFL rosters are as anonymous as MLB bullpens.

NBA rosters are much smaller, NBA careers are longer; baseball is somewhere in the middle.

TFA is outraged that outstanding young players make so little, but as we have noted before in these threads, nearly all of those guys soon cash in at stratospheric salaries and the injustice is only in the timing of when they make the most money.

Anyway, it probably isn't as simple as straight comparison of minimum full-year salaries.
   12. RoyalsRetro (AG#1F) Posted: November 17, 2021 at 03:27 PM (#6053318)
This is because the union membership who agrees to each CBA are acting in their own interest. An immediate bump tends to benefit a significant proportion of current members, but future increases mostly benefit future union members, not the ones that are currently voting.


I always wonder how much influence agents have on the union. Obviously they make a lot more money on the 1%.
'
As Pat points out, a bunch of them are relief pitchers.


Who are more valuable IMO than a special teams NFL player or the 12th man on an NBA team.
   13. Walt Davis Posted: November 17, 2021 at 03:30 PM (#6053319)
Players don't make the minimum for long.

Well, 3 years of service time seems pretty long to me. And as noted above, it sets the floor from which their arb salaries start if they're good enough to survive past those 3 years. Current pre-arb players have all sorts of reasons to want to see the minimum go up during a CBA.

And then there's the "scaling" idea. Min of $1 M for those with <1 year, raise (mid-season when appropriate) to $1.5 M for 1-<2 years, raise to $2 M for 2-<3 years, raise to $3 M for 3-arb eligible. That benefits nearly all current pre-arb players, benefits current arb players in greatly increasing the cost of replacement players, reducing the risk of non-tendering. Need to put some mechanism in there for all those relievers nobody wants to pay more than $1.5 M ... anybody with 2-<6 years service time becomes a true FA upon release/non-tender for example.

There are other ways to do pretty much the same thing ... arb starts after 2 years service time, FA after 5 years ... or service time is time on the 40-man (doesn't help good young players).

But I don't think we've seen any indications that big changes are coming. I won't be shocked if we see what is essentially a short-term extension of the current agreement because neither side is sure what post-covid revenues are going to look like and the PR risks of a work stoppage must be very high in the current climate. And god forbid the gambling gaming partners discover that they get as much revenue during a summer without baseball as with it (people will bet on anything).
   14. Walt Davis Posted: November 17, 2021 at 04:00 PM (#6053325)
BDC ... yes, a guy on the shuttle earns MLB minimum while on the 26-man roster (or MLB IL) then earns a 40-man salary while in AAA (assuming they're still on the 40-man) ... which, per the internet, is $46,000 in year 1 then $93,000. If they guy was a ninor-league FA during the offseason, especially if a former MLer, then they might have negotiated a higher minor-league salary and/or a higher ML salary. I'm not quite sure how it works if the guy is out of options or was a FA with 6+ years of service time, their ML salary might become guaranteed once they make the 26-man (almost certainly is if they make the opening day roster).

The basic approach then for your fringier relief "prospects" -- keep them off the 40-man as long as possible. "Ideally" they aren't added to the 40-man until added to the 26-man.** Use them for a month (cost about $95,000) ... if they're doing really well, keep them up, otherwise send them down (burns the first option) but keep them on the 40-man (otherwise DFA and waivers and you lose them). Repeat at your whim for the rest of this season and the next two until options are exhausted.

You get a guy like Dillon Maples (Cubs). He's pitched in the majors every year from 2017-21; he is a bit more than a month short of 2 years service time. Per b-r's transactions, he seems to have finally become a minor-league FA (out of options), turning 30. This year he set a (ML) career high with 31 IP. Don't feel too sorry for him, he should have around $1 M in MLB earnings and probably another $150-$200 in 40-man earnings. That's already pretty good lifetime earnings for a guy who never went to college. Hopefully he's made wiser investments than buying a bar.

For perverse incentives, arguably the best thing that can happen to a fringe reliever is to suffer a season-ending injury while on the 26-man, then they're guaranteed ML minimum for the rest of the season. If you were that fringe-y, no guarantee you were ever going to get a full year's service time even over 3+ seasons. No wonder they're all throwing 102.

** Adding them to the 40-man without adding them to the 26-man burns their first option right away. If you add them directly to the 26-man then no option is used until you send them down. So no point adding them to the 40-man until you have to. Depending on age at signing, teams have 3+ years before a player must be added to the 40-man or be made available to other teams.
   15. Karl from NY Posted: November 17, 2021 at 04:08 PM (#6053328)
Well, 3 years of service time seems pretty long to me. And as noted above, it sets the floor from which their arb salaries start if they're good enough to survive past those 3 years. Current pre-arb players have all sorts of reasons to want to see the minimum go up during a CBA.


3 years isn't all that much. What percentage of CBA voters are pre-arb? Maybe 30%, not enough to outweigh the rest of the union. And that's spread over the three years. Only 10% would have interest in having a new CBA raise the minimum in its 3rd year.

I'm also not convinced that the minimum has significant effect on arb salaries. There's no real standard for arb, but it seems to roughly escalate from 40% to 85% of FA salaries through the three arb years. I think FA salaries swinging by a few million as they tend to do overwhelms any effect from a couple hundred K of minimum.
   16. BDC Posted: November 17, 2021 at 04:12 PM (#6053329)
Thanks, Walt! Obviously the major-league club is still paying, in effect, a floor of the ML minimum for the season times 26, and that is what the union cares about and is what's at question here. But the situation for any individual player is of interest to him and to Internet commentators :)
   17. Zach Posted: November 17, 2021 at 04:17 PM (#6053330)
This is because the union membership who agrees to each CBA are acting in their own interest. An immediate bump tends to benefit a significant proportion of current members, but future increases mostly benefit future union members, not the ones that are currently voting.

That's a shortsighted way to look at it, though. A prospect making the minimum is a very good substitute for a veteran making more than the minimum. If prospects are too cheap, fringe veterans are going to be out of a job, or making the minimum themselves.

I agree with you that it's pointless to talk about the salary structure without talking about the union's preferences, though.
   18. Zach Posted: November 17, 2021 at 04:22 PM (#6053332)
TFA sidesteps the issue of how many NFL players make close to the minimum, so I infer that a lot of NFL players don't make much more. (There is a certain amount of going up and down from lower levels of the roster in the NFL, too.) TFA notes that the NFL has a service-time scale; but most NFL careers are really short and a large percentage of NFL rosters are as anonymous as MLB bullpens.

If the minimum salary got too high, I think you'd see the MLB equivalent of 10 day contracts, two-way contracts, or per-game contracts, which aren't that much more generous to the players.

   19. RoyalsRetro (AG#1F) Posted: November 17, 2021 at 04:29 PM (#6053335)
If the minimum salary got too high, I think you'd see the MLB equivalent of 10 day contracts, two-way contracts, or per-game contracts, which aren't that much more generous to the players.


Maybe, but the union would have to sign off on that, presumably for some trade off.
   20. Ron J Posted: November 17, 2021 at 08:56 PM (#6053378)
#19 Doubt it. There's nothing in the CBA that truly requires guaranteed contracts -- at least there wasn't last time I checked.

The real constraint on those types of contracts are options and service time rights.
   21. RoyalsRetro (AG#1F) Posted: November 17, 2021 at 09:30 PM (#6053382)
So MLB teams are guaranteeing contracts out of the goodness of their heart? That doesn't seem likely.
   22. Ron J Posted: November 17, 2021 at 10:51 PM (#6053388)
#21 I'm (mostly) wrong. Here's the current contract language.

Guaranteed Contract

Definition

Players who obtain Major League contracts -- either via free agency or extensions -- are guaranteed the full amount of money promised by those contracts. Conversely, players signed to Minor League contracts must earn a spot on the roster in Spring Training or via an in-season promotion in order to have their contracts guaranteed. Arbitration contracts are not guaranteed either, as a club can release a player on or before the 16th day of Spring Training and be responsible for only 30 days worth of pay. Players cut between the 17th and the final day of Spring Training must be compensated for 45 days worth of pay (at the prorated version of their arbitration salary). But if a player that agreed to an arbitration salary breaks camp with the club, his contract is fully guaranteed.
   23. Barry`s_Lazy_Boy Posted: November 18, 2021 at 10:58 AM (#6053411)
Who are more valuable IMO than a special teams NFL player or the 12th man on an NBA team.

Agreed. Relievers are akin to a guy who takes 5 snaps at QB every third game. Hugely important.

   24. BDC Posted: November 18, 2021 at 12:49 PM (#6053432)
Relievers are akin to a guy who takes 5 snaps at QB every third game. Hugely important

That's on the knife edge between serious agreement & sarcasm; it's hard to tell :)

I think the situation a bit of both. A bullpen is a bunch of QBs who collectively take 30 snaps every game, and they're clearly vital. But they've become assembly-lined into interchangeable laborers and each one can be paid quite minimally.
   25. DL from MN Posted: November 18, 2021 at 04:22 PM (#6053470)
It's a fair analogy, especially if the relief QB was taking the snaps during the 2 minute drill.
   26. cookiedabookie Posted: November 19, 2021 at 12:37 PM (#6053566)
I've said it before, but I'll say it again. Get rid of arbitration, have minimum salaries for each season. Teams can non-tender players who they don't want to pay the salary to. Something like:

Year 1: $1 million salary, $500k guaranteed if on the 40 man roster, another $500k prorated to days on MLB roster
Year 2: $2 million salary
Year 3: $4 million salary
Year 4: $8 million salary
Year 5: $16 million salary
Year 6: $32 million salary
Year 7: Free agency

If a player is released, they can sign any FA deal. But if they sign a one year deal and they've played 1-5 years, a team can keep them the following year for whatever set salary they would have based on years in the league.
   27. Darren Posted: November 19, 2021 at 05:21 PM (#6053609)
I would have never guessed that the NHL had a higher minimum than baseball. Also, seeing the number of players in each league making the minimum is eye-opening. Seems like with that many guys making the minimum, the union would place an increase in the minimum at or near the top of their list.

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