Written by Raj Ashar
In 2019, the revenue of Major League Baseball (MLB) was 10.7 billion U.S. dollars (Brown). The minimum salary for a player that year was $555,000 (Velayos), a figure that comfortably places one in the top 5% of the United States income distribution (Kagan). Contrast this to Minor League Baseball, the steppingstone to make it to major league baseball. In minor league baseball, there generally exist three levels: Single-A, Double-A, and Triple-A with Triple-A being the highest. The 2021 minimum salary for Single-A players was $10,500. For Double-A it was $12,600, and a whopping $14,700 for Triple-A players, who are on the cusp of playing in the majors. Even more shocking is that these salaries are after the MLB increased player salaries between 38 and 72 percent for the 2021 season (Fagan). For 2021, the federal poverty line for a single individual is $12,880 (Smith). Assuming the minor league players earn no outside income and live alone, many Single and Double A players would be under the poverty line, and Triple-A players would not be far from it. At the beginning of Bull Durham, heralded by many as “the movie” about Minor League Baseball, Annie Savoy says, “The only church that truly feeds the soul, day in and day out, is the church of baseball” (Bull Durham). However, for many minor league players, simply playing the game of baseball barely offers them enough money to feed themselves, much less their souls.
For players, the dream of advancing from the minor leagues to the majors is extremely difficult to realize. Only 10 percent of minor league players make it to the major leagues and can earn a lucrative salary (Gordon). The rest are forced to choose between giving up baseball or finding a way to survive with their meager salaries. So, why do they do it? Upon analysis, it strikes me that the economic structure of minor league baseball is similar to that of a gang. In 2000, researchers Steven Levitt and Sudhir Venkatesh co-authored a paper titled “An Economic Analysis of a Drug-Selling Gang’s Finances.” In the paper, the authors analyze the economic motivations for individuals who join gangs. They compare the wages of various gang members to the wages that they could earn in legal employment. Interestingly, they find that at the lowest levels, gang members earn less than what they could earn outside working legally. The average entry-level foot-soldier wage is $2.50/hour, far less than the minimum wage job one could earn with a minimum level of education. If that’s true, then why would anyone join a gang?
For the answer, look to the top. According to Venkatesh and Levitt, “the gang leader retains between $4,200 and $10,900 a month as profit, for an annual wage of $50,000-130,000. This value is well above what leaders could hope to earn in the legitimate sector given their education and work experience” (Levitt and Venkatesh 770). They find that entering a gang is like playing the lottery. If one enters enter, they run the risk of consistently earning low wages, being killed, or being arrested. However, climb the ranks and reach the top of the gang, and they have a chance to earn more than you could have dreamed of.
Unfortunately, baseball is similar. By signing a minor league baseball contract, prospective players take an immense risk. There’s a 90% chance that they earn a meager salary with limited exit opportunities. But there’s a slim chance, just as in a gang, that a player makes it to the top, and earns a substantial amount of money.
However, it doesn’t have to be this way. Unlike the gang situation, Major League Baseball rakes in billions of dollars a year and can afford to pay minor league players more money; they even have in the past, when the sport was generating far less revenue. In a tweet, economist J.C. Bradbury pulled minor league baseball salaries from 1950 and converted them to annual salaries in 2017 dollars. The result: Triple-A players earned $43,170, Double-A earned $30,470, and Single-A earned $17,775 (Bradbury). With the advent of social media, widespread television, and online shopping, it’s ludicrous to say that MLB was more profitable in 1950 compared to today. Without a doubt, MLB should be able to pay their players far more than they currently are.
Even compared to other major sports leagues, MLB pays their minor league affiliates less. For example, the G-League, the National Basketball Association’s development league, pays a minimum of $35,000. The American Hockey League, a developmental league for the National Hockey League, pays players a minimum of $52,000 (Fagan).
In their defense, MLB has taken steps in the right direction to remedy the dire situation for many minor league players. Along with this year’s pay jump, MLB recently required that teams pay for housing for its minor league players (Cooper). Yet, there’s more that can be done. Salaries should be nowhere close to the poverty line, as these athletes dedicate their lives to these sports and are among some of the absolute best. Additionally, programs should be established to serve as an off-ramp from baseball. With many minor leaguers forgoing a college education for baseball, efforts should be made for these players to have a backup plan after their careers. Taking measures like these will allow baseball to act less like a gang, and more like “The only church that truly feeds the soul.”
References
Brown, Maury. “MLB Sees Record $10.7 Billion In Revenues For 2019.” Forbes, 21 Dec. 2019, https://www.forbes.com/sites/maurybrown/2019/12/21/mlb-sees-record-107-billion-in-revenues-for-2019/?sh=24a82ac95d78.
Cooper, J. J. “MLB Will Require Teams To Cover Housing Costs For Minor Leaguers In 2022.” Baseball America, 18 Oct. 2021, https://www.baseballamerica.com/stories/mlb-will-require-teams-to-cover-housing-costs-for-minor-leaguers-in-2022/#:~:text=Major%20League%20Baseball%20will%20cover,a%20statement%20released%20by%20MLB.
Fagan, Ryan. “Even after Overdue Salary Bump, Baseball’s Minor Leaguers Still Paid Far below NBA, NHL Counterparts.” Sporting News, 12 Feb. 2021, https://www.sportingnews.com/us/mlb/news/even-after-overdue-salary-bump-baseballs-minor-leaguers-still-paid-far-below-nba-nhl-counterparts/1gpql94asy7a10uo5nvc3yp4k.
Gordon, Ian. “Minor League Baseball Players Make Poverty-Level Wages.” Mother Jones, https://www.motherjones.com/politics/2014/06/baseball-broshuis-minor-league-wage-income/.
@jc_bradbury. “Simon Rottenberg’s 1956 paper reports median minor-league salaries in 1950 by level. I’ve converted them to annual salaries in 2017 dollars, presented next to the current MiLB salary scale. http://jstor.org/stable/1825886” Twitter, 22 March 2018, 9:52 a.m., https://twitter.com/jc_bradbury/status/976818975966420992?lang=en
Kagan, Julia. “How Much Income Puts You in the Top 1%, 5%, 10%?” Investopedia, https://www.investopedia.com/personal-finance/how-much-income-puts-you-top-1-5-10/.
Levitt, Steven, and Sudhir Venkatesh. “An Economic Analysis of a Drug-Selling Gang’s Finances.” The Quarterly Journal of Economics, Aug. 2000, pp. 755–89, https://pricetheory.uchicago.edu/levitt/Papers/LevittVenkateshAnEconomicAnalysis2000.pdf.
Shelton, Ron. Bull Durham. Orion Pictures, 1988.
Smith, Gabrielle. 2021 Federal Poverty Guidelines. https://www.peoplekeep.com/blog/2021-federal-poverty-guidelines.
Velayos, Diana. “Who Is the Lowest-Paid Player in the MLB? Is There a Minimum Salary?” AS, 28 Oct. 2021, https://en.as.com/en/2021/10/27/mlb/1635329409_329055.html.