Congress Exempts Baseball from Minimum Wage Law
Congress has just passed an emergency $1.3 trillion spending bill designed to keep the government open through the end of September. The bill is now on President Donald Trump’s desk, where it faces a threatened presidential veto because, among other things, it does not include additional funding for The Wall.
If you are a baseball fan, the most important item in the omnibus bill might be the one that exempts professional baseball teams from new higher minimum wage laws. Through the Civil War, two world wars, the strife of the 1960s, a steroid scandal, and even the rigging of the 1918 World Series, the sport has not only survived but continues to thrive…but increased minimum wage rules could force many minor league teams out of business.
What Minor League Players Really Make
For the vast majority of fans, laws that ensure that baseball players make minimum wage is akin to worrying about paying an extra cent for a new car. With players like Mike Trout making over $34 million this season and an average player salary of over $4 million, discussing minimum wage sounds ridiculous.
This not the case in the minors. Some blue chip prospects sign lucrative contracts that pay them millions of dollars even while they play at the lowest levels of the sport, but that is not the case for the vast majority of players. For example, Royce Lewis was the No. 1 pick by the Minnesota Twins in 2017, and received a $6.725 million dollar bonus just for signing with the team. He finished the 2017 season with the team’s Mid-A club in Cedar Rapids.
While Royce Lewis is paid like a Rolls Royce owner, most players in the minors make little more than a car payment. In 2014, Alex Muren, a 12th round draft pick in 2012, was taking home $660 per month after taxes and insurance while playing for the Cedar Rapid Kernels, according to a story by Jeff Johnson of The Gazette. Muren was in his third season as a pitcher with the organization at the time the article was published
While he played for the Cedar Rapid Kernels, Muren’s contract was not signed with Cedar Rapids. He signed a contract with the Minnesota Twins, which actually pays his salary, one of the major perks that comes with owning a major league affiliated minor league team – you don’t incur the costs of players or coaches salaries.
MLB Lobbying Congress
The sad fact is that Muren’s story is not an isolated one. Most players below the AAA level earn no more than about $1100 per month which, in a 40 hour work week, would be $6.86 an hour. In comparison, according to the National Conference of State Legislatures website, only two states, Wyoming and Georgia, have minimum wage standards lower than this amount, with both coming in at $5.15 per hour.
Over the last decade, the MLB Players Association has fought to ensure that players have the opportunity to earn at least minimum wage. This has been opposed by MLB owners, who have spent more than $1 million over the last two years to lobby Congress to protect teams from minimum wage standards. This might be one of those rare occasions where the union is wrong and the owners are right. The Players Association doesn’t even represent minor league players.
Those efforts appear to have paid off for the Owners Association. The Save America’s Pastime Act is embedded in the the new $1.3 trillion budget measure, exempting baseball teams from having to pay minimum wage to players.
This is seen as a big victory for baseball team owners who maintain that that paying higher wages would reduce the number of positions that are available for minor league players, crushing the dreams of those who envision themselves making it onto a Major League roster one day.
The big league owners’ arguments are somewhat questionable on the surface, at least. Currently, there are over 4,500 players that play minor league baseball. If teams were subject to paying this standard, it would cost a total of $8.1 million per season in additional salary to compensate players according to the minimum wage. Just as a reference, in 2017 the Los Angeles Angels paid first baseman Luis Valbuena $8.3 million to hit .199 in 117 games.
Independent Leagues Complicate the Situation
According to Forbes Magazine, Major League Baseball set an all-time high combined net value of $35 billion last season. When put in that perspective, $8.1 million seems like a ridiculous amount to be haggling over. However, there is one part of the sport that complicates the matter greatly, and that is independent baseball.
Independent leagues have been around since 1993. What separates them from other minor league teams is that they have no direct affiliation with any major or minor league team. The independent leagues have helped some players achieve their dreams of playing in the “big” leagues or returning to the Major Leagues after being sent down to the minors for further seasoning. Those are the exceptions. For most of the players in the independent leagues, their leagues are their only opportunity to simply stay in the game while hoping their contract will be purchased by an affiliated club.
Most independent leagues have some form of salary cap, which ensures that owners are able to control the pay scale while also remaining competitive within the league. Make no mistake, this is not an attempt by owners to reap as much profit as they can. In fact, a large number of owners in these leagues actually lose money every season. They aren’t in the game to make money. They are in the game simply because they love the sport themselves. Salary caps are their way of controlling the amount they lose.
In the American Association, as an example, a salary cap of $115,000 is set for each of the 12 teams in the league. Players earn somewhere between $800-$4000 per month. At the low end of the scale, a player would be far below the minimum wage standard, which has put independent baseball’s most popular franchise, the St. Paul Saints, at odds with a new Minnesota statute that sets the minimum wage at $9.65.
Because of the salary rules, the team is unable to pay its players minimum wage. Because of the state’s new guideline, they may be forced to do so, which might lead to the team folding altogether. St. Paul Saints Executive Vice President and General Manager Derek Sharrer has spoken with state representatives about granting the team an exemption but, should that fail, the team may have no other option than to close their doors.
The Saints have become the thing to do in St. Paul. Since moving into their brand-new ballpark in 2015, CHS Field, the team has averaged better than 8,000 fans per game in a stadium that seats 7,200. On many nights, they have outpaced the Minnesota Twins, the MLB team that is just 12 miles from where they play. The loss of this team would be devastating to the community as a whole.
A Chance at Fulfilling a Dream vs. a Livelihood
While many still consider baseball just a game, the reality is that the sport is one of the most lucrative businesses in the country. In 2016, the Los Angeles Dodgers earned $200 million from their local TV contract alone. This did not include their share of the advertising revenue from the national TV contract, ticket sales, jerseys and equipment sales. Baseball isn’t just a sport. It is also big business.
The reality is that minor league players could easily be paid more by MLB owners. That is not the case for independent league teams. How do you weigh imposing higher minimum wages on teams that cannot pay them against the dreams of the players trying to make it to the big leagues? What does it say about us, to sacrifice player’s dreams to political correctness.
To force these leagues to pay higher minimum wages would force most of them out of business. Worse than that, killing off some of those independent league teams could force entire leagues to shut down. That may seem like a small price to pay in the overall scheme of things but, for players like Kevin Millar, Max Scherzer, and David Peralta, players who have starred or currently star in the Majors, their careers would have ended had it not been for independent baseball.
It may seem unfair to pay baseball players less than the crew members at McDonald’s, but McDonald’s employees will never earn a shot at a multi-million dollar career by honing their burger flipping skills. Baseball players have that opportunity. Like everyone else in the entertainment industry, the players themselves realize that they are paying their dues in exchange for the chance at a very well-paid career. If they are willing to make that trade off, why shouldn’t they be allowed to make that choice?
This is one of those rare occasions where Congress might have actually gotten something right. While it might look like Congress stepping in to protect major league baseball from higher wages, the bill also protects a sliver of the American dream. It is also an almost unique occasion in which some workers don’t want a higher minimum wage forced on them at the cost of losing their dreams forever. Lower wages versus a long-shot chance at immortality. That’s the deal that Congress is offering baseball…and that’s the deal that the players in the independent leagues accept every time they suit up and run out onto that field of dreams.
Featured Image by Ed Bailey