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Minor league pay and aligning incentives

The Toronto Blue Jays took a step in improving conditions for minor leaguers that every team has an incentive to follow

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The offseason has been slow. Of course, Major League Baseball offseasons are always slow, but usually they’re just slow after Christmas, not into the opening games of Spring Training. That much downtime without any real Rockies news has left a lot of room open to talk about some of the systemic issues in the game. There have been ongoing debates about rule changes, the state of free agency, and fan engagement—and that’s just here on Purple Row!

One of the topics that has gotten a lot of attention is minor league pay. Last week Emily Waldon of the Athletic published a comprehensive article about the experience of minor leaguers in today’s game. Waldon’s interviews with former or anonymous minor leaguers revealed a system in which players struggle to find adequate housing, meals, and sleep during the season with little to no help from the team, all while making salaries that fall below federal poverty levels. While some players acknowledge some things are getting better, it confirms what many of us knew or at least suspected: Life in the minor leagues ain’t easy.

Then on Sunday the Athletic revealed and later confirmed that the Toronto Blue Jays would be enacting about a 50% raise across the board in minor league player salaries. Blue Jays brass acknowledged that this won’t be life-changing for any one player and won’t solve all of the problems players face in the minors, but for them it’s a start. Before we get into the details of what this means for the players and the balance sheet of the Blue Jays, let’s talk about how we got here.

In general, MLB owners aren’t going to be shamed into paying minor leaguers more. How, then, will change happen? Any parent or economist knows that you accomplish far more by aligning incentives than by piling up penalties. My two-year-old only barely responds to the threat of a time-out, but if I know he wants something and threaten to take it away if he doesn’t behave, he’ll shape up pretty quick. By aligning my desires (in this case, not touching dadda’s computer while he’s working) with his (his preferred mid-morning granola bar), we come to an agreement where we both get what we want.

Unfortunately for the minor leaguers, their counterparts in the majors more or less sold them up the river in the previous round of collective bargaining, preferring to negotiate for the right to an entire row on the team bus than worry about the working conditions for non-union members (also known as “potential future union members”). (That those same veteran players are no longer getting the types of contracts that they took for granted in the old system because teams recognized paying free agents for past performance does not benefit them nearly as much as filling their rosters with younger, more productive players could be interpreted as chickens coming home to roost, but that’s a different article). The players union and owners have said they will begin talks now but it may be three years or more before players in the minors see any affect.

Which brings us back to the question: How does this change? By making teams see that it’s in their best interest to take better care of all the players in their organization. The less players have to worry about things outside the ball field, the better they perform. The better everyone performs, the better prepared your eventual major leaguers are. Obviously teams can’t control everything, but reducing stress over room and board is a tangible thing teams can address. And if you can pay them better, who knows: maybe that guy who dropped out of baseball after a good-not-great season in Low-A gets extra time to develop and becomes a major leaguer.

Russell Carelton (formerly of Baseball Prospectus, now working for the Mets front office) has been beating this drum for years. In fact he's gone a long way towards quantifying the effect, which is to say we’re not talking about “good vibes” here, but something that has an actual effect on players and the organizations for whom they play.

More teams are seeing the advantages of at least better nutrition for players, but the Blue Jays decided the time was right to take it one step further. Don’t be fooled by the quotes about “the right thing to do;” while they may earnestly believe that they also surely saw the mutual advantage to raising minor league salaries, especially when they saw how much it could outweigh the cost.

According to Waldon’s article last week, here’s the minimum players make, by level:

Triple A: $2,150 monthly/$11,825-$14,850 per season.

Double-A: $1,700/$9,350+

Single-A: $1,160-1,500/$6,380-8,400

It was initially reported the Jays would be raising salaries 50% across the board but it was later clarified that it would be a 40% increase for Triple-A players, 50% in Double-A, and 56% in Single-A. Toronto has eight affiliated teams, including two short-season teams and a Dominican Summer League squad. For simplicity sake, let’s assume that the 6-lowest levels average out to A-ball levels of pay. Here’s how the costs add up over the course of a season:

Blue Jays Minor League Pay Scale

Level Old Minimum New Minimum Players/Level New Total Increase
Level Old Minimum New Minimum Players/Level New Total Increase
Triple-A $10,750 $15,250 25 $381,250 $112,500
Double-A $8,500 $12,750 25 $318,750 $106,250
Single-A $5,800 $12,000 150 $1,800,000 $930,000
-- --
TOTAL 200 $2,500,000 $1,148,750

That represents a 54% increase in minimum minor league pay, and does not include the requisite pay bumps players receive for experience at any given level. That increase of $1,148,750 is just a whisper over the equivalent of two additional major league minimum salaries. It also fits well within the “seven-figure budget line” the Jays spend on their minor league operations.

Now a lot of people will look at that and say “That’s a rounding error!” But in every good business every dollar is meticulously accounted for. And while owners are all almost certainly making at least some measure of profit from the $10.3 billion revenues MLB took in last year regardless of revenue sharing status, there are a lot of costs that go into running a baseball team beyond player salaries. All that’s to say, it would take some innovation or budgeting to allocate that money, but wouldn’t be overly burdensome.

That’s trivial in execution and far outweighed by the good PR, the positive player response, and even slight advantage in the minor league free agent market. At a 54% overall increase, each player is already better taken care of, and yet the rewards are still in place for them to keep pushing to get better and get to The Show to get the real payday. And the pay isn’t so high so that players who would be better served as talented doctors, lawyers, businessmen, et al don’t just keep grinding through the low minors because of inertia. And the Jays could see enough benefits to players and the organization that a year or two down the line they say, “Actually, we can make another raise work.”

It’s telling that this change was enacted by the Blue Jays, who are led by four current or former farm directors in president and CEO Mark Shapiro, vice president of baseball operations Ben Cherington, general manager Ross Atkins, and farm director Gil Kim. These four “baseball lifers” have extensive experience working closely with minor leaguers, so they all know what it’s like. After working to better resource minor leaguers as a supplement to the low salaries over the past few years, they’ve now taken the step to improve the salaries themselves.

Seeing the actual numbers, I’m convinced even teams on the bottom end of the revenue pile could make it work and those at the top end have no excuse to not follow the Jays lead. And if we want to talk about aligning incentives for the owners, remember that several hundred current minor leaguers will be union members soon, and it’s much easier to negotiate with a happy counterpart than an embittered one.