Schifman: The rise of MLB’s minimum earners

From Gerald Schifman at Baseball Prospectus on March 14, 2019:

The average major-league salary decreased by $1,436 last season, according to the MLB Players Association’s latest compensation report. As part of the roughly $4 million salary averaged by major leaguers, that drop is trivial. Yet the finding is alarming because of how baseball salaries previously trended. After the last decline took place in 2003-2004, the mean salary grew in every year that followed at a healthy average of 4.5 percent. MLB revenues continue to rise, so last year’s drop isn’t evidence of baseball falling into its own recession. Instead, it reflects teams’ intensifying pursuit of surplus on performances that are under-priced relative to open-market value.

Surplus is usually maximized on players who have yet to reach arbitration and are thus being paid the league minimum, which has held near $500,000 for the past seven seasons. It’s a great salary outside the entertainment realm, but a relative pittance in a nine-figure MLB team payroll. Making minimum earners all the more enticing for front offices is that their small sums aren’t even guaranteed in full. Players only receive a prorated portion for their time spent in the big leagues, and collect far less coin down in the minors.

The dip in average salary and the growing emphasis on value hints at a changing landscape across major-league fields. Is there a rush of minimum-salaried players who are phasing out higher-priced veterans? With data on plate appearances, batters faced, and salaries from Baseball-Reference, we can assess whether the on-field composition of players is changing.

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Originally published: March 14, 2019. Last Updated: March 14, 2019.