Don Worthington

May 4, 2014

SC study: Race not a factor in baseball’s pay

A study by a team of Winthrop and University of South Carolina economists shows that baseball owners pay for performance and that race is no longer a factor when it comes to salaries.

A study by a team of Winthrop and University of South Carolina economists shows that baseball owners pay for performance and that race is no longer a factor when it comes to salaries.

“Baseball has done a great job of eliminating discrimination,” says Lou Pantuosco, a labor economist at Winthrop.

The soon-to-be-published study follows recent controversy over racist remarks attributed to Los Angeles Clippers owner Donald Sterling and the swift reaction by NBA Commissioner Adam Silver, who banned Sterling from the game and began efforts to force Sterling to sell the Clippers.

The team of Pantuosco, Gary Stone of Winthrop and Joseph Van Nesson of USC studied baseball statistics and salary data from the 1960s forward to see if race was a factor in players’ pay.

As economists they were drawn to the numbers. They also knew the theory that all economies should eventually converge in terms of per capita income over time and that discrimination, from an economic viewpoint, is inefficient and affects productivity. They wanted to see if baseball salaries were converging and, if so, how fast.

They are also passionate baseball fans.

Pantuosco is a longtime follower of the Boston Red Sox. Stone and Van Nesson root for the Atlanta Braves. Stone’s office at Winthrop is a shrine to the game with every sort of baseball memorabilia possible. The conversation in his office is as likely to be about Yankee greats Mickey Mantle and Roger Maris – whom he saw play as a child – as it is about economics.

Their analysis showed that the salaries of white and minority players have almost converged and that the best performing players are paid the highest salaries.

They also discovered that some of the pioneering minority players who integrated the game were among the best paid players. Curt Flood’s suit in 1973 that led to free agency also was key to pay and performance parity, they found.

Van Nesson said baseball is the perfect game for such an economic study as there is a wealth of information to use for analysis. “This shows the power of the market: Merit is what is shining,” Van Nesson said.

Since 1919 the Elias Sports Bureau has recorded every hit, run, error, strikeout, walk and wild pitch – plus many more statistics – for every team and player in the major leagues. Elias’s Book of Records is an essential source for any baseball fan.

Since 1985 the Major League Baseball Players Association has released salary data. Historic data has also been assembled by organizations such as Society of American Baseball Research. According to the society, the game’s best players in 1874 earned about $2,800 when the average wage was less than $600.

Babe Ruth made $80,000 in 1930, $5,000 more than President Herbert Hoover, prompting the Babe to remark, “I had a better year.”

Baseball’s first million-dollar player was pitcher Nolan Ryan in 1980, and Alex Rodriquez of the New York Yankees was the highest paid in 2013 at $29 million. The league’s average salary in 2013 was $3.38 million. The lowest paid pro baseball player got $480,000 for the 2013 season.

While the economists used the players association data for more recent players, the treasure trove of information came from Stone. His doctoral dissertation at the University of North Carolina was on baseball salaries.

He assembled the data by using a book for people seeking players’ autographs. He wrote to current and former players asking them for their minor and major-league salaries. The response rate was high enough for Stone to make his necessary analysis.

The data sat unused for several years until Stone and Pantuosco talked baseball. The data became the basis for several articles published in economic journals looking at things such as salaries of modern and all-time all-stars, and salaries compared to those who allegedly used performance enhancing drugs.

“We have the best data set and we stick with the facts,” Pantuosco said.

Pantuosco said those baseball papers were published in academic economic journals. Their recent efforts on baseball, race and compensation, however, may be marketed to a broader audience. “Maybe,” Pantuosco said, “we’ll sent this one to ESPN.”

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