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Minimum salary

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The minimum salary is the lowest amount which a club can pay a player for a full season in the major leagues. Its amount is set in the Collective Bargaining Agreement. In the 2002 CBA, the minimum Major League Baseball salary was raised by 50% to $300,000. This figure was 2913% higher than a full-time salary based on the U.S. federal minimum wage, but still a pittance compared to the average MLB salary, which was $2.3 million in 2004. The minimum salary has grown tremendously over the past three decades. It was set at $15,000 per year in the 1973 Collective Bargaining Agreement, and reached $400,000 in 2009. It took another big jump with the conclusion of a new CBA effective in 2012. A minimum salary is also set for the various classes of minor leagues in organized baseball.

Only a minority of players are paid the minimum salary at any time, but most players will be paid at that level at some point of their careers. Almost all players are paid the minimum salary as rookies - the exception are the few very high draft choices or international free agents who are in a position to negociate a higher initial rate of pay. The minimum is also paid to players who have failed to establish themselves for a full year in previous major league stints, or players who have been released by another team and are forced to accept the minimum in order to sign on with another team.

Teams also have to pay the minimum salary to a player who has been released by another team which is still responsible for paying his salary for the remainder of the season. For example, after the season has started, team A releases a player making $1 million for the year; it is responsible for paying that salary (and any future garanteed years). If team B signs the player, it only needs to pay the pro-rated amount of the yearly minimum salary to the player, with team A still responsible the remaining portion.

[edit] Evolution of the minimum salary

Year Minimum Salary Average Salary
1970 $12,000 $29,303
1975 $16,000 $44,676
1980 $30,000 $143,756
1985 $60,000 $371,571
1990 $100,000 $578,930
1995 $109,000 $1,071,029
2000 $200,000 $1,998,034
2002 $300,000
2005 $316,000 $2,632,655
2006 $327,000
2007 $380,000 $2,699,292
2008 $390,000
2009 $400,000 $2,996,106
2011 $414,000
2012 $480,000

[edit] Further Reading

  • Michael Haupert: "Baseball's Major Salary Milestones", The Baseball Research Journal, SABR, Volume 40, Number 2 (Fall 2011), pp. 89-93.
  • Barry Krissoff: "Society and Baseball Face Rising Income Inequality", in The Baseball Research Journal, SABR, Volume 42, Number 1 (Spring 2013), pp. 92-98.

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