Racial discrimination in professional sports has always been an issue and committees in professional sports are trying their best to eliminate racial discrimination from both inside and outside of the field. Major League Baseball is one of the professional sports leagues that has a long history about racial discrimination. Relating with this, it is questionable that if racial discrimination affects on players’ salary in MLB. If so, how does racial discrimination affects on the salary and what are the other factors related with racial discrimination that can affect on salary? This question will be discussed and examined throughout the report.
First of all, Major League Baseball is one of the big four leagues in the U.S. and this represents why MLB has a big market share in U.S. sports market. While the specific percentage of share could not be found, there were statistical facts, such as total revenue, television exposure, and audience attendance, show that MLB is ranked as second among big four leagues. Along with the size of league, there are numerous players from all over the world in MLB who are trying to be succeeded as a player with fame and wealth. In these days, most teams are focusing on recruiting prospects rather than signing contracts with free agents. Unlike free agents, prospects can be recruited at cheaper price, if teams divide the rank of prospects. For instance, a prospect with higher rank could sign on a contract at a reasonable down payment with signing bonus while the other prospect with lower rank could sign on a contract at the lower amount. This is where racial discrimination possibly affects on players’ salary because many prospects are recruited from countries in South America and Asia.
In order to look further, it is necessary to look at the studies, which were done in the past, on racial discrimination in MLB. According to Schuler, United States, Canada, and a number of other countries have a strong commitment on providing equal opportunity in all aspects of employment and in the workplace (Schuler 1990). Over the last thirty years, studies shown that the workplaces for minorities have increased. With more opportunities, the market has become more competitive in terms of human capital, which eventually leads the elimination of salary discrimination. Under competitive environment, companies wanted avoid not only possible legal actions, but also losing human capitals to others. In terms of MLB teams, this means that if there are teams which practice discrimination, then they would have to face the result of losing their prospects. According to Becker, he said, “From an economic perspective, increased competition in the labor market will lower employment discrimination in wages” (Becker 1971).
Moreover, in 1975, the reserve clause on players was eliminated from the league. This was essential on eliminating salary discrimination depending on race as well. The reserve clause was a restriction that prevents players to...