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April 15, 2010

Ahead in the Count

Labor Market Discrimination

by Matt Swartz

Jeff Passan reported Tuesday on Yahoo! Sports that Orlando Hudson suspects that Jermaine Dye has not gotten a major-league contract to his liking for sinister reasons. Specifically, Hudson claims:

You see guys like Jermaine Dye without a job. Guy with [27 home runs and 81 RBI] and can’t get a job. Pretty much sums it up right there, no? You’ve got some guys who miss a year who can come back and get $5 million, $6 million, and a guy like Jermaine Dye can’t get a job. A guy like Gary Sheffield, a first-ballot Hall of Famer, can’t get a job…We both know what it is. You’ll get it right. You’ll figure it out. I’m not gonna say it because then I’ll be in [trouble].

The fact is that African-Americans earn less than Caucasians in the United States of America in 2010.  Blacks earn less than whites who have the same education and experience, work in the same areas, and work in the same sectors.  This is a uniform result in basically all economic research on the topic.  This wage gap is real, and its impact is large.  It is not something that economists or any other individuals should take lightly, but its causes are less than clear.

There are different kinds of discrimination, and it is important to separate prejudice from discrimination. This is not to belittle discrimination, but to define the difference so that we can talk about this topic seriously.  Prejudice is an adverse opinion without reason or logic. Discrimination is treating two groups differently. There does not need to be prejudice for there to be discrimination. Most economists believe that the basis for the wage differential between blacks and whites is not based on prejudice as much as discrimination. The reason is simple.  Suppose that car dealerships were all run by white racists who wanted only whites to sell their vehicles. Now say there were plenty of qualified black salespeople who were not paid the same amount of money as whites to do the same job, but who were equally capable. This type of situation is difficult to sustain, because all you need is one greedy person to realize that if he builds a car dealership and offers low enough wages that only blacks will accept, he make a ton of money selling cars without paying much in the form of sales commissions and, thus, run the racist dealers out of business. He doesn’t need to be a holy man or even a nice guy. He doesn’t even need to like blacks. He just needs to like money more than he dislikes blacks, and the competition would drop like flies. The free market can free us from these kinds of racists.

There is another more dangerous type of prejudice than employer prejudice, however. That is customer prejudice. When customers are prejudiced, that can create a much larger wage gap. Car dealers could all be enlightened individuals who see beyond race, but if they want to sell cars and car buyers are racists, a problem is created that economic market forces won’t solve. Of course, that is where legal remedies enter. However, proving discrimination is far from easy as evidenced by blacks being paid less than whites for similar work.

There is a third type of discrimination, one without prejudice. That is statistical discrimination. It is also difficult to fight, because the enemy is subtle. If certain traits are seen as more common in one race and are believed to affect productivity, they can be applied reductively, lumping everyone together because race can be used as a proxy for other variables. The human being is prone to categorize, and this is where we get into trouble. This is also difficult to combat, but remains horribly unfair. A major example of this is the wage differential women deal with, whereby women earn less than men doing equivalent work. Some of this, at least, is due to the fact that women leave the labor force more often than men when they have children. Knowing this, firms adjust their investments in long-term employees, favoring those who they believe are more likely to stay. Again, this is illegal, but proving it in court is difficult, suggesting why this type of wage differential persists. Otherwise, women would earn salaries on par with their male counterparts more often.

Taking all this to baseball, we have to consider which of these conditions are the most appropriate to describe the sport's labor market. One of the most unique things about baseball from an economist’s standpoint is that labor productivity is very measurable, far more than in nearly any other industry. This is why many economists believe that baseball is a perfect natural laboratory to study these kinds of things.

For example, take the major leagues before Jackie Robinson broke the color barrier. I mentioned the example of the more-greedy-than-racist car dealer earlier, and how simple employer discrimination can be remedied by market forces. All we needed was somebody to come in and open a new firm and…

That’s where the problem lay. You can’t just build a new baseball team and put them up against the Red Sox, can you? There were actually people trying to build baseball teams of great black players, many of whom were superior to their white counterparts, but were forced to play in the Negro Leagues because the major leagues banned them. Without the market force of free entry, there is a coordination that can take place between owners. Fortunately, Branch Rickey did his part to correct this, and signed Robinson for the difficult task of breaking the color barrier.

This is where Robinson had to face a new kind of problem mentioned earlier, which is customer discrimination. Angry white racists were not happy to see Robinson in the National League. As a result, bringing in Robinson cost owners a chance to make money from those fans who boycotted attending games as a result of his signing. Even if adding Robinson to the roster also added to their win column, it was a risk for their bottom line, but the Dodgers were willing to take it. This is where Robinson’s role was so crucial: because both Rickey and Robinson were aware that people would stereotype “black ballplayers” based on the small sample size of one, it was essential that Robinson show the strength not to respond, to just play. He ignored critics and refused to fight.  Racists fans, umpires, opposing players—he had to rise above all of it, and he did just that, something few people in the world could have done. This combated customer discrimination that could have kept blacks out of baseball longer. Remember that Robinson debuted in 1947, 17 years before the Civil Rights Act was passed.

Part of the beauty of baseball, as I mentioned earlier, is that productivity is far more measurable than in other labor markets. It was easy to see Robinson him win the batting title in 1949 with a .342 average, and to count his 37 stolen bases that year. That was his production, and it was easily isolated and valued.  It made it much harder to discriminate against him in baseball as it might in other industries.

The question is whether there is customer discrimination against Dye, because employer discrimination just is not going to cut it as an explanation. It is pretty clear that it would be next to impossible to coordinate an effort on the part of all 30 teams to consciously discriminate against black players, especially with some many teams looking for a competitive edge. However, if customers prefer white players to black players enough that it hurts the owners at the gate, then that would be another story. Fortunately, baseball profit is driven heavily by making the playoffs. As the playoffs expanded after the 1993 season to allow for more home post-seasons games, the value of advancing to the postseason grew even larger. Any racism among fans would have a hard time outweighing the flush of cash that would come with a playoff appearance. However, it does not need to outweigh this effect.  It just needs to have an effect to change salaries in an unfair way.

The other possibility is statistical discrimination, as mentioned earlier. If being black is perceived to be correlated with other traits that affect productivity, then it risks being used a proxy for those traits if they are difficult to measure. This is where the Sheffield allusion by Hudson is particularly interesting. It seems as if the media perception of Sheffield is that he is a bad guy. Right or wrong, that is the common attitude towards him. Sky Andrecheck has studied the extent that teams do pay attention to perceived clubhouse effects, and treat them as though they affect value by about 1.5 wins at the extremes. If black players are more likely to be identified with this negative clubhouse effect than white players, even if it is perceived rather than real, that is where African-Americans could be getting treated unfairly in baseball’s labor market.

At this point, most studies have shown little evidence of discrimination. J.C. Bradbury highlighted a number of these on his website yesterday. Of course, there could be a lot of information missing that leads to a false negative in these tests. For instance, if race is correlated with position and certain models overvalue or undervalue the contribution at that position, there could be a lot of error that creeps into that analysis.

That is why the question should be a theoretical one as well as an empirical one: both approaches remain important.

To me, the real question comes down to whether black players’ clubhouse effects are treated differently than those of white players. If Brett Myers gets a mulligan for domestic violence, while Elijah Dukes does not, that is where racism could enter into the equation. Clubhouse effects are the murky area of baseball where productivity is harder to measure, and it becomes more plausible that general managers might not notice their subconscious biases. If black players are underpaid relative to their contribution, I doubt that such a tendency would be true across the board because of all the reasons listed above, but it is certainly plausible that white malcontents and black malcontents are treated differently.

Consider the July 2009 Forbes’ article listing the “The 10 Most Disliked People in Sports”, in which the top eight were not white. Looking through the list, it’s not really all that surprising, but that’s not the point. I don’t really see any problem with people taking issue with Michael Vick, but my question is whether there are white people getting away with bad behavior who are not disliked in the same way. That would not only be related to statistical discrimination but to customer discrimination, black malcontents could be forced to take lower salaries if fans disliked them in advance while white malcontents could get salaries commensurate with their on-field production.

As far as Dye is concerned, he is not a player with a reported track record of “poisoning clubhouses,” and so in his case, I have a hard time believing that racism is playing a role. In his case, I suspect that the fact that UZR reports his fielding has been 61 runs below average over the last three years, while the Baseball Info Solutions’ Defensive Runs Saved for Dye in that time frame is negative 46 runs is working against him.  Dye is best employed as a designated hitter at this stage of his career, and with PECOTA projecting a .262 TAv for 2010, it is likely he not getting contract offers to his liking because he is essentially not far above replacement level.

However, the question Hudson raised does not need to be limited to looking at one ballplayer, and it is an important one. Looking at baseball can teach us all kinds of things about economics because productivity is so well documented. The wage differential could be yet another economic lesson learned from the sport.

Matt Swartz is an author of Baseball Prospectus. 
Click here to see Matt's other articles. You can contact Matt by clicking here

46 comments have been left for this article. (Click to hide comments)

BP Comment Quick Links

Richie

Good, well-reasoned, very well-researched article. Thanks Matt.

Of course, if you had been more histrionic and off-the-cuff, you'd be getting alot more 'comments'. Customer discrimination, if you will.

Apr 15, 2010 09:09 AM
rating: 6
 
krissbeth

Good article. I suspected it was the glove that was the issue, although I bet the wheels play a role too.

With just DH, Dye's got a tiny market: Orioles (rather than sign Atkins, have Dye DH with Wigginton and/or Scott at 1b), White Sox (their platoon DHs are a bad idea), As (rather than Sunk Cost Chavez), Mariners (platoon or better with Griffey), and the Rays (and dump Burrell). The latter three teams have emotional or economic reasons not to sign Dye. The White Sox cut bait with him in the first place, so, really, we're talking about the Orioles' free agent signing acing out Dye.

Apr 15, 2010 09:37 AM
rating: 1
 
ClubberLang

I wouldn't be surprised if Andruw Jones produces approximately what Dye did last year if he gets the playing time, but at a vastly lower price. The problem isn't that Dye can't play, it's that he won't sign for what teams are willing to pay him. Not to mention Jones can still play the field at a level better than "one of the 5 worst fielders at any position in all of baseball", which is where Dye is. Given Quentin's propensity to get hurt, a backup plan for right field or the ability to give him some DH breaks has real value for the Sox.

Apr 15, 2010 16:47 PM
rating: 2
 
wpitcher3

Great article Matt! Thank you for tackling a difficult and sensitive subject in a thoughtful and insightful manner.

I thought the Forbes list was interesting because many of the disliked individuals are current (Kobe, A-Rod) or former (Manny, T. O., Iverson, Isiah, McEnroe) stars. I guess if you suck and aren't perceived to be a nice person you don't get to stick around long enough to make that sort of list!

Apr 15, 2010 10:40 AM
rating: 1
 
ScottyB

Excellent article, yet again!!!

Apr 15, 2010 10:42 AM
rating: 0
 
ferret

I recall B Myers as having a single incident of domestic violence and Dukes has had multiple offenses. Please correct me if I am wrong.

Apr 15, 2010 10:53 AM
rating: 2
 
cjrhgarmon

It was only one public incident. There may have been others not reported. And it was a doozy by any measure: punching your wife in the face and dragging her by the hair in public. At the very least, baseball should have lengthy suspensions for reprehensible behavior like that.

Apr 15, 2010 11:27 AM
rating: 5
 
swarmee

Dukes also called her with death threats, and IIRC sent her a picture of the gun he was going to shoot her with.

Apr 15, 2010 13:18 PM
rating: 0
 
BP staff member Matt Swartz
BP staff

Correct, Dukes is seemingly a terrible person and there is no issue with that affecting his actual and perceived value. I mentioned Myers as someone who has a domestic violence precedent, and who has at least showed up with a black eye one other time about which his story changed. Who knows why, but Myers is a questionable player but he's worth about one win and is compensated as such. Dukes is probably worth about one win and is not. There are plenty of players who get a mulligan, but I suspect that it might be correlated with race.

Apr 15, 2010 18:26 PM
 
CRP13

There's always the chance that maybe Dukes is just a jerk. It doesn't necessarily have to do with Myers at all. Pretty well documented that Bradley, Sheffield, Bonds - all jerks. Also well documented that Kent, Pierzynski are also jerks (white). Difference being that there is a surplus of good outfielders who aren't jerks, and the number of 2B/C's that hit for average and power is less than the number of spots actually available. Same with SP's. A little more can be put up with in a pitcher, given that filling your roster with good ones is much more difficult than filling an outfield.

There's got to be at least one white outfielder in recent history who "jerked" his way out of baseball, but I'm not sure we're going to hear about it in the media because it's not a good conversation starter.

Apr 16, 2010 07:41 AM
rating: 0
 
ferret

Forgot to add that Milton Bradley is still playing and has had several violence related issues. I think discrimination exists but it may be more related to non quantifiable performance issues ("good citizenship"?) than skin color.

Apr 15, 2010 10:58 AM
rating: -1
 
BP staff member Matt Swartz
BP staff

Milton Bradley is very uniquely talented, and even if his value is affected by off-the-field issues, he still would get quite a contract. Regardless, he was traded for no real value this past offseason because of off-the-field issues primarily, so the last record of his value is low.

Apr 15, 2010 18:28 PM
 
Richard Bergstrom

Carl Everett also had a long career with all the crazy at best and hateful at worst things he said.

Also consider cases of African-American players who used drugs. If owners were racist, would players like Dwight Gooden and Darryl Strawberry gotten the multiple chances they did? Wouldn't drug use be a convenient excuse for a racist owner to release a player? Nope, seems talent primarily dictates who stays in the league and who stays home.

That being said, keep in mind that the owners have been in trouble for collusion before. In that case, it was against free agents, but if owners in general were racist/prejudiced/biased, I imagine there would be stronger evidence.

Now, it might be possible that owners/managers find it harder and/or more expensive to sign African-Americans (or Americans in general, regardless of ethnicity) because they have to bid against other sports like football or basketball or offer incentive for an athlete to skip college. General Managers might prefer to deal with Dominicans, for example, who have athletes where not as many of these factors are in play. That preference in itself might be a form of racism.

Apr 16, 2010 00:16 AM
rating: 1
 
BP staff member Matt Swartz
BP staff

I agree that employer prejudice is a weak claim, which is why I focused on customer discrimination and statistical discrimination as more plausible in the article.

Collusion can occur far more easily though when the set of firms (teams) is fixed in size without free entry. That certainly played a role in pre-Jackie Robinson baseball segregation. It's just that implicit collusion is harder to pull off from a baseline of integration.

Certainly Americans can be harder to sign because of other obligations, but they are also subject to a draft which holds their available bidders down. That last argument might not be strong enough, especially because the discussion is focused on offers to existing African American players in general, rather than teenaged two-sport athletes.

Apr 16, 2010 07:15 AM
 
Richard Bergstrom

Regarding teenaged two-sport athletes, I do think there is a different dynamic in play. An elite high school baseball/basketball player has a higher chance of signing a professional basketball contract than a professional baseball contract because the basketball contract will likely offer more money and no chance of trudging through the minor leagues like a baseball contract would. That possibility filters some of the talent away baseball.

For collegiate two-sport athletes, the argument could be made that since they don't spend their entire college careers focusing on one sport that it can be harder to perform well in one or the other. I'm not sure of the statistics, but I would imagine that football, with its higher national visibility than college baseball games, gives more chance that if a player pulls off a great/memorable football play, they'd be more likely to get drafted by the NFL.

Apr 16, 2010 08:17 AM
rating: 0
 
R.A.Wagman

The problem with this theory is that there are only 60 basketball players drafted annually and 224 in the NFL. How many of those guys also play baseball? How many also play baseball? Also, I thought the NBA has since mandated at least one year of college experience for North American prospects before being eligible for the draft - Am I wrong?
In that light, I don't think baseball loses more than a handful of elite amateur prospects to other sports on an annual basis. Regardless of colour.

Apr 16, 2010 09:09 AM
rating: 0
 
Richard Bergstrom

I don't know the NBA draft rules much, but competition from other sports does thin out the talent even if it's just one or two or twenty prospects. I don't know what percentage of college baseball players are African-American either.

Apr 16, 2010 20:42 PM
rating: 0
 
drmorris

My hunch is that, if anything, a sort of affirmative action might be getting underway in key markets with significant African-American or Latino populations. No club has come out and stated it, but the Marlins seem particularly attuned to the development and marketing of Latin players -- which would make perfect economic sense, given the makeup of the local populace. Jason Heyward is discussed in the most ambitious terms in Atlanta, not just as a force for winning ballgames but as a potential force for reinvigorating black audiences for baseball.

Apr 15, 2010 11:10 AM
rating: 0
 
Noel Steere
(965)

The second half of the article was very strong, but I think the first half's discussion of the differences between prejudice and discrimination are misleading. The example of the white racist car owner is used to represent a case where there's discrimination ("treating two groups differently") without prejudice ("an adverse opinion without reason or logic"), but it's clear that, as a racist, he *is* using prejudice to make his decisions about who to hire.

I also dispute the description of how the market corrects for these issues. When you write "the [racist] competition would drop like flies", it implies that the "magic of the marketplace" makes these systemic problems melt away, or even that they can't exist in the first place (e.g., the joke about how a young economist sees a $100 bill on the street and tells the older economist he's walking with. The old economist says to him: "Nonsense. If there really were a $100 bill on the sidewalk, someone would have already picked it up"). The dominance of the NL over the AL after the color barrier was broken occured in the '60s, nearly 20 years later, not exactly "dropping like flies".

Further, while it opened the door to superstar talent (Robinson, Mays, Aaron), it's an open question whether there's prejudice involved in selecting the end of the bench. (This was mentioned in "When It Was A Game III": Aaron talks about how the black players were very few, but they were all superstars and expected to produce like them.) I remember the discussions on r.s.bb and early Prospectus about why Warren Newsom couldn't get a regular job when he was clearly more qualified than the people ahead of him, and the theory was positied that, when it comes to the last spots on the bench, racial bias might be a factor.

Re statistical discrimination: You state "If certain traits are seen as more common in one race and are believed to affect productivity...", but that it's without prejudice. Two things: 1) If they're only "seen as more common", then it's an opinion without quantifiable evidence, and thereby a candidate to have been driven by prejudice. 2) Even if there is a measureable difference, those differences may be a result of prejudice from other parameters that effect the subjects. This type of discrimination becomes particularly nefarious because it can be used to rationalize prejudice (as with (1)), or pretend that prejudice isn't an underlying cause for the discrepancy (as with (2)).

I definitely agree with you in the case of Dye, though. Hudson himself is a bit of a quandary; both of the last two offseasons I've been scratching my head as to why teams were so lackadaisical in giving him a look.

Apr 15, 2010 11:21 AM
rating: 6
 
BP staff member Matt Swartz
BP staff

I appreciate the comment, but please remember the distinction I made between discrimination and prejudice. If one makes inferences based on observed statistical tendencies, that is statistical discrimination but it is based on information even if it's a biased sample. The best example of statistical discrimination is the one I gave in the article about women's labor market exit rates.

I do think that the market corrects issues when the affect is real. On the field production is very measurable, so I think the market corrects for these issues. I have always enjoyed the joke about the economist and the $100 bill on the street, but it's important to ask yourself if you have ever seen a $100 bill on the street. Probably not, I'm guessing.

The dominance of the NL over the AL after the color barrier being broken fits right into what I'm saying in my article. The "magic of the marketplace" is due to free entry. As I explained in the article, free entry of new firms is not possible in baseball with finite teams, so it's possible to sustain a barrier like the color barrier.

The bench filler issues that you bring up are a good example of where off-the-field value can push players over and under replacement level. The closer you are to replacement level, the more likely perceived off-the-field value can affect your ability to get a job.

Please don't misunderstand my point about statistical discrimination. I am not justifying anything. I'm identifying the issue. If we can understand that the human mind categorizes and we can identify how it can categorize based on observations, we can work on solutions. Without solutions, it's just finger pointing.

I don't quite understand why Hudson hasn't gotten more attention on the free agent market, but there are plenty of individual players who seem to be undervalued by the market (i.e. why did Cliff Lee twice get traded for lower value prospects than his contract and value would suggest?). That Hudson is Black can't be assumed to be the reason.

Apr 15, 2010 18:38 PM
 
Noel Steere
(965)

"I appreciate the comment, but please remember the distinction I made between discrimination and prejudice. If one makes inferences based on observed statistical tendencies, that is statistical discrimination but it is based on information even if it's a biased sample."

There's a large disconnect between the level of thought used by the people in your hypothetical and the actual level of thought used by real people when dealing with people of other races/cultures, but let's put that aside for the moment: Even if people take statistical samples, you're implying a perfect level of conscientious behavior that many people don't have when using statistics. That is, they use statistical samples that have obvious bias to rationalize their prejudices. Think "The Bell Curve".

Moreover, it's not just that people categorize based on observations, it's that they weight observations based on which ones favor their point of view. As such, it's hard to imagine "statistical discrimination" as you describe it done by the general public (i.e., the baseball customers c. 1947 in your example).

If you need to hang your hat on free entry and a nearly infinite number of companies for "the magic of the marketplace" to work quickly, then it truly is magic in as much as it, like magic, doesn't exist in the real world. Don't get me wrong, I agree that models are useful, but it's also important to revise the model when it fails to capture reality.

Apr 16, 2010 11:30 AM
rating: 0
 
BP staff member Matt Swartz
BP staff

You're more than willing that people are using statistical samples to making inferences, but than you seem to want to assume that all people who do so are suffering from confirmation bias. I'm just saying that people making inferences from statistical samples is a relevant aspect here. Unless you're unwilling to admit that some people are not inherently biased before they meet other people, then you shouldn't have a problem accepting this. People don't need to have statistics degrees to be statistically discriminating. I'm just talking about a general trend. It's hard to believe people put zero weight on any experiences they have ever.

You're also totally missing the point of free entry. It's not that there are an infinite number of companies that need to consider entering. It's just that there needs to be no barriers to entry for any individual with a good idea. Very few industries are going to fail to meet this description. Baseball has a government sponsored monopoly and is therefore unique.

Apr 16, 2010 12:14 PM
 
Richie

Maybe the attitude he expresses here has a little bit to do with Hudson's relative looklessness.

I'm of the opinion that blacks do get penalized more for malcontentedness. But if that played out all that much re MLB rosters, then Dukes would've been exiled for good long, long ago.

Hurts massively come post-career time. Best of luck to Bradley and Sheffield in finding baseball employment post-career (not that they'll have any $$$ need to). If Larry Bowa were black, I can't imagine him getting even a first sniff at employment on a MLB team. As is, he's got a job somewhere so long as he wants one. Black malcontents are 'bad actors'. White malcontents eventually become 'guys whose only sin was wanting to win too much'.

Apr 15, 2010 11:44 AM
rating: 6
 
Andy

John Rocker and Marge Schott. Both overtly expressed racism and were basically run out of the game. If such prejudice and racism stays under the surface it seems more acceptable to the fans, once it becomes obvious that will affect fan loyalty.

Could a similar article be written about African-American quarterbacks in the NFL?

Apr 15, 2010 13:16 PM
rating: 0
 
Michael Bodell
(89)

Yeah, the white malcontents "wanting to win too much" and the bench/marginal white guys being the "scrappy" or "gamers" while the bench/marginal black guys being the "unemployed" I think are symptomatic of the issues.

Apr 15, 2010 13:18 PM
rating: 2
 
rweiler

I don't think Jermaine Dye has much to complain about, but I also think that being black didn't help Barry Bonds find a job after the Giants cut him lose. It isn't like he was the only guy in MLB that was taking PED's, and even at age 42, he was a better hitter than most of them.

Apr 15, 2010 13:50 PM
rating: 1
 
John Carter

Most jobs are found through networking. Euro-Americans have overall held the highest paying jobs - since ever. Typically, people know other people raised in their same economic class - through the neighborhood they grew up in or the schools they attended. Therefore, most Euro-Americans know other Euro-Americans more than Afro-Americans on a relative basis. So, if an equally qualified Euro-American and Afro-American are going for the same job, more frequently the Euro-American will get that job, because more Euro-Americans are in a position to give the job and are thus more likely to know the Euro-American going for that job.

Is it prejudice or discrimination to hire someone you know over someone you don't know - if they are otherwise equally qualified? That could be what is causing much of the disparity outside of baseball. Is there a word for it? Old-boys networking? Anyway, I suppose that is the justification for reverse discrimination, but reverse discrimination will unfairly discriminate against Euro-Americans coming from poorer backgrounds. Then if you reverse discriminate in favor of Euros from poorer backgrounds, what about the affluent Euros? Why shouldn't knowing those doing the hiring be a slight advantage?

Just because there is an appearance of a problem, does not mean that the problem is as large as it superficially looks.

Apr 15, 2010 14:29 PM
rating: -3
 
BP staff member Matt Swartz
BP staff

What you describe certainly sounds unfair. I also am very doubtful that the wage gap-- which I think is something like 30% overall and 19% after you correct for education and experience-- can be explained by connections. That seems like way too large of an effect. I'm also pretty sure that Blacks earn less even controlling for parental income, but I haven't really tried to do that research since I was an undergraduate and I could be misremembering so please don't take my word on this.

Apr 15, 2010 18:44 PM
 
PeterBNYC

I am dismayed that Orlando Hudson, who shouldn't really have any beefs with baseball, and who has made far more money as a ballplayer than I or 99% of the readers of this site could ever hope to in our own lives, now chooses to throw gasoline on this situation. Gentlemen, Jackie Robinson broke the color barrier 62 years ago! Is this representative of where relations between the races are in the sport today? I don't think so. If I were one of Orlando Hudson's teammates, I might be hurt and dismayed by his attribution of racism to the business from which I get my livelihood. And I very much doubt his remarks have helped Jermaine Dye. Matt's analysis of Dye's situation seems eminently fair to me. Is it realistic of Dye (or Sheffield?) to expect to be signed by a club at the salary level of their last contract? Johnny Damon wasn't. This really saddens me.

Apr 15, 2010 15:06 PM
rating: -3
 
JSokes

I expected a lot more from this article.

Why didn't Matt actually do any statistical and economic research about this?

I have come to expect rigorous and enlightening analysis from him.
Why not do some actual research, in which you come up with a table of how black players performed in the 2-3 years before they signed a contract vs. how white players performed?
You could account for age, career stats, whatever.
That would seem to at least offer an answer to the question.

Instead, we are left with jargon from Econ 101 about the various categories of customer/employer discrimination as a way of speculating about race relations - surely one of the most complex issues in America.

Swartz also displays shockingly little knowledge of the history of baseball integration. Branch Rickey did not wake up one morning and decide he could make money off of Jackie Robinson. Robinson's breakthrough was the result of years of lobbying by civil rights groups, political organizations, and black journalists.
Rickey's decision to sign Robinson simply does not fit into any of the economic models that Swartz puts forth.
I would expect more expertise from BP, rather than a recycling of the Robinson/Rickey morality tale.

All that said, I still appreciate that BP is starting to make some effort to talk about race in baseball.

Apr 15, 2010 17:11 PM
rating: -1
 
BP staff member Matt Swartz
BP staff

I certainly might do some empirical research on this topic, but I did link to J.C. Bradbury's blog post which has links and summaries of a dozen different studies on the topic over the years. My point in the article, however, is that you need both theoretical and empirical research to talk about this issues because of other correlations. For instance, 57% of starting shortstops in the league right now were born in Latin American countries, compared to about 20% overall in the league. WARP and WAR treat positional adjustments differently, and if one of them is wrong, it will affect how we perceive Hispanic discrimination. The economic theory on this is not just a toy, and I was able to take it very far on this. Once you have theoretical modeling, you can do empirical testing better.

I'm also not really sure how the existence of lobbying for Black players in the MLB discredits anything I wrote in the article. Obviously lobbying has an effect, but my point that Rickey took a chance and that Robinson had to endure customer discrimination and do his best to change it remains true either way.

Apr 15, 2010 18:52 PM
 
smallflowers

Milton Bradley & Orlando Hudson entered the same off-season as FA's. Bradley scored a multi-year deal as a human that, as CK has pointed out several times, cannot play defense, hit, and stay healthy at the same time. And is a corner OF, probably the most replaceable job in baseball at the moment. Hudson could only ink a 1-year deal as distinguished 2B that has by and large stayed healthy, played defense, and hit all at the same time. They are approximately the same age; one has just about the worst reputation/behaviour in the modern era of MLB. The other is widely considered a team-player & club-house-plus. And both were signed by approximately equal GM's.

Personally, I believe that it is the influx of OTHER races and nationalities into the majors that have knocked every existing block's percentages down. And I would find it very difficult to believe that if there was indeed a "black malcontent" player available cheap, existing as an asset that could be exploited, Billy Beane or one of the other highly creative GM's would snap him up.

This is a problem at the micro level - kids do what is fun & cool & what they're good at. If baseball no longer provides this for specific segments of youth, they will not grow up to be ballplayers.

Apr 15, 2010 17:57 PM
rating: -1
 
smallflowers

edit: *wouldn't* snap him up.

Apr 15, 2010 17:59 PM
rating: -1
 
BP staff member Matt Swartz
BP staff

Identifying the market inefficiency has always led to correcting it. If I have discussed a market inefficiency here that is researched further and identified, perhaps that will happen. I can't say. Hudson's value could be low for any number of reasons and it's not hard to see why people would take a shot at Milton Bradley anyway. Keep in mind though, as I mentioned earlier in the comments, that Bradley's last "valuation" on the marketplace was "=Carlos Silva". Not exactly getting away with his off-the-field issues right now.

Apr 15, 2010 18:54 PM
 
smallflowers

Matt, whether or not Bradley is "very uniquely talented" or not isn't the point; he is a prime example of a "Black malcontent." We would either have to find a white counterpart from the same market to compare contracts, which probably doesn't exist, or we could compare teams' valuation of him compared to a comparable player that is also a "model citizen."

I'm sure more-than-viable arguments could be made that have Orlando Hudson as a more valuable asset than Milton Bradley. Hudson has a much higher career WARP with two less seasons of service time, and two 5-6 win seasons to Bradley's one. Of the four highest WARP seasons between the players, Hudson owns three of them. (And of course this doesn't even add in his Good Citizen Wins points.) Yet Hudson, club house gold, goes year-to-year at a far more premium position, while Bradley receives a relatively massive contract. Carlos Silva wasn't involved in 2008 post-season. Yes, Bradley had a 1.000 season that year, but subtract defense, add injury prone-ness and that a 1.000 for a DH mugging as a corner isn't exactly a display of unique talent. His stock, like the stock of many COF/DH types that offseason, was down. Yet he was paid well, and Hudson wasn't.

Apr 15, 2010 20:32 PM
rating: 0
 
BP staff member Matt Swartz
BP staff

Again, individual players have a variety of factors influencing their contracts. A player could have a questionable ticking time bomb injury that shows up during physicals that makes his value inexplicably low. It's tough to say definitively in one case. Looking at larger samples is just better.

Apr 15, 2010 20:54 PM
 
JSokes

Bradley had a .999 OPS in 500 plate appearances the year before he signed the deal. In retrospect, this season was obviously the outlier.

This is quite a bit better, for example, than JD Drew's stats in the years before he signed his multi-year deal with the Red Sox.
And Drew now makes 14 million.
(I pick Drew because he is also an oft-injured corner outfielder.)

I wish that Matt Swartz had provided us with a real list of this kind of data, and some conclusions about it, rather than discrimination categories and a mis-interpretation of how Jackie Robinson broke the color barrier.

Apr 15, 2010 18:12 PM
rating: -2
 
BP staff member Matt Swartz
BP staff

So why is it unreasonable to think that teams recognized Bradley's .999 OPS was an outlier? J.D. Drew has performed up to his contract overall, hasn't he? I don't think this is a good comparison.

I also again fail to see where I'm misinterpreting Jackie Robinson breaking the color barrier. You mentioned lobbying above, but that's not related to what I was discussing. Mentioning various other aspects of the negotiations was not relevant to get my point across either. What I said is true, as far as I know. If I'm stating something inaccurate, please tell me.

Apr 15, 2010 18:57 PM
 
smallflowers

That .999 was in 124 games. That that was his most amount of games since 2004, six teams ago, when he grimaced in a career high 141 games. In light of that, it wasn't so much an outlier as it was a display of what he's capable of when DHing - 3/4ths of a great season.

JD Drew is a vastly superior player to Milton Bradley - Drew's been much healthier (he is oft-injured, but Bradley is Prior-Wood level) & is an immeasurably greater defensive player.

But the point is how well Bradley is being paid, despite his injury history and the fact that he is probably considered batshit crazy by most front-office types. And how poorly paid Orlando Hudson is, comparatively.

Apr 15, 2010 20:54 PM
rating: 0
 
amacrae

Tigers traded White Nate Robertson for almost nothing and kept Black Dontrelle Willis. The size of Dontrelle' contract means he gets more chances to succeed than Nate. Its the color of money in sports, not the color of skin.

Apr 15, 2010 19:39 PM
rating: 2
 
JSokes

I would like to hear your thoughts on what a good comparison would be, because I presume you have more data on the contracts - and more expertise in interpreting that data - than the rest of us.

I would readily admit that JD Drew might be a bad comparison, but I would like to see some good comparisons to make the point.

Perhaps I'm the one who misunderstood your points on Jackie Robinson.

In one paragraph, you state that Rickey broke the ban on black players and thus restored the principles of the free market.
In the next, you state that the Dodgers were "taking a risk" on their bottom line.

So, I'm unclear whether you're going with the story that Rickey was signing Robinson as a pre-meditated decision to rake in more money - which he did, at least initially, by bringing so many more African American fans to the stadium.

Or, are you saying that he took a market risk in the name of doing something morally correct?

These are the two traditional Robinson tales - the market story and the morality one.

They both leave out the fact of the political pressure that was exerted on Rickey - and in New York City - for many years.

I wasn't sure that your employer discrimination/consumer discrimination/statistical discrimination left any room for a factor like that.



Apr 15, 2010 19:51 PM
rating: 1
 
BP staff member Matt Swartz
BP staff

I will probably try to come up with a good way to look at this empirically at some point, but it's a tricky concept so I'd need to solidify my approach to contracts in general once. It would be dangerous to try to find a one-to-one comparison like J.D. Drew because there are so many factors that go into an individual player's perceived value that you don't know when something else is going on.

As far as the Branch Rickey aspect, I think that it was a risk that he was willing to take that others weren't. I think he probably thought it would be good for business, so in that sense, I'm somewhat in tune with the "market story" versus the "morality story." At the same time, it was obviously a risk that many owners would be on the fence about, and he went with the moral side and can be commended as such. Still, I think customer perception was a big part of the story, so I think Robinson's behavior was going to be crucial in any market story.

I guess I'm saying that employer discrimination would be hard to maintain and it was only maintained as long as it was because of the lack of free entry, but that the customer discrimination persisted which is why even in 1947 only one owner took a risk on Robinson. I'm not sure there was enough information then for statistical discrimination to be playing a role. I think Robinson might have helped any statistical discrimination by being so calm and focused in the face of prejudice. If he created a bad stereotype, it would be harder for other players. Given the pressure he was under, it's tough to imagine many people being able to do so.

Apr 15, 2010 20:31 PM
 
pyrodudejim
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"Rational Behavior" and "Baseball Economics" are seemingly incompatable terms. Usually money drives the bus and the execs are trying to figure out how to best spin their latest move. What drove the Indians trades of C.C., Lee and V. Mart?

One might believe that Black Americans should have a built in advantage over Dominicans, Venezualans, Cubans, Japanese, Chinese, Koreans or any of a dozen other imports. They know the language (although their use of it is often amazing) and culture.

Between the chalk stripes, performance rules and money follows. Who would you be going out of your way to get on your roster, Dye, Sheffield or Andrew McCutchen? The Pirates sent McClouth to the Braves for what they could get mostly to save a bunch of money and bring their prize baby to the show.

How many free agents turned down offers because they thought that they were worth more only to find out that no one was willing to pay their price. I believe that Bobby Abreu took about a $12 million pay cut to go to LA, but he IS playing.

Quit whining and play the game. High School kids sign for more than I will make in my lifetime. YES, you ARE special. Get over it.

Apr 15, 2010 20:46 PM
rating: -6
 
BP staff member Matt Swartz
BP staff

You lost me with your first sentence. If you don't think rational behavior drives some of baseball economics after reading my columns, I just don't know what I can add in a comment that will change your mind. I think it's pretty obvious that the Indians had lower marginal values for CC, Lee, and VMart then their trading partners did and so there were gains from trade available where they had a higher relative benefit for future wins than present wins. Your example about Dye, Sheffield, and McCutchen isn't clear enough yet so you're going to need to elaborate. I don't think the existence of some players who risk saying no to contracts has anything to do with this issue.

I'm also not getting the "quit whining" example. If Jermaine Dye were facing discrimination (which, again, I don't think is the case for him), that's millions of dollars that he doesn't get. That's enough for a generation of Dye to live off of, and so it's relevant to him. It might not seem like much when you have a lot of money until you realize that there is a generation of his family who will either be set for life or not based on a couple million dollars. That they like their jobs does not mean that they deserve to be ripped off, especially if it's inequitable.

Apr 15, 2010 21:01 PM
 
Noel Steere
(965)

Happened to see this yesterday after reading this article. The warmest welcome to Delmon Young, via Bat-Girl in Minnesota:

http://mngameday.blogspot.com/2007/11/team-chemistry-delmon-young-style.html

Apr 16, 2010 11:33 AM
rating: 0
 
Kampfer

If I am going to argue for Hudson...
Why is Mike bleeping Jacob hitting fifth for the Mets while Dye is unemployed?

Apr 17, 2010 03:28 AM
rating: 0
 
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