Insiders and outsiders

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In a modern economy, it’s normal for us to have many roles. We are all at various times and places workers, producers, owners, buyers, sellers. This weird beast called the “gig economy” is blurring the lines even more.

How should this affect the way we view advocacy and collective representation based on economic roles? I think that it’s (increasingly?) proper for us to view them as advocacy for all, rather than exclusively as advocacy for subsets of insiders.

I was thinking about this today while reading about baseball. Of course. Maybe that’s paradoxical, since this is an industry with a particularly well-defined division between owners and workers. Instead I was thinking about the MLB players’ union and their incentives in the upcoming labor negotiations.

Jeff Passan at Yahoo has a column today about the “top bargains” in baseball at the moment. What that means is players who are being paid less than they are worth.

The concept is a complicated one, because current conventions in baseball analysis derive “worth” from what a team would have to spend in free agency to sign a player of equivalent ability. The problem is that it takes many years of “service time” (what a sinister name) before a player makes it to free agency.

But let’s not dwell on the details. However we define “bargain”, the convoluted Major League Baseball rules on service time and “team control” mean that bargains are created more often by the structure of the game than by big surprises in performance.

As Passan says:

It’s what makes guys like Kris Bryant and Xander Bogaerts and Noah Syndergaard and Corey Seager and Mookie Betts so valuable: The first three years of a player’s career can be had for a little more than $1.5 million.

Now, Passan’s column is explicitly not about these players, but rather about contracts signed with players after that point in their career. Yet everything about the business of the game flows from the artificial suppression of the wages of new players, and a corresponding inflation of the wages of those skillful and lucky enough to survive the gauntlet until free agency.

Why?

“In what other sport is it OK for one team to spend three times as much as another?” one GM said recently.

The obvious answer to that GM’s question is soccer. The single most important difference between the philosophy of sports in the U.S. versus Europe is that European sports (to put it maybe too simplisitically) have a free labor market and U.S. sports have a restricted labor market.

The stated purpose for the U.S. restrictions is typically parity, or in the more modern parlance “competitive balance”. Some way, the argument goes, must be devised to ensure that all teams have a plausible chance of winning a championship within a plausible time frame. Of course, wage suppression keeps money in the pockets of the owners, too, themselves granted local monopolies by legalized cartel and usually awarded tax breaks or public money for stadiums.

More charitable justifications might include be that the extreme size of the U.S. and the rigors of travel mean that a truly national league needs stability and consistent viability in local markets to survive.

Anyway. What about the unions?

This is why the current negotiations are so vital: The union wants to have its cake and eat it, too, as the only league without a salary cap – a noble and worthwhile fight for the players. For it to work, though, the economic disparity cannot grow so large that no levers within the system exist to lift the perpetually poor out of their doldrums.

The implicit assumption is that the key trade-off in this fight is between “competitive balance” and the wages of the players. And, OK, to be meaningful, a salary cap must bite. But surely it is not the only way.

Extreme revenue sharing plus a salary floor plus truly free movement of players might square the circle of competitive balance versus the wages of players. But then who might lose out? The most privileged insiders on the workers’ side: veterans who have already paid the grueling dues to claim their outsized piece of the pie. And the most privileged insiders on the owners’ side: those operating in markets large enough to generate the most surplus value.

So a coalition for labor agreement can be built on the backs of the disenfranchised reserve labor force (minor leaguers, future generations of players) and represented insiders (young players who have not hit free agency). The spanner in these works is the increasingly significant international market for players, previously untamed and perhaps one day formalized into the existing system. It will be fascinating to see how all sides try to incorporate the international market into their thinking.

How can there possibly be a players’ union that is representative of all workers, not just the insiders already playing at the highest echelons of the major leagues? Maybe it cannot be. But let’s not pretend that the interests of those stakeholders at the table are the only interests.

In baseball it is stitch-ups all the way down, from MLB’s self-interested antitrust exemption to the players’ union’s self-interested protection of major league veterans’ interests over the larger player pool. Can we take lessons for the larger economy? Policy analogies abound—international trade, healthcare, minority protections, tax policy. Are we doomed to turf wars among insiders in status, identity, wealth, or can we build empathetic coalitions that cut across levels of privilege?

I hope we can.

In a liberal society rights and obligations should, as far as possible, belong to everyone or no-one, rather than having different rules for different identities. So too it would be welcome if we could strive for representation for all rather than some. This is particularly true for representation for workers’ rights, since otherwise gaps between insiders and outsiders can only grow over time and leave outsiders perpetually behind.

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