A recent article in The Atlantic about the tiny wages that Major League Baseball pays to thousands of players quoted Nathaniel Grow, an associate professor of legal studies at the University of Georgia’s Terry College of Business.
The MLB is able to maintain such low wages (or avoid paying them entirely) thanks to a clause in the 1938 Fair Labor Standards Act. The law, a linchpin of the New Deal that, among other things, outlined the 40-hour workweek and established a federal minimum wage, carved out an exception with which Major League Baseball justifies its practice. Minimum-wage and overtime requirements do not apply, the law stipulates, to “any employee employed by an establishment which is an amusement or recreational establishment” that “does not operate for more than seven months in any calendar year.”
“From a general fan perspective,” Grow says, “there’s no question that the baseball or football teams are amusement and recreational.” But digging into the technical details reveals some complications, he says: “These baseball teams also have sophisticated marketing departments, ticket-sales departments, all these other more core business functions. Are all of them seasonal employees at an amusement or recreational establishment?”
Grow is an expert in the field. His book “Baseball on Trial: The Origin of Baseball’s Anti-Trust Exemption” won the Larry Ritter Book Award in 2015.
The entire article is available online.