WASHINGTON -- The negotiations have resumed under the threat of federal action to impose a settlement in the nearly six-month baseball strike, but a union-appointed member of baseball's economic study committee said last week that there is little economic justification for government intervention.
Economist Henry J. Aaron of the Brookings Institute said that the regional economic stress caused by the baseball work stoppage is not significant enough to warrant special legislation to force an end to the dispute.
"It's not economically significant," Aaron said. "No way, no how. Take Milwaukee, which has a population of about 1 million and a gross domestic product of about $25 billion. Baseball generates about $40 million in spending and probably about $10 million in added expenditures. So, if we say that the total is $50 million, that's 1/500th of the total income of the community, or two-tenths of 1 percent.
"Each year, there are normal fluctuations of 3, 4 or 5 percent. It's not enough to cause a perceptible ripple, and that's a city with baseball."
That opinion certainly is not shared by the mayors of those cities, which depend on the tax and lease revenues generated by their stadiums, as well as peripheral revenues generated by tourists who come into town for games. The baseball work stoppage, if it continues much longer, figures to be particularly hard on spring training cities in Arizona and Florida, which depend heavily on the tourist dollars that are generated by spring training games.
For that reason, the U.S. Conference of Mayors recently passed a resolution endorsing the Clinton administration's veiled threat of government intervention.
"I think that we have a right to expect the players and owners to settle their differences so they can keep their commitments to their communities," said Wilbur Smith, mayor of Fort Myers, Fla. "When they come to a community and have us build a stadium, I think we have a right to expect them to put major-league players in it."
Though there is bipartisan support for intervening in the baseball dispute, it still may be difficult for Clinton to push special legislative action through the new Republican Congress. No doubt, administration officials hope that the mere threat of government intervention will have a catalytic effect on the deadlocked negotiations.
Congress probably would have to rationalize legislative action by declaring that Florida and Arizona each are facing a regional economic crisis, but Aaron said that the government should not intervene to prevent the redistribution of tourist revenues which, in effect, would be siding with specific communities to the disadvantage of others that might lure away that revenue.
"Sure, it would cause a distributional effect," he said, "but unless we're going to get into every business fluctuation in every specific community, that can't be the reason. I'm sure there are perfectly good reasons for Clinton and Congress to get involved. I'm just saying economics is not among them. The economic effect has been badly overstated."
Aaron and the mayors agree on one thing. The special status of baseball in American society makes it easier to justify government intervention on less tangible grounds than might be the case with any other industry of similar size.
"If I was in their shoes," Aaron said, "I would be doing the same thing, because I'd like to keep that business."
Aaron addressed reporters on a number of other issues while the players and owners were meeting at the Mayflower Hotel. He supported the union contention that baseball's economic viability should be judged by the rising market value of franchises, and predicted that the restrictive economic system that was rescinded Friday by the owners would have increased franchise values by about $70 million apiece.
He also challenged the notion that market size has a significant impact on competitive balance, and claimed that competitive balance is better in baseball than any other major professional sport.