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Rich is absolutely right about this one. Incenting umpires to work "down" for more money is rewarding the wrong behavior.
Also...I realize that a single umpire working a lower level game is exuding more energy (maybe) than two umpires working a Varsity contest. HOWEVER...the intensity of a Varsity contest (and the expectations bestowed upon Varsity umpires) requires a much stronger effort from us. I'm not saying Varsity umpires should be paid significantly more, but the thought of a first year rookie getting paid more on the Freshman-B field than the two State Playoff umpires on the Varsity field is mind boggling to me.
If you're having a hard time getting umpires to work lower levels, then how about a recruiting program? Run some ads, put up a quality website, promote your Association, and there will be plenty of newbies to work the lower level games.
My two thoughts anyways.
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