Derby County midfielder Rooney, who spent 18 months at United before leaving the club in January, said that while the trade system is well suited to other American leagues such as the NBA and NFL, players in MLS do not earn enough for the system to be fair.
Speaking on former D.C. teammate Quincy Amarikwa's podcast, "Perfect Soccer's Ask A Pro Show," Rooney said: "I didn't realise it before, but obviously when I got there [MLS], I seen it. My first week, we had a player who, when he finished training, he got told he was getting transferred onto somewhere else.
"I was like, 'Why? What's going on here? Where is he going? What's going on?' So it's difficult. I spoke to [D.C. teammate] Steve [Birnbaum] a lot. I was like, 'Can he do that? Is it that easy to do? Is it that easy to actually move someone on?'
"There's no thought behind it in terms of this player might have a family, children ... a life here. They might get told, 'You know what? Move on.'
"I know it works that way in basketball and in the NFL, but those players get paid millions and millions of pounds. So they can afford to actually do that, but MLS players can't. They probably get a small percentage of money which won't even cover the bills, won't even cover what they have to live on. It's wrong for that to happen.
"I think MLS needs to really look at that because, from seeing it, a lot of them owners are taking advantage of the league [structure], which is affecting American players.
"The American players are just the same as the South Americans, the English, the Spanish. The American players work just as hard, if not harder, and get taken advantage of."
Former Manchester United striker Rooney, 34, scored 25 goals in 52 appearances for D.C. United before joining Derby as a player-coach in January.
He said the league's salary cap is stopping MLS from attracting players in the prime of their careers.
"There is so much potential there, so much potential. There is so much of a market," Rooney said. "I said it when I left D.C., [MLS] have to take on the rules that Europe and the rest of soccer are taking.
"Although they might not want to, and I know the rest of U.S. sports don't do that, but if they don't, then they will never get there [level with European leagues].
"They get players like me and Zlatan [Ibrahimovic], but I can't give them Wayne Rooney from 10 years ago; Zlatan can't give himself from 10 years ago. We can give you ourselves from now, we can go there and earn a decent amount of money and give the fans some entertainment, but we can't give you our full potential.
"If [MLS] want players to reach their full potential, then they have to take the salary cap off."
Earlier this season, Rooney told ESPN that his American teammates in MLS do not earn enough money and called for team owners and league officials to increase wages.
On Friday, MLS began discussions with the MLS Players Association about having players accept significant salary cuts due to the coronavirus pandemic, sources told ESPN.