Los Angeles, CA…In the summer of 1984, I desperately wanted to swim in the deep end of the water with my friends at the local swimming pool. I couldn’t swim very well—I was only five—but that didn’t stop me.  I dove off the diving board into 12 feet of water, and promptly started to flail and flounder. I probably would have sunk right to the bottom if a lifeguard hadn’t jumped in and saved me.

I bring up this anecdote for a reason. New reports show that many California lifeguards are making a whole lot of money—more than Gov. Gavin Newsom ($210k), the highest-paid governor in America.

$131k in Overtime Pay Alone

Over Memorial Day weekend, Forbes published an investigation from OpenTheBooks that shows being a lifeguard in California can be quite rewarding. In fact, the results are startling.

“Our auditors at OpenTheBooks.com found that lifeguards make a fortune in Los Angeles County,” wrote Adam Andrzejewski, a senior contributor and founder of OpenTheBooks. “Seven lifeguards made more than $300,000 and 82 lifeguards had total earnings that exceed $200,000 in 2019, the latest year available.”

Leading the way was Fernando Boiteux, who earned $391,971 in combined salary, benefits, and perks as the “acting chief lifeguard” in 2019. He was followed by Captain Daniel Douglas, who raked in $368,668 in total compensation—including $140,706 in base pay and $131,493 in overtime pay.

Nearly all the top paid lifeguards were men, the report notes, and pay was driven largely by overtime. In fact, 31 lifeguards made between $50,000 and $131,500 in overtime compensation alone. (On top of this, lifeguards can retire at 55—on 79 percent pay!)

Why So Much Money?

Needless to say, the compensation and benefits are extraordinary. After all, according to salary.com, the average annual salary of a lifeguard in the US is about $30,000.

So one might ask: what makes LA County so different? (The Forbes article doesn’t answer this question, though Andrzejewski notes it’s one LA taxpayers might start asking, considering that the state’s public employees “already cost taxpayers $45 billion a year.”)

There are several possible explanations. One might think that perhaps LA County lifeguards are simply better than other lifeguards across the country, so they make more. But this doesn’t appear to be the case. In fact, even within LA County performance doesn’t appear to be tied to higher salaries.

“We found that many of the lifeguards who won the Medal of Valor – exhibiting bravery for saving lives – failed to crack the top of the county’s payroll,” notes Andrzejewski.

One could point out that the cost of living is higher in Los Angeles than most parts of the country. While true, the math doesn’t add up. After all, the median household salary in LA—$68,000—is only slightly higher than the national average. Why would lifeguard salaries be an outlier—and a huge one at that—compared to the salaries of other jobs?

The best explanation appears to be the most obvious one: an influential lifeguard union and a splash of cronyism. The Wall Street Journal offers some key highlights.

“The Los Angeles County Lifeguard Association makes [the lucrative compensation] possible. Since 1995 the union has bargained for better wages, hours, benefits and working conditions,” Andrzejewski notes in the Journal.

The story doesn’t end there, however. Unions are always fighting for better wages and benefits. In this case, however, it appears the union obtained its lucrative contract through a non-competitive deal between the county and Santa Monica.

“In 2009 the city of Santa Monica signed a 10-year, $25 million contract with the county for lifeguard services. In 2019 the city extended the contract for five years and $17 million,” the Journal notes. “There were no identified competitors and the contract wasn’t put out for bid.”

Spending Someone Else’s Money on Someone Else

The revelation that many LA County lifeguards are making six figures in overtime pay alone because of a sweetheart union contract is probably a bit aggravating for California taxpayers.

After all, the Golden State routinely leads the nation in poverty. So the idea that some are making ridiculous salaries and receiving compensation 10 times the national average is probably frustrating.

But it’s important to not begrudge the lifeguards. They are not the ones to blame here. The county officials are the ones truly at fault, though some basic economics shows their behavior is not exactly shocking.

The economist Milton Friedman famously observed that there are four ways to spend money.

1. You can spend your own money on yourself.
2. You can spend your own money on somebody else.
3. You can spend somebody else’s money on yourself.
4. You can spend somebody else’s money on somebody else.

LA County falls into the fourth category: it is spending someone else’s money (taxpayers) on someone else (lifeguards). Friedman noted that people spending money in this fashion are the least likely to care about how efficiently that money is being spent.

“If I spend somebody else’s money on somebody else, I’m not concerned about how much it is,” the Nobel Laureate noted, “and I’m not concerned about what I get.”

For those trying to better understand how a state as wealthy as California can lead the nation in poverty, the lifeguard salaries offer a clue. This isn’t to say lifeguards aren’t valuable. As someone rescued by one I can attest to the fact that they are.

It’s just to say that when lifeguards are pulling in nearly $400k a year, it’s a sign that there’s a lot of people spending other people’s money on other people. The results are a sharp contrast to the efficiency and harmony of voluntary labor markets.

Franklin Roosevelt famously opposed public sector unions because he, like so many, saw how they serve their own interests at the expense of the common good.

LA County’s lifeguards are just the latest example to show how true this is.

Source = Jon Miltimore Fee.org