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<\/a><\/p>\nI bring up this anecdote for a reason. New reports show that many California lifeguards are making a whole lot of money\u2014more than Gov. Gavin Newsom ($210k),\u00a0the highest-paid<\/a>\u00a0governor in America.<\/p>\n $131k in Overtime Pay Alone<\/p>\n Over Memorial Day weekend,\u00a0Forbes<\/em>\u00a0published an investigation<\/a>\u00a0from OpenTheBooks that shows being a lifeguard in California can be quite rewarding. In fact, the results are startling.<\/p>\n \u201cOur auditors at OpenTheBooks.com found that lifeguards make a fortune in Los Angeles County,\u201d wrote Adam Andrzejewski, a senior contributor and founder of OpenTheBooks. \u201cSeven lifeguards made more than $300,000 and 82 lifeguards had total earnings that exceed $200,000 in 2019, the latest year available.\u201d<\/p>\n Leading the way was Fernando Boiteux, who earned $391,971 in combined salary, benefits, and perks as the \u201cacting chief lifeguard\u201d in 2019. He was followed by Captain Daniel Douglas, who raked in $368,668 in total compensation\u2014including $140,706 in base pay and $131,493 in overtime pay.<\/p>\n 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\u00a0can retire<\/a>\u00a0at 55\u2014on 79 percent pay!)<\/p>\n Why So Much Money?<\/strong><\/p>\n Needless to say, the compensation and benefits are extraordinary. After all, according to salary.com,\u00a0the average annual salary of a lifeguard<\/a>\u00a0in the US is about $30,000.<\/p>\n So one might ask: what makes LA County so different? (The\u00a0Forbes<\/em>\u00a0article doesn\u2019t answer this question, though Andrzejewski notes it\u2019s one LA taxpayers might start asking, considering that the state\u2019s public employees \u201calready cost taxpayers $45 billion a year.\u201d)<\/p>\n 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\u2019t appear to be the case. In fact, even within LA County performance doesn\u2019t appear to be tied to higher salaries.<\/p>\n \u201cWe found that many of the lifeguards who won the Medal of Valor \u2013 exhibiting bravery for saving lives \u2013 failed to crack the top of the county\u2019s payroll,\u201d notes Andrzejewski.<\/p>\n One could point out that the cost of living is\u00a0higher in Los Angeles<\/a>\u00a0than most parts of the country. While true, the math doesn\u2019t add up. After all,\u00a0the median household salary in LA<\/a>\u2014$68,000\u2014is only slightly higher than the national average. Why would lifeguard salaries be an outlier\u2014and a huge one at that\u2014compared to the salaries of other jobs?<\/p>\n The best explanation appears to be the most obvious one: an influential lifeguard union and a splash of cronyism. The\u00a0Wall Street Journal<\/em>\u00a0offers some key highlights.<\/p>\n \u201cThe Los Angeles County Lifeguard Association makes [the lucrative compensation] possible. Since 1995 the union has bargained for better wages, hours, benefits and working conditions,\u201d Andrzejewski notes in the\u00a0Journal<\/em>.<\/p>\n The story doesn\u2019t 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.<\/p>\n \u201cIn 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,\u201d the\u00a0Journal\u00a0<\/em>notes. \u201cThere were no identified competitors and the contract wasn\u2019t put out for bid.\u201d<\/p>\n Spending Someone Else\u2019s Money on Someone Else<\/p>\n 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\u00a0California taxpayers.<\/a><\/p>\n After all, the Golden State routinely\u00a0leads the nation in poverty<\/a>. So the idea that some are making ridiculous salaries and receiving compensation 10 times the national average is probably frustrating.<\/p>\n But it\u2019s 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.<\/p>\n The economist Milton Friedman famously observed that there are\u00a0four ways to spend money<\/a>.<\/p>\n LA County falls into the fourth category: it is spending someone else\u2019s 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.<\/p>\n \u201cIf I spend somebody else\u2019s money on somebody else, I\u2019m not concerned about how much it is,\u201d the Nobel Laureate noted, \u201cand I\u2019m not concerned about what I get.\u201d<\/p>\n 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\u2019t to say lifeguards aren\u2019t valuable. As someone rescued by one I can attest to the fact that they are.<\/p>\n It\u2019s just to say that when lifeguards are pulling in nearly $400k a year, it\u2019s a sign that there\u2019s a lot of people spending other people’s money on other people. The results are a sharp contrast to the efficiency and\u00a0harmony of voluntary labor markets<\/a>.<\/p>\n Franklin Roosevelt famously\u00a0opposed public sector unions<\/a>\u00a0because he, like so many, saw how they\u00a0serve their own interests<\/a>\u00a0at the expense of the common good.<\/p>\n LA County\u2019s lifeguards are just the latest example to show how true this is.<\/p>\n <\/p>\n\n