The $200,000 Lifeguard Effect: What it Says About Unions and Inelastic Pay

I know friends in high school who went through the hoops to become lifeguards but most of them didn’t make that much.

My lifeguard career derailed when I realized I would have to be next to a Banana Boat factory in order to supply my sunscreen needs. So I chose to ref basketball and soccer until I got tired of parents yelling at me over a kids game that ended with a score of 20 to 16.

In any case, all of these jobs had low pay. Lifeguarding was good because it lasted all summer, it was a steady schedule, and it was one of the higher paid positions you could get.

But who knew that lifeguarding could be so lucrative? In Orange County, California, professional lifeguards are making over $100,000 per year, on average.

More Baywatch and less real life?

The Orange County Register did an interesting piece that revealed the inner workings of the lifeguarding programs. In it, they say:

According to a [Newport Beach] city report on lifeguard pay for the calendar year 2010, of the 14 full-time lifeguards, 13 collected more than $120,000 in total compensation; one lifeguard collected $98,160.65. More than half the lifeguards collected more than $150,000 for 2010 with the two highest-paid collecting $211,451 and $203,481 in total compensation respectively. Even excluding benefits like health care and pension, more than half the lifeguards receive a total salary, including overtime pay, exceeding $100,000. And they also receive an annual allowance of $400 for “Sun Protection.” Many work four days a week, 10 hours a day.

There is no denying that lifeguards protect swimmers and play a vital safety role in protecting numerous beachgoers every year. In 2010, the total number of rescues by Newport Beach lifeguards was 2,190. Even so, these salaries seem too generous, and the compensation levels don’t appear fiscally sane.

That’s generous indeed, even with California’s lofty cost of living taken into account. And considering the budget spotlight California has had on it, it should be no surprise that news about $10ok per year lifeguards is getting quite a bit of attention.

Abuse or simply bad compensation models?

Some want to equate this issue to poor or even abusive public sector pay practices, while cities and other municipalities go out of their way to defend it as staying competitive with other city employees, and, other cities’ lifeguard pay. To be completely honest though, it is hard to distinguish between the two. For instance, “staying competitive” has been the lifeblood of excuses for triple digit increases in executive salaries in the past few decades.

While I’m certain that cities like Newport Beach have tried to make sure that they are comparable to other cities, the problem is that other cities are looking at those others, too. They also likely used compensation surveys and consultants that often (but not always) have a bad rap when it comes to the accuracy of their work.

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What’s even more interesting is that lifeguards can retire in Orange County at the ripe old age of 50 and tap into a generous pension package based on their pay at retirement. For cities like Newport Beach, that leaves them paying more money to lifeguards who are no longer working than to the ones who are currently out of the beach (and everyone with knowledge of the airline industry is nodding their head with familiarity at that). It’s not a good model, but who is to blame?

More than just a union and wage problem

Everyone likes to pile on the unions when it comes to these situations and certainly they play a role in this. But still, when you look at a career path for a lifeguard, the top lifeguard is about it. If that’s the top of your union food chain, you take care of those at the top of the career path.

It’s actually part of the value unions can add (in, admittedly ideal, situations) to the organizations they work with. It can also be problematic, especially those with extremely shallow (pardon the pun) career paths. But the problem is bigger than a union insisting on better wages.

The bigger issue is that wages are incredibly inelastic. I know of a situation where a company overpaid for a particular position. When times got tougher and they knew they could get that position for a lower cost, they asked the person to take a significant reduction in pay.

Anyone who has asked for a reduction in pay that wasn’t temporary in nature probably knows how it played out. The person left and a new person was hired at a lower pay level. And that’s not an ideal way to handle the situation.

So how will this boil down? Will these cities in the OC reduce the pay and pension benefits and deal with the fallout from the impacted employees, or will they try to hold their ground by bringing in newer lifeguards at lower wages so that there can be a slower, less painful change?

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