A story emerged today about the outlandish $800,000 annual salary that a City official is reportedly earning in one of the poorest municipalities in Los Angeles County. The City of Bell, with its mostly Hispanic population of 38,000 is rightfully up in arms over the huge salary of Chief Administrative Officer Robert Rizzo. Rizzo's actual salary is $787,637, with 12 percent annual raises. What a gig! The Chief of Police for Bell makes $457,000. He "earns" more than what Los Angeles Police Chief Charlie Beck makes. For the record, Los Angeles is 100 times the size of Bell. Bell council members "earn" nearly $100,000 a year for PART TIME WORK.
One would be justified to be outraged at the salary, especially in these difficult economic times. Liberals and Democrats have long decried the huge salaries paid to the highest paid CEOs. But upon first glance of the story of Bell's city employee salary debacle, Conservatives, Republicans and Libertarians would be the ones to cite the story as evidence of governmental "largesse" and yet another example of financially irresponsible behavior on the part of the public sector.
So, are the "small government types" hypocrites for recognizing that the city employees are overpaid but CEOs are not?
No.
Here's the difference: "City Employees" are supposed to be "Public Servants". No one is begrudging them the ability to take care of their families. Certainly, we want bright minds full of ideas and creativity that would need to be compensated to get them to get into "public service". But come on, are we seriously supposed to believe that "economics" are the driving force behind the size of the salaries of Bell's city employees? That somehow, they deserve to be paid for what they do, at a higher rate than what their counterparts do in a city 100 times Bell's size? Undoubtedly, when these folks retire, they will be entitled to 75 to 100% of their annual income in their "retirement packages." This is at the heart of the debacle that unfunded liabilities have landed us.
CEOs, entertainers, athletes are all judged by their performance - their ability to generate revenue for their respective organizations. A decision made by a CEO can have a positive influence on their company to the tunes of hundreds of millions and sometimes billions of dollars. Top athletes can greatly increase the paid attendance of the games they play in, not to mention attract otherwise uninterested people to their sports.
Recently, NBA superstar LeBron James created a huge stir, deciding whether or not as an unrestricted free agent, what NBA franchise he would sign with. While many thought that this whole episode was frivolous, ESPN recognized the marketing opportunity and created a one hour special that they called "The Decision", where LeBron would announce where he was going to play. Not only did ESPN score huge in advertising dollars for this spectacle, the network allowed the ordeal to be depicted in satire by comedian Steve Carell and actor Tim Rudd at the network's showcase annual sports world event, the "ESPYs." ESPN scored big time, no pun intended, in terms of recognizing a marketing opportunity for the network.
The free market system not only doesn't work in many public sector pay scales, it simply doesn't exist there. At taxpayers' expense, somehow it was decided that these people DESERVED these outlandish salaries. The people of Bell are justified in expressing their outrage. Bell is just one city among hundreds in the State of California that are undoubtedly pulling off the same scam. Athletes, for a relatively short period of time are paid huge salaries as long as they can perform at the highest levels of their sport.
As a believe in free market economics, I have a serious problem with CEOs of companies that are bailed out at taxpayers expense who continue to make the huge salaries that they would normally make in a true free market. Because once the "bail out" comes into play, they are no longer operating in a free market, by definition. Overlooking this fact would indeed be hypocritical. Entertainers are paid only as well as their box office numbers. Last time I checked, Kevin Costner and Tom Cruise no longer command the huge salaries that they once did because they can no longer deliver at the box office. So called "Public Servants" in no way are justified earning these types of salaries because there is no honest measure of economics that would justify their pay.
And in the "Age of Austerity" forced on us by government nanny states run amuck, we certainly need to make our Public Servants practice what they preach.
