Maybe hating is too strong a word for it. Maybe being angry or envious is a better
description of what’s happening and what various politicians and organizations
are vigorously promoting. But since
those same organizations and advocacy groups freely use the words “hate” and
“haters,” it’s probably not completely unfair.
In this case the hating is not only selective, but also difficult to
justify.
Here is a graphic that has been going around on social
media. It shows the total compensation
of health insurance company CEOs. The caption
and comments imply that this is the reason for the sharp increase in Obamacare
(ACA) premiums for 2017. Let’s take one
example and see what’s going on.
Let's not quibble over the fact that the information is three
years old or that they calculate daily pay based on 341 days in a year. If these folks have moved on, they were
likely replaced by others who were equally well compensated. Instead take the first gentleman, Joseph
Swedish as representative.
He is the CEO of WellPoint, which operates Blue Cross Blue
Shield plans in 14 states. Here is some
information from a CNBC report from 2014.
“The company had 37.5 million members at the end of the quarter, up 2
million members from a year earlier.”
Apparently he is doing a good job of growing the company and meeting
analysts’ expectations. But is his pay driving up premiums?
Take the $17 million shown above and divide by the number of
customers, 37.5 million, and get 45 cents per customer. Divide that by 12 to calculate the effect on
monthly premiums and we find that if he were paid nothing, each customer might
see a 3.8-cent reduction in monthly premiums – 3.8 cents! (By saving this up for 10 years each customer
could afford one trip to Starbucks.)
Maybe it’s the fact that the government forces us to buy
health insurance that causes such a negative opinion of these CEOs. By contrast, we never seem to get upset about
the amount paid to the Disney CEO or star athletes. We never hear people complaining that the
ticket prices would be lower if their favorite quarterback made less money. We give these people our money freely, even line up to do it, in return for a limited amount of entertainment and they also get rich.
Look at the recent Desert Trip concert in Palm Springs. Most of the 75,000 tickets were gone in less
than five hours, with the good seats going for $1599 each. The promoter is expected to gross $160 million
for the three-day event, while paying the headliners up to $7 million each (for
showing up and playing for a few hours).
The LA Times reports that these rock stars from the sixties continue to do
very well for themselves. “Since 2000,
the Rolling Stones have grossed more than $1.1 billion with their periodic
tours, according to Pollstar, the concert-industry-tracking publication. [Paul] McCartney
has racked up $761 million, [Pink Floyd’s Roger] Waters has pulled in $592
million, followed by [Bob] Dylan ($293 million), the Who ($200 million) and
[Neil] Young ($153 million).”
We love to hate those one-percenters, the people making a
lot more money than we do, but the outrage is selective. When it’s Mick Jagger, Bob Dylan, Lady Gaga, Peyton
Manning, Rory McIlroy, George Clooney, Tom Cruise, or Oprah, then it’s OK. Making almost $50,000 a day is very impressive, but
it pales in comparison to $500,000 - $750,000 for a single speech. We love the ones who perform for us and hate the ones who help us pay our doctor bills. Objections to the rich are both very selective
and difficult to justify.
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