Bureau of Economic Analysis Local Area Personal Income Data: Somebody Screwed Up the State and Local Government Earnings Data for NYC

A couple of years ago, I wrote a post based in part on Local Area Personal Income data from the Bureau of Economic Analysis, showing how the mean earnings per worker (adjusted for inflation) had changed for state and local government workers, financial sector workers, and other private sector workers from 1969 to 2016 – for Downstate New York, Upstate New York, New Jersey and the U.S. as a whole.  I later added data for Connecticut.

https://larrylittlefield.wordpress.com/2017/11/26/the-executive-financial-class-the-political-union-class-and-the-serfs-redux/

I recently downloaded the same data from the same source to see if there was anything different.

https://www.bea.gov/data/income-saving/personal-income-county-metro-and-other-areas

The data shows that the total earnings of state and local government workers in New York City increased 22.7% from 2017 to 2018.   While Manhattan was flat, the increase was 52.1% in the Bronx, 43.8% in Brooklyn, 39.3% in Queens and 47.8% in Staten Island.  Clearly that did not actually happen.

In the past I would have dismissed this as an error, to be pointed out to the BEA and fixed next year. But more and more data and other factual information has been altered in more and more ways over the past three years, or disappeared completely, specifically for state and local government finances in New York.  So I have begun to fear something worse.  I looked into it.  Here is what I found.

The BEA local area personal income data is aggregated from a variety of sources, and allocated by formula.  The earnings data includes not only wages and salaries but also non-wage benefits; the employment data includes not only wage and salary workers but also the self-employed.  The data for state and local government is rolled up to, among other things, GDP.

The best possibility was that someone was trying to properly allocate NYC local government employment and earnings, previously assigned to Manhattan where agency headquarters are, to the boroughs where the workers are actually employed.  Private sector employers have long been required to properly assign their workers and their payroll by county, but NYC was not in compliance.  The big increases in the outer boroughs, but not in Manhattan, raise that as a possibility.  But the fact that total state and local government earnings soared in the city as a whole implies that is not what happened.

So I decided to download state and local government earnings for all counties in the U.S., with the following assumptions in mind.

  • If there was a widespread increase across all counties, then there was either a technical glitch or a nationwide correction.
  • If there were huge increases across major “Blue State” counties all over the country, I would assume The Donald’s administration was altering the data to make “big government” liberals look bad and, perhaps, boost reported GDP a little.
  • If it were just NYC, I would assume it was part of a plan to erase the evidence of decades of self-dealing by NYC’s political/union class to shift the blame elsewhere as the consequences came due, by discrediting factual evidence.Similar to what Generation Greed is doing across society.

BEA-State-Local-Gov

It’s just New York City.

There are some small places where there were some similarly large reported percentage increases in state and local earnings from 2017 to 2018, but the total increase is not large.  In Routt County, Colorado, there was a 33.0% increase in total state and local government worker earnings from 2017 to 2018.  But that was an increase of all of $37,435.  So they hired someone.

There are no places where both the percent increase and the total dollar increase is anything like NYC.  It appears that whatever happened, happened to the source data coming out of NYC, not at the BEA down in Washington.

Although I’m still not sure what happened to the NYC population data the BEA reported, in 2017, which was 230,00 higher than what was reported for 2017 when the 2018 data came out.

Moreover, it isn’t just the NYC state and local government earnings data for 2018 that is different.  It is all the data going back to at least 2001.

Or maybe further.  Because of an industry classification change, data for 2000 and back has to be downloaded separately from data for 2001 and forward. The BEA often adjusts data going back several years.  Some of its data comes from tax returns, and these can be modified years later. But I didn’t expect the data to change all the way back to 2001, let alone earlier.

For NYC and the U.S. I compared the state and local government earnings data I had downloaded two years ago through 2016, with the new data though 2018, adjusting both for inflation.

NYC State & Local Government Earnings

I had previously found that state and local government workers had gotten richer and richer, relative to the private sector workers who have to pay for them, over the decades.  Mostly due to retroactive pension increases for public sector workers, even as private sector workers faced falling wages and stagnating or decreasing benefits, as many were shifted to temporary status of the “gig economy.” Their diminished well being led not only to higher profits for the executive/financial class but also cheaper consumer prices for the political/union class, active and retired.

So now, two years later with the new data, what do you make of this?

To me it almost seems as if someone went in and reduced reported state and local government earnings in NYC for 2001 to 2017, to try to undermine what the data had previously shown.  I didn’t see it because I didn’t redo the same analysis last year – not enough (usually) changes from one year to the next to make that worthwhile.

But then whoever that someone was either changed jobs, or was on vacation, or forgot to alter the data for 2018, which then rolled into the BEA data for that year.  Leading to the appearance of a huge increase.

If in 2019 the BEA had discovered that NYC public employees has actually been getting more all along, they would have tried to adjust the data for past years too, not just for 2018.   So that isn’t it.

There was no big event in 2018 to explain that jump.  The huge retroactive cash wage increases awarded early in the DeBlasio Administration had already been paid before that. The big increase in pension costs associated with the retroactive pension increases from 1995 to 2008 had mostly already occurred.  Yet another stock market bubble has allowed New York City to claim its pension funds are less in the hole than they actually are, and shift additional taxpayer pension contribution increases to the future.  There is nothing special about 2018.

But there is something special about NYC.  You see changes to past U.S. state and local government earnings, but they are small, and mostly driven by the data for here.

Under the circumstances, do I feel comfortable saying the mean earnings (including benefits) for Downstate NY state and local government workers was 42.8% above the mean for Downstate NY private sector workers (excluding Wall Street) in 2017, but 51.7% higher in 2018?  Not really, so I guess I won’t finish compiling the data and write a post based on it this year.  And hope for a correction next year.

But what if that’s the whole point, and the correction never comes?

The interests and generations that have manipulated the system to take more for themselves and less for others don’t want to face up to the reality of what those others are facing as a result.  The trend of getting rid of facts, or falsifying them, is thus not ideological, as some might try to make you believe.  It is generational, and bi-partisan.

We are probably about to find out that U.S. life expectancy has fallen for the fourth year in row, based on much worse outcomes for the generations now under the age of 62.  A unique and unprecedented trend that implies a massive decrease in well being as a result of a massive economic, social and political failure.  Or perhaps, for those who have controlled out institutions and benefitted from the same decisions and trends, success.

Death is the ultimate statistic, because it is least susceptible to being explained away, rationalized, or falsified. But as our candidates for President debate which federal benefits should be increased for those now over age 62, which additional temporary tax cuts they should get, and why the resulting deficits will actually cost nothing for those coming after, who have “time to adjust.”  What if the new vital statistics show a stunning turnaround with later-born generations being actually better off than those who came before!  Can we believe it?

1 thought on “Bureau of Economic Analysis Local Area Personal Income Data: Somebody Screwed Up the State and Local Government Earnings Data for NYC

  1. larrylittlefield Post author

    Moreover, can we believe this?

    https://www.bloomberg.com/news/articles/2019-11-26/personal-income-booms-in-key-political-swing-states?srnd=premium

    “Personal income growth has been surging in some U.S. political battlegrounds, including a third of the counties in Pennsylvania — which Donald Trump narrowly flipped in 2016 and may need to win re-election next year.”

    “In the president’s first two years in office, a total of 325 counties representing nearly 6% of the U.S. population experienced their best annualized income gains since at least 1992, according to data compiled by Bloomberg News. And 127 of those are located in perennial swing states, including Ohio and Iowa.”

    Argentina.

    Reply

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