The American Community Survey: Economic Changes from 2005 to 2015

Data from the U.S. Census Bureau’s American Community Survey (ACS) data was released a couple of weeks ago, and I’m surprised how little coverage of its findings there has been in the media. Most of what I have read, moreover, compared 2015 with 2014, or with 2010, and finds that the economy is getting much better for many Americans.

That, however, is not a meaningful comparison if one is looking to the long term, or trying to explain why so many Americans feel so much worse off. One would expect that people would become better off in the recovery from a deep recession, or worse off in the aftermath of the peak of a bubble.   Politicians, seeking to make points for their sides, often base their talking points on data from such non-comparable years, but that is disingenuous. As it happens, there are enough economic similarities between the first year of American Community Survey data, in 2005, and the latest year, 2015, to make a comparison between them meaningful. What follows is a discussion, with 26 charts, of the economic trends I found most interesting from that comparison – for the United States, New York City, and New York State, New Jersey and Connecticut. Let’s take a break from the fantasy and deception of politics and look at some reality.

Census Education Finance Data for FY 2014 (Compared with FY 2002)

The Census Bureau’s annual education finance data was released for FY 2014 on Friday June 11. The data shows that NYC spent $24,004 per student that year, slightly below the average of the Downstate Suburbs ($25,041) but far higher than the average for New Jersey ($19,636), Connecticut ($19,388), Massachusetts ($16,884) and Maryland ($15,812).   The Northeast Corridor is a generally high wage, high cost of living area. Even adjusting for this, however, New York City’s average adjusted expenditure per student, at $18,764, was nearly 50 percent higher than the U.S. average of $12,625. On an unadjusted basis New York City spent $14,665 per student on instructional (mostly teacher) wages, salaries and benefits alone, or $293,300 per 20 students and $175,980 per 12 students. And this was at a time when the contract for NYC teachers had been expired for years; spending has soared since, as a result of retroactive pay for past years including FY 2014.

One finds the same pattern for Upstate New York. There, spending averaged $19,428 per student in urban counties and $20,490 per student in rural counties. This compares with the U.S. average of $12,625, the Ohio average of $12,907, and the Pennsylvania average of $16,585, and the Vermont average of $20,488. Links to detailed spreadsheets with data for every school district in New York and New Jersey, and per-student revenues and expenditures by category of revenue and expenditure, follow a discussion of where the data comes from and how it was compiled. As is my custom, I’m going to provide the spreadsheets now, think about them for a while, and then provide my analysis and express my opinion. If you want the facts without the opinion, this is the post for you.

New York City’s FY 2017 Budget Proposal: Change from the Recent Past

One of Mayor Mike Bloomberg’s best innovations, from a truth telling point of view, was the introduction of a table in NYC budget documents that shows how much different government functions actually cost us. By allocating pension, fringe benefit and debt service costs to the different agencies. And by deducting federal and state aid that merely passed through the city’s budget, allowing everyone to see the money the city actually has to pay for in local taxes and fees for different functions. With a New York Democratic Administration coming back in, with an assumed attitude that what the serfs don’t know they don’t deserve to know, I wondered how far it would dare to go to restore the prior level of obfuscation.

The answer is that the Bloomberg table remains for the proposed budget, if in a stripped down format. But the identical tables for the prior fiscal year or two, and the change between the prior fiscal year and the current one, and the current one and the budget proposal, have been removed. So there is no longer an easy way to see what is changing. And yet the budget documents from prior fiscal years are still up on the website of the city’s Office of Management and Budget. Someone is apparently counting on the unwillingness of the City Hall press core and various pundits to type the data from the tables – only available in PDF format — into a spreadsheet, check it once or twice, and examine the results.   I did so, however, and found that according to the Mayor’s optimistic estimate of NYC residents’ personal income in FY 2017, it will have increased 14.5% (adjusted for inflation) from FY 2007. And according to the Mayor’s budget proposal, NYC spending will have increased 23.8%, and city-funded spending will have increased by 29.9%.

State and Local Government Employment in 2002 and 2014: Bureaucracy, Judicial and Legal, and Public Health Employment and Payroll

I will once again end a tabulation of state and local government data from the U.S. Census Bureau with a brief discussion of the Financial Administration, Other Government Administration, Judicial and Legal, and Public Health functions. This will be a limited review, because there isn’t much to add to the more detailed employment and payroll data from the 2012, 2002, and 1992 Census of Governments, which I analyzed here.

https://larrylittlefield.wordpress.com/2014/05/23/general-government-census-of-governments-employment-and-payroll-data/

And the data from the government finances phase of the Census of Governments that I wrote about here.

https://larrylittlefield.wordpress.com/2015/06/14/bureaucracy-census-of-governments-data/

Because the level of employment and pay in New York’s courts has been an issue, however, I’m going to examine that more closely for March 2002 and March 2014.

State and Local Government Employment in 2002 and 2014: Infrastructure and Public Amenities

There are places in this country, generally rural areas, where people don’t get very much from state and local government other than schools, state police, and a road. Instead of public water and sewer, they have private wells and cesspools. Instead of municipal garbage pickup and disposal, they have to take their trash to the dump or pay someone else to do it. Instead of public libraries and parks, they have their own books and backyards. And, as in most of the country, there is no mass transit, no roads that are safe to bicycle or walk, not even many shared rides. Drive your own vehicle or be stranded.

New York City is, at least or based on its state and local tax burden and charges for services ought to be, the complete opposite of this. It has municipal water, sewer, solid waste pick-up, and mass transit. Highly developed at a high density, with most people having small or no private yards, city residents rely on public parks and related facilities for exercise and recreation. And the city has a network of public libraries, most within walking distance, even as most information shifts to the internet. One would, therefore, expect New York City’s public employment in these categories to be higher than the U.S. average. But how much higher? And is this fair value compared with what people could purchase themselves?

State and Local Government Employment in 2002 and 2014: Police, Correction and Fire

One of the big issues in last year’s New York City budget negotiations was the level of police staffing. The Patrolmen’s Benevolent Association and the politicians it helps keep in office asserted that without thousands of additional dues-paying members, New Yorkers would no be longer kept safe. The debate went on and on for months, with many articles and reports from many news sources based on many press releases and statements from many interested parties. Through it all, however, I cannot recall a single report providing objective information on how many police officers New York City already has, relative to its population, compared with other places. In the end the number of officers was increased by 1,000, although I don’t recall any PBA statements conceding that its members were willing to keep us safe in exchange.

This is the fourth post in a series on state and local government employment for FY 2002 to FY 2014, based on data from the Governments Division of the U.S. Census Bureau. The data shows that while police officer employment is down per 100,000 residents in New York City compared with 12 years earlier, mostly due to falling behind the city’s population growth (though the number of officers also decreased), it remains at the same ratio it has been relative to the U.S. average. New York City had 2.8 times as many police officers per 100,000 residents as the U.S. average at a time that New Yorkers were being threatened if they didn’t’ pay up for thousands more, and nobody deigned to even talk about this.

Local Government Employment in 2002 and 2014: Public Schools

Relative to population and even, in some places, in absolute numbers, state and local government employment has fallen in recent years as the cost of retired public employees has soared and tax bases have stagnated. Although many states and localities tried to shield elementary and secondary schools from the fiscal impact of past decisions as long as possible, in the wake of the Great Recession the schools have not been immune.

There are other factors, however, that have offset falling employment. First with the large “Baby Boom echo” generation exiting school age, school age children are a shrinking share of the population. In fact the number of children age 3 to 17 enrolled in school has fallen in the U.S. in absolute numbers from 2002 to 2014. And second, private school employment is rising in many places including New York City, where it was relatively high to begin with.

State and Local Government Employment: Census Bureau Data for FY 2014 Compared With FY 2002

In 2014 and 2015, I compiled extensive data, and published a bunch of posts, based on Census of Governments data from the U.S. Census Bureau.   One can find that data on this page.

https://larrylittlefield.wordpress.com/the-latest-public-finance-spreadsheets/

While Bureau only conducts a Census of Governments every five years, it conducts surveys of state and local government employment and finances every year. The survey size is generally large enough to produce estimates of the totals for the U.S. and all the states, except for some years when budget cuts prevented the work from being done. This year data for FY 2014 will be made available, and I intend to compile it for comparison with FY 2002.

The first analysis, based on recently-released data on state and local government employment and payroll, is described below. As is my custom, while the spreadsheet with the tables is linked at the end of this post, my analysis and understanding of what it means will be presented in a later post. What I’d like is for people to read the background information presented below, download the spreadsheet, look at the tables, and make up their own minds before reading what I have to say about it.

The NYC Subway: Squeezing the Serfs

The demand for subway service is soaring. In the private sector, such soaring demand would probably lead to more service. Why not at the MTA, where peak hour subway service is more than 20 percent lower than it had been 60 years ago, as I showed here?

https://larrylittlefield.wordpress.com/2015/12/28/nyc-subway-service-am-peak-hour-in-1954-and-2014/

I plan to review a number of technical and financial issues below, but will state the underlying issue up front.

Who rides the subway? People that the political/union class, the New York State politicians and the interest groups that support them, think of as serfs. Younger generations, who have been made successively worse off in the economy, public policy and even family life. And who tend not to vote, and certainly do not challenge incumbent politicians by running for office in state and local elections. Immigrants, who can neither run nor vote. And the working poor, young and old, immigrant and native. Many of these people chose to move to New York City precisely so they could live a life that was not organized around automobiles. And the political/union class, whose members tend to drive everywhere and think of mass transit, walking and bicycling as beneath them, seek to make the serfs pay as much as possible with as little as possible in return, for transit and in general. Because they can. No so much up front, which might provoke a reaction, but in the future, which has a way of becoming the present.

Some Notes About New York from the Bureau of Economic Analysis

Local Area Personal income data has been released for 2014, and I’ve downloaded it to see if some of the trends I’ve observed in the past have continued. While there are many positive trends for New York City, it isn’t all good news. In Downstate New York, the mean earnings (including non-wage benefits) of private sector workers outside the high-paid Finance and Insurance sector fell 1.4% from 2001 to 2014 when adjusted for inflation. Which is actually better than I would have expected, and better than in many parts of the U.S. The mean earnings of those in the Finance and Insurance sector, while still sky high, fell 13.6%. But the mean earnings of those employed in state and local government increased 17.6%. No wonder the serfs can afford fewer of them, with larger class sizes and more crowded subway trains among the results.

Some charts with this and other data follow.