State salary numbers don’t tell full story

To read the headlines in the two Boston papers last week would lead one to think that government salaries are spiraling out of control: “More than 1,000 state employees get pay hiked over $100,000” blared the Herald. The Globe fronted with the raw number: "Nearly 9,000 state workers earned at least $100,000". The Herald went on to report that the increase represented a "whopping" 15 percent hike over the previous year.

But looking at the entire state payroll -- which you can, by downloading the full dataset we published yesterday -- tells a less alarming story. Here are two other ways to report the same data:

  • This year's new six-figure earners represent 1.03% of the 106,000 or so state employees listed in the database.
  • The percentage of state employees making $100,000 or more increased from 7.3% to 8.3%, (see the bar chart).

payrollIn fact, the increase in six-figure earners year over year appears to be very close to what one would expect, given current salary distributions. The employees that would be most expected to join the $100,000 club are those making $100,000 in the previous year. Absent a pay freeze, one would expect normal cost of living, promotions, and other increases to move some number of people over any invisible line, no matter where on the scale it is drawn. So if there were about 1,100 people making just under $100,000 last year, we would expect the number making more than $100,000 this year to increase by about the same number.

Looking at this year's figure, it appears that this is indeed the case. Of the 106,000 state employees in the database, 1,125 made between $97,000 and $100,000 in 2013. We can reasonably assume that this is very similar to the number from 2012, meaning that an increase of 1,100 employees now making over $100,000 is about what should be expected. Using the data, we can also estimate that about the same number of employees will join the $100,000 club next year as well.

Now, one could perhaps argue that overall salary levels for Massachusetts state employees are too high, if a comparison to other states led to that conclusion (neither we nor either of the papers attempted such a comparison). One could also argue that overall dollars spent on state payroll should not increase year over year. But since nobody seems to be arguing for a pay freeze, the mere fact of an increase in six-figure earners actually tells us very little about whether the state payroll is appropriate or out of scale.

The lesson here is that context is important when looking at figures such as these. Here's hoping next year's crop of stories about the state payroll keep that in mind.