Saturday, November 21, 2009

Wage disparity

Betsy Russell reports on the new ITD director's pay. Brian Ness will make $165,000 per year. He was making $118,000 in Michigan. The person he replaced, Pam Lowe, was making $143,000 annually. A spokesman for the ITD, Jeff Stratton, said that after accounting for the higher cost of living in Idaho, Ness' salary represents about a 10% increase in spending power.

Let's break this down a bit. $118,000 increased by 10% would add $11,800 per year. Let's round that to $12,000, add it to $118,000, and we get $130,000. So, if Ness got his 10% increase in Minnesota, he'd be making $130,000.

That $130,000 is equivalent to $165,000 in Idaho, per Stratton. The difference is, per Stratton, due to a 15% higher cost of living in Idaho, higher costs for insurance and for retirement plan contributions.

Let's take this to the level of a run of the mill State of Idaho employee. Half of $130,000 is $75,000, and half of that is $37,500. I'd say that is a decent number to use for comparison. It's about $18/hour. Next, half of $165,000 is $82,500, half of that is $41,250, or about $20/hour.

I don't have a huge point here, other than State employees aren't getting all that good a deal. To keep cutting benefits while freezing wages is to increase the disparity between what State of Idaho employees earn as compared to their counterparts in other states.

One thing that surprised me was, MinnesotaMichigan has a 15% lower cost of living. You know, MinnesotaMichigan, heavily unionized, more Democrats than Republicans (though the current Gov is a Republican), hard, cold, long winters, all that. Cheaper to live there than in Idaho. Who'd a thunk it?


fortboise said...

You said "Minnesota" a bunch of places where you meant "Michigan," didn't you? (And "Brain" rather than "Brian"? :-)

I'd like to see the cost of living data that says Idaho's is 15% higher than Michigan's. What I was able to find when I looked said that Michigan has a higher cost of living.

But that's all beside the point. The same salary Lowe was making would have been a big step up for Ness, and wholly appropriate as a starting salary for someone unproven in this larger role.

The folks doing the negotiation on the taxpayers' behalf seem to have been using rather dull pencils.

alan said...

Good points; thanks.