Comparison Cities

I've been spending a lot of my nights and weekends reviewing the budgets of other area cities. What I found most interesting was the huge disparities in general fund income among cities, but the uniformity of salaries among cities. I also added in the 2005 Uniform Crime Rates to give you an idea of this variance among the cities as well.

In the chart below, the eight cities listed directly below Manteca are those which have been used in the past for salary surveys. I also listed some additional cities which are similar to Manteca in size and budget--which should probably be considered in future salary surveys as well.



Thus, you can see that ability to pay and other factors such as crime rates have had little or no impact on public safety salaries--or many other city salaries as well. In fact, the two lowest cities on the chart (Turlock and Manteca) offer some of the best pay packages for miscellaneous employees. You also have to question why cities with so little in common with Manteca were used for salary surveys? Tight labor markets--particularly for public safety workers have a lot to do with it.

It was the perfect storm for public safety workers over the past decade. Increased retirement packages created a wave of retirements in public safety at a time when there was a dearth of workers entering the job market. In addition, psychological exams and other pre-requisites were further shrinking the pool of potential applicants. Finally, there was a growing public sentiment to increase the ratio of officers in each community--cities such as Manteca and Stockton were not able to raise funds for parks maintenance but were able to pass tax measures for public safety--mostly due to the political skills of our fire fighters. On top of all this was a boom in jobs which led to an overall increase in wages in all job types.

The result was that cities with paltry revenues were required to pay on an equal par to much wealthier cities--and these cities were then included in the salary study of every poorer city. This put a tremendous strain on the budgets of have-not cities such as Manteca, but the real estate bubble created a short term windfall in revenue.

Unfortunately, the economic bubble has burst and cities such as Manteca and Turlock have to find a way to keep up service levels without going deeper into debt. In the short run, both staffing reductions and salary concessions are necessary to balance the budget. In the long run, we'll likely get bailed out by both economics and demographics. Economically, both high and low revenue cities are seeing major drops in their income. Even the wealthiest cities are reducing their workforces. This will reduce the overall demand for public safety workers. Demographically, there are now far more people entering the workforce than a decade ago as all the kids of the baby boomers are reaching adulthood.

We are now looking at a complete reversal in the supply-demand balance in the job market. Not only do we have an ever increasing unemployment rate, but we have a huge wave of folks entering the job market. Under these conditions, wages always drop in real terms and labor agreements become better connected to the economic conditions of the employer.

Obviously, these trends take time to ripple through the workforce--particularly through government. However, given the tenuous budget situation of every city in the state, it is likely that economic adjustments will happen a lot faster than in past recessions.