Tuesday, August 10, 2010

Is best-of-both-worlds Houston pulling away from competitor cities?

Aaron Renn (The Urbanophile) has a fascinating piece over at New Geography titled "Civic Choices: The Quality vs. Quantity Dilemma".  'Quality cities' like Boston, NYC, SF, LA, DC, etc. focus on elite populations and jobs at the expense of affordability or any broad job or population growth.  In fact, their overall job growth is usually negative.  'Quantity cities' like Atlanta, Austin, Dallas, Houston, etc. focus more on broader middle-class growth and affordability.  The article contains two very interesting tables of statistics on these cities.  A couple of observations that jump out at me from the first table on Quality cities:
  • Does Portland's decade of 15.8% population growth with essentially zero job growth mean they just added a bunch of unemployed slackers?  Atlanta seems to be in even worse shape, with 28% population growth but no new jobs.  What are these people doing?
  • The federal government continues to consume ever-greater portions of the economy by creating tens of thousands of jobs in DC and paying them whatever tax dollars are required to cover the high cost of living, allowing DC to buck the market-driven slow-growth of peer cities.  As an aside, has anybody noticed that government jobs have shifted from low-paying but secure to high-paying, high-benefit (roughly 2x the private sector), and still just as secure?  Nice work if you can get it, but I'm not sure it's a good indicator for the country as a whole. (Update: "Federal workers earning double their private counterparts" - USA Today, hat tip to kjb)
But the more interesting table to me is the second one on Quantity cities (Atlanta, Austin, Charlotte, Dallas, Houston, Nashville, Orlando, Phoenix, Raleigh, Salt Lake City), which indicates that Houston is pulling away from similar competitor cities like Atlanta and Dallas in key ways:
  • At 114%, Houston has the highest per capita income of the Quantity cities relative to the U.S. average.  All of the others except for Dallas are below the national average.  We're also ahead of Quality cities Chicago, LA, Miami, and Portland.
  • We're also in the top 3 for GDP per capita ($49K), and, again, actually ahead of Quality cities Chicago, LA, Miami, and Portland.
  • Houston is the only city in the group where average income continued to grow faster than the U.S. average over the last decade.
  • Our job growth over the decade (12.6%) is just behind Raleigh (14.1%) and Austin (12.7%), but well ahead of our peer group mega-metros Atlanta (0.5%) and DFW (3.7%), as well as all of the Quality cities.
Summing up, you could say that Houston has the stats to actually qualify for both tables, with the per capita GDP and income to qualify as a Quality city, but with the affordability, population, and job growth of a Quantity city - the best of both worlds.  No wonder we're winning so many awards and rankings.  Not a bad place to be...

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At 5:38 PM, August 10, 2010, Anonymous Anonymous said...

I'm sure others could provide a more sophisticated analysis, but it seems obvious to me that "government workers" would make much more on average than "people in general" without anything funny going on. I mean, governments don't employ many hotel maids or big-box cashiers, but they do employ lots of white-collar types. Even the guy who drives the garbage truck has to have a special license and training and everything!


At 5:56 PM, August 10, 2010, Anonymous Martin said...

And the people in DC who get these relatively high-paying government jobs are the elite, top talent. Despite the stereotype, most people who work at the upper levels of the federal government (and if you are in the DC office of almost any of these agencies, you are in the "upper level"), are extremely well educated and highly skilled. Most of these people could be working in the private sector making more money (and maybe living in a cheaper city). But they choose to work for, say the CIA, the White House, the NSA, the State Department, etc. for personal reasons that often have nothing to do with pecuniary gain.

At 6:23 PM, August 10, 2010, Anonymous Anonymous said...

Actually, I think it's probably still the case that government positions are lower-paid but more secure and have better pensions than comparable private-sector ones. And of course you have things like firefighters where it's hard to find comparables.

Interestingly, soldiers are not paid well at all for what they do, but I don't think they get folded into "government employees" when people are discussing this stuff.


At 6:48 PM, August 10, 2010, Blogger Alon Levy said...

Some corporations have learned that the best way to evade taxes and regulations is to go to the government workers who are supposed to supervise them, and offer to triple their salaries if they switch sides. This doesn't happen in the other direction.

At 7:08 PM, August 10, 2010, Anonymous kjb434 said...


So you guys are defending government employees.

I'll only defend a government employee when the the ability to fire them on whim is common practice.

No one in their right mind can believe that the all the government employees in the DC metro are warranted. I believe a 25-35% reduction in the federal government employees would see not change from the public's interaction with government. This reduction could easily be achieved with performance based reviews.

Also, Federal government jobs often do pay more on base salary for private sector equivalent. State and local typically trail private sector base salaries. In my field I can look at the USACE and get an instant 10% boost in pay plus benefits that private sectors employees could only dream of receiving. They also typically don't have many positions available and many of their offices are not in prime locations.

The USDOT routinely pays their staff way above what any private civil engineering firm would pay (this is all levels of staff even in the administrative assistant positions about 10-20% above private sector).

Positions at the USGS also pay more than private sector geological positions would pay (most of the private sector is in mining, oil, and gas areas).

Want to talk about IT positions? They surpass private industry too.

On top of all this, you'll never get laid off and since performance is never measured you can easily slack off. In college, the motto I learned was "If you don't have any ambition and you just want a paycheck for your degree, get a government job." I've found a few government workers that break this motto, but they are hard to find.

Also, many of these areas I've mentioned could easily be done by private jobs with massive savings to tax payers.

At 8:40 PM, August 10, 2010, Anonymous Anonymous said...

Actually, I was just pointing out that it's a mistake to draw ominous conclusions from the difference between public salaries and salaries in general. That has nothing to do with how many public employees is the right number. (That obviously depends on what they're supposed to be doing - more nitpicking MMS engineers and fewer secret wiretappers, please.)

As far as pay differences with comparable private-sector jobs, I prefer to see some actual evidence before I rant (definitively!) about who is a loser and who isn't. You've got your bitter anecdotes. I've got the counterexample of, say, my own dad.

And seriously, how many white-collar workers are constantly engaged in constant perform-or-be-fired-on-a-whim gladitorial combat? Firms are, sure, and thus employees are indirectly - but indirectly enough to allow for plenty of slacking off. There's certainly an argument for privatizing/outsourcing some government functions (and it's not like governments aren't doing a lot of this), but trying to base it on some supposed character differences is just weak.

Finally, did you ever think that constant disparagement of public servants as individuals and government in general might be part of the problem with government performance? Maybe some of the "ambitious" people who were selling us mortgage-backed securities could have prevented 9/11, prepared for Katrina, etc. But you'd have to offer them good salaries and stop calling them losers...


At 7:52 AM, August 11, 2010, Anonymous kjb434 said...

As for evidence, just searching available jobs would give an indications. Also, job salary reports produced by several firms routinely document this.

A proper HR team in a company that's in a competitive field gets these figures to ensure their salaries are competitive in the private sector.

As for disparaging government workers, they earned that on their own.

At 10:22 AM, August 11, 2010, Anonymous Anonymous said...

And I forgot to mention of course that everyone knows the truly ambitious Civil Engineering students graduate and then make sure they go do anything except be actual civil engineers...


At 1:40 PM, August 11, 2010, Anonymous kjb434 said...

Check this USA Today Article from yesterday. It goes over how many federal government jobs get paid double the private sector counterpart. It does include benefits, but in reality, your benefits is a part of your pay. It's not a freebie given to you by your employer.


At 2:18 PM, August 11, 2010, Blogger Tory Gattis said...

Thanks for the link, kjb. Very relevant article. I've added a link inside the original post both here and at the Chronicle.

At 4:36 PM, August 11, 2010, Anonymous Anonymous said...

So it's not just government employees in general, but "federal civil servants" in particular who make much more than private workers at large? Again, why wouldn't you expect something like that given the large differences between the two groups?

Notice, buried way beneath the scary headline, this caveat:

"USA TODAY reported in March that the federal government pays an average of 20% more than private firms for comparable occupations. The analysis did not consider differences in experience and education."

Tory, both of your links cite the same source, and do so misleadingly, at least re: their headlines. Using the "2x" figure as a talking point is dishonest, and you should qualify it or remove it. And now that I think about it, "The federal government continues to consume ever-greater portions of the economy" sounds like rhetoric that isn't very well supported either, especially since you seem to be referring specifically to spending on bureaucrats and not other stuff like wars or unemployment benefits.

I realize your points are just an aside meant to poke a hole in a rival city's stats, but they draw (hopefully unintentionally) from some really annoying talk-radio tropes.


At 9:51 PM, August 11, 2010, Anonymous Anonymous said...

Interesting stats, but that article was horrible. That is all.

At 9:48 AM, August 12, 2010, Anonymous kjb434 said...

"The federal government continues to consume ever-greater portions of the economy"

It's hardly rhetoric when it's true. Every dollar the government taxes or just plain prints up and spends is a dollar lost on the economy.


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