Fun with numbers
Friday, Jan 26, 2018 - Posted by Rich Miller
* Mark Glennon in Crain’s…
Mayors and village managers across Illinois often complain bitterly that they have little control over the cost of the governments they run. They’re mostly right, and it’s thanks to unfunded mandates imposed by the state. Those mandates include workers’ compensation, binding arbitration for labor contracts and pension coverage.
This is about another one of those unfunded mandates—prevailing wage requirements for public works—and the numbers are scandalous.
The Illinois Department of Labor publishes, county by county, the hourly wages local governments must pay contractors and subcontractors. It’s important to note, and often overlooked, that 1) wages are set based on compensation paid on other public works, not private-sector compensation; 2) municipalities have to pay the cash equivalent of the additional compensation, including pension benefits, paid on other public works; and 3) all of that must be calculated on a full-time-equivalent basis to understand it properly.
The all-in result: The average total full-time-equivalent compensation, including benefits, for all job categories over all counties is $119,000.
* Jim Sweeney of Local 150 claims in a rebuttal that Glennon’s $119K figure is baloney because it assumes all construction workers are employed throughout the year…
The average salaries that Glennon suggests are preposterous, as construction workers do not earn “full-time equivalent” wages. Most construction is seasonal work, influenced as much by weather as by municipal budgets. According to the 2016 Economic Census of Construction, the average public works construction worker in Illinois clocked an average of 1,786 hours in a year, and earned an average base wage of $60,000. Put in perspective, that’s roughly the same as the statewide median household income figure Mr. Glennon cites in his column—a figure that is conveniently distorted downward by its inclusion of people who are either not working or work part time.
By contrast, most other occupations in Illinois are easily working the full-time equivalent of 2,080 hours per year.
Weather is a factor, but so is the availability of jobs. Very often, even with perfect weather, the jobs just aren’t there.
* Glennon penned a rebuttal to Sweeney on his own blog…
Annualizing it is just a way to illustrate what people are making on a basis readers recognize.
* Back to Glennon’s Crain’s column…
Vermilion County is an illustration: The average, total full-time-equivalent yearly compensation for a prevailing-wage worker in cities and towns in that central Illinois county is over $100,000.
Does anybody really think that annual compensation over $100,000 is “prevailing” in Vermilion County? Median household income for the county is only $43,600. Statewide, the median is just $59,000.
Comparing construction worker wages to all wages seems odd. Should we do that for Medicaid doctors, too?
- My New Handle - Friday, Jan 26, 18 @ 2:06 pm:
Fulltime equivalencies do not reflect per-worker earnings. Whereas one person at one job may make $50,000 in 12 months, it may take 2 or 3 workers on a parttime basis to reach that level. Fulltime equivalency really is a false equivalency in this report.
- Pritzker Plumbers Inc. - Friday, Jan 26, 18 @ 2:06 pm:
*Mark Glennon
- Rich Miller - Friday, Jan 26, 18 @ 2:09 pm:
===*Mark ===
lol
Yeah. I fixed it. Oops.
- morningstar - Friday, Jan 26, 18 @ 2:13 pm:
From the terminology used, it is not clear to me whether or not Mr. Glennon is mixing apples with the oranges. Comparing “median household income” with “average compensation, including benefits” does not seem to be a straightforward comparison of equivalent measures.
- Demoralized - Friday, Jan 26, 18 @ 2:14 pm:
I’ve never understood this obsession with median income when it is used as an argument against a particular salary of an individual or industry. It’s as if those making those comparisons think anything exceeding that is a bad thing.
- Back to the Mountains - Friday, Jan 26, 18 @ 2:14 pm:
Annualizing may provide a recognizable basis, but if that basis has no grounding in fact, it amounts to lying in a format that readers understand.
- Where's the truth? - Friday, Jan 26, 18 @ 2:16 pm:
“even with perfect weather, the jobs just aren’t there” — Anyone who has ever tried to get a building permit or a zoning matter approved in the City of Chicago can attest to the fact that the process is a job-killer. Construction workers could be working full time if the city Aldermen and Alderwomen got out of the way and the city workers sped up the process.
- City Zen - Friday, Jan 26, 18 @ 2:17 pm:
“…an average of 1,786 hours in a year, and earned an average base wage of $60,000. Put in perspective, that’s roughly the same as the statewide median household income…”
With 8 weeks paid vacation?
- Demoralized - Friday, Jan 26, 18 @ 2:18 pm:
==With 8 weeks paid vacation?==
Who gets 8 weeks paid vacation in this scenario?
- Anonymous - Friday, Jan 26, 18 @ 2:25 pm:
Conclusions first, then marshal the necessary “facts”
- SW - Friday, Jan 26, 18 @ 2:28 pm:
You also have to add in unemployment insurance payments to get a true reading of compensation.
- Last Bull Moose - Friday, Jan 26, 18 @ 2:29 pm:
Does it sound better if it is making $60,000 with 8 weeks less work?
- Anon324 - Friday, Jan 26, 18 @ 2:32 pm:
=”Annualizing it is just a way to illustrate what people are making on a basis readers recognize.”=
Translated: I know my stats are misleading at best, but I used them anyway because they will lead to the conclusion I want the reader to reach.
- PGMJR - Friday, Jan 26, 18 @ 2:37 pm:
Anecdotal, I know, but, my 150 buddy worked about 1,800 hours during his seasonal employment. However, everything over 8 hours is OT. 14 hour days, in July and at Journeyperson wages, can have an impact on the average.
- wordslinger - Friday, Jan 26, 18 @ 2:37 pm:
–Annualizing it is just a way to illustrate what people are making on a basis readers recognize.–
This reader recognizes it as a way of being disingenuous.
Maybe Glennon wants to put on a harness and catch some beams a few stories up and tell us how much that is worth.
- City Zen - Friday, Jan 26, 18 @ 2:38 pm:
==Who gets 8 weeks paid vacation in this scenario?==
Example: Accountant making the $60,000 median income listed here with a generous 4 weeks of paid leave translates to 1,920 hours worked for that $60,000 salary. The difference between him and the average public works construction worker in Illinois clocking 1,786 hours/year is about 4 weeks less. Hence 8 weeks.
- Rich Miller - Friday, Jan 26, 18 @ 2:50 pm:
City Zen, it’s time for a nap.
- Da Big Bad Wolf - Friday, Jan 26, 18 @ 2:51 pm:
Mark Glennon, that’s the Wirepoints guy, right?
- City Zen - Friday, Jan 26, 18 @ 2:51 pm:
==Does it sound better if it is making $60,000 with 8 weeks less work?==
Would be an great recruitment tool for Local 150, if it didn’t counter their core messaging.
- Stand Tall - Friday, Jan 26, 18 @ 2:55 pm:
1786 hours at Mr. Glennons full compensation rate comes to over $102,000 in total compensation. Do people at the median state level get $42,000 in benefit contributions as well as unemployment compensation? Most people I know in the trades look forward to the close of construction season. many of these workers also work a lot of overtime during the construction season as well. Personnel working for municipalities outside of the Chicago area with these same skills don’t make that much working year round doing construction work.
- Honeybear - Friday, Jan 26, 18 @ 3:00 pm:
Perfidious use of statistics to justify the immoral lowering of wages for corporate profit.
- Robert the 1st - Friday, Jan 26, 18 @ 3:03 pm:
=lowering of wages for corporate profit.=
Corporate profit? This is about mayors wanting more control of their public budgets.
- Demoralized - Friday, Jan 26, 18 @ 3:08 pm:
City:
Do you think trades get 8 weeks paid vacation? I’m confused as to exactly what point you think you are trying to make.
- City Zen - Friday, Jan 26, 18 @ 3:08 pm:
==This is about mayors wanting more control of their public budgets.==
Less money to fund health clinics, senior services, youth programs, etc. For some, fungibility is more art than science.
- Demoralized - Friday, Jan 26, 18 @ 3:09 pm:
==This is about mayors wanting more control==
This is also about people complaining what other people make. If the argument is using median income then one of the points trying to be made is that somehow exceeding that income is, in his words, “scandalous.”
- Robert the 1st - Friday, Jan 26, 18 @ 3:11 pm:
Demoralized- his point is the claim they make about the median salary of full time work is kind of moot considering they don’t work the hours of a full time position.
- City Zen - Friday, Jan 26, 18 @ 3:12 pm:
Demoralized - I’m following Rich’s advice and taking a nap on the math of the matter.
- RNUG - Friday, Jan 26, 18 @ 3:17 pm:
== Jim Sweeney of Local 150 claims in a rebuttal that Glennon’s $119K figure is baloney because it assumes all construction workers are employed throughout the year… ==
Having grown up with Dad working construction, I have to agree with Jim Sweeny. It was a rare year that he worked 12 months; 7 or 8 was typical.
- RNUG - Friday, Jan 26, 18 @ 3:20 pm:
== Maybe Glennon wants to put on a harness and catch some beams a few stories up and tell us how much that is worth. ==
Having walked red iron at one point in my life, those ironworkers earn every buck they are paid.
- South Suburban Problems - Friday, Jan 26, 18 @ 3:28 pm:
Commercial real estate is being taxed into dust in some of these suburbs. Lots of retailers are closing down.
- Rich Miller - Friday, Jan 26, 18 @ 3:44 pm:
===Lots of retailers are closing down===
That’s a national trend. It’s in all the papers.
- Anon324 - Friday, Jan 26, 18 @ 3:55 pm:
==That’s a national trend. It’s in all the papers.==
Indeed. Wal-Mart et al ate up business for a lot of mom & pop stores. Now e-commerce is drinking brick and mortar’s milkshake.
- Chicagonk - Friday, Jan 26, 18 @ 4:07 pm:
I don’t favor repealing prevailing wage laws, but I do think that the state could be more transparent in how the wages are set.
- Ole' Nelson - Friday, Jan 26, 18 @ 4:13 pm:
Is bashing the wages of union construction workers what Glennon does to unwind when he is not actively trying to convince the voters of Illinois that they must weasel out of their pension obligations? Maybe for his next trick he can explain to us how classroom teachers are overpaid for the “easy” 9 month work that they do.