Wage Series Part 10: Does Size Matter?

By Jim Cline and Kate Kremer

size mattersEarlier in the wage series we discussed State wage rankings for the various public safety classifications.  In the next part of the wage series we run our series of articles on factors that might influence or explain, at least in part, those wage rankings, with updated 2015 wage rankings.

In this article we discuss wage as it relates to population but for the detailed data, you’ll want to explore our Premium Website.  If you’re not currently a Premium Website subscriber you can review our services Cline and Casillas Premium Information Services and contact Donna Steinmetz at Cline and Casillas and she’ll explain how you can become one. 

In this article we discussed whether size — as measured by population — matters as to wage rankings and to what extent.  In the next two articles we will discuss the influence of the two other variables most commonly used to predict comparability — assessed valuation and geographic location.

Along with the wage ranking data that we discussed previously in this series, we have also added to our premium website detailed charts 2015 Demographic Rankings  which show the relative wage rank for all the surveyed public safety classifications each of the various cities and counties up against their wage rank in population and assessed valuation.  In this article we post a scaled-down version of those charts for two of the classifications — City Police and County Deputy Sheriffs.  In these charts we show the relative current wage rank for these bargaining units (the actual wage is posted on the premium website).

A review of this data indicates that size does, in fact, matter.  The largest city, Seattle, predictably ranks number one and the smallest city of the 131 municipalities with police departments — Westport — ranks 120th.  A review of the city wage charts — measuring the wage at the 25 year BA level — shows a strong correlation between population and wage ranking.

What is actually perhaps more noteworthy about the chart, in some respect, is the extent to which population does not always predict wage ranking.  The chart also reveals a number of police departments that are paid either high or low relative to their population.

Obviously, there are a number of other factors besides just population that explain one’s wage.  Two of the factors that we’ll discuss later in the series, as indicated, are assessed valuation and location.  You should also bear in mind that these charts only provide one snapshot view of the labor contract – the 25 year wage inclusive of longevity and education premiums.  It does not account for other wage related premiums that might be contained in the contract.  This number also does not take into account that there may be other important elements of the contract that bargaining units gave up wages to retain — for example a good health insurance plan or reduced health insurance premium contributions.  There may also be current economic and fiscal conditions in each of the cities that explain their wage status.  So this chart, while interesting, certainly does not tell the whole story.

Nonetheless, the data does indicate some noteworthy results.  If size explained all of the wage rankings, then you would not expect to see Spokane — the 2nd largest city in the state — while moving up from a low rank of 32nd two years ago, is still only ranked 22nd.   And Vancouver — the 4th largest city — ranked 33rd two years ago, now ranked 43rd.  A review of the data would suggest — and our article later in the series on regional location will explain — that geographic location has a powerful relationship to wage position.  Jurisdictions more proximate to Seattle and the Central Puget Sound labor market are, typically, paid a significantly higher rate due to that location within the labor market.

So, typically Eastern Washington jurisdictions are paid measurably less than Western Washington jurisdictions.  And wages in King County are typically higher than wages and the rest of the State, as are wages in Pierce and Snohomish County.  And yet, this population based wage chart reveals that this is not uniformly the case.  For example, Kent as the 6th largest city is ranked 30th, and Lakewood as the 17th largest city is ranked 47th.  On the other hand, Bothell as the 22th largest city is ranked 3rd.  And small but affluent Mercer Island is the 36th largest city but ranks 2nd.  The top 10 Washington cities ranked by 2014 population are listed in the table below:

Population Rank 2014 Population Cities 25 Year BA Police 2015 Wage Rank
1 640,500 Seattle 1
2 212,300 Spokane 22
3 200,900 Tacoma 12
4 167,400 Vancouver 43
5 134,400 Bellevue 10
6 121,400 Kent 30
7 104,900 Everett 21
8 97,130 Renton 5
9 93,080 Yakima 23
10 90,150 Federal Way 17

A similar review of Deputy Sheriff wage data shows a strong correlation between size and wages along with some other unexpected results.  King and Pierce County rank 1 and 2, corresponding to their population rank, but 3rd largest Snohomish County drops to 5th in wages, 4th largest Spokane drops to 11th .  5th largest Clark drops to 21st but this is in part because they have a contract that has been unsettled for years.   Tiny San Juan County, the 32nd in size of the 39 counties, ranks 4th.

Here’s the Top 10 County chart for deputy sheriff population/wage ranking for counties:

Population Rank 2014 Population Counties 25 BA Deputy 2015 Wage Rank
1 2017250 King County 1
2 821300 Pierce County 2
3 741000 Snohomish County 5
4 484500 Spokane County 11
5 442800 Clark County 21
6 264000 Thurston County 3
7 255900 Kitsap County 12
8 248800 Yakima County 6
9 207600 Whatcom County 8
10 186500 Benton County 7

So like Cities, Counties may “underperform” or “overperform” relative to their size.  Other variables like tax base and location often explain those results.  And, as we indicated above, this wage ranking reports only one piece of the total compensation covered by the CBA (albeit an important one.)  In the next issue we’ll discuss how assessed valuation correlates to wages and after that we’ll discuss geographic location. We’ll learn that those factors do also strongly influence wage rankings.  But you’ll eventually conclude that size, tax base and geography alone don’t explain those rankings and that other factors, perhaps local political and fiscal conditions or perhaps the relative success of bargaining units to negotiate for wages, also influence their rank.