New York City Public Employee Salary Data Offers Clues About What DOGE Might Study Next

DOLGE = Department of Local Government Efficiency

Many major cities release annual data listing what each public employee earns each year in base salary and overtime. In this Substack, I will teach you some facts about New York City’s payroll in 2023 and the State’s public transit system in 2022. My data source for the 2023 data can be found here. These facts are relevant for considering whether local governments are over-spending as they provide local public goods such as education, police and fire protection.

I took the worker-level data and formed the following earnings distribution broken out by major departments.

Let’s read from left to right. In 2023, in New York City, 338,550 people worked full-time for the City Government! 10% of these workers earned less than $45,212, and 10% earned more than $136,178. The median worker in the NYC government earned $86,280. Why is this pay so high? Perhaps these workers are highly productive? Perhaps the public sector unions are powerful? We know that home prices are high in New York City. Such high prices are due to both demand and supply factors. Building housing in the NYC area is difficult because of all the land use regulations.

An urban-level version of Elon Musk’s committee might ask, “Why are 338,550 people employed? What public services would be lost if this workforce shrank by 10%? What do these people do all day long?” In the following columns of the matrix, I report the same data broken out by the Department of Government. You will see that the Median worker in the Housing Authority is paid roughly 40% less than what those in the Fire and the Police Departments are paid. Why is this the case? On the lower right side of the table, you see that 54,666 people worked in the NYC Police Department in 2023. What do all of these people do all day long? Who decided that all of them were necessary?

Finally, in the right column of the Table, I report data from 2022 for the Metropolitan Transportation Authority (MTA). This is a State-Level Agency in charge of the NYC buses and subways. 77,856 people work for this Agency, and 25% of them earn more than $92,000 per year.

To provide extra details about this large public sector, I focus on data for the top 25 job titles in the Metropolitan Transportation Authority in the following table. For every job title listed in the worker-level database, I count how many workers work in that job title category. For example, if I were in the data set, I would be coded as an “Economics Professor.” As you will see below, the two top job categories in the MTA in New York City in 2022 were “Bus Operator” and “Train Operator.” 6404 people were working in this first category. Their average total $ pay was $83,255. Now look at the unintuitive column (Overtime/Base salary). Here, I am calculating the ratio of their Overtime Pay divided by their Base Salary. If this ratio is larger, then this indicates that the average worker in this Job Category received more overtime pay.

What would DOGE conclude from these numbers? Is there a significant amount of inefficiency in this major public service category? Is there too much generous overtime pay being offered?

While the data provide fascinating details about the costs of employing these workers, we learn little about their benefits to the public transit system. In Econ 101, we teach our students that a for-profit firm will create a job if the marginal revenue the worker produces is greater than the pay the worker is paid. In the case of public sector workers, what is the equivalent of “marginal revenue”? What services are these workers providing? In this age of information technology, could capital be deployed to replace some of these workers? What would be the cost savings from engaging in this input substitution? The numbers reported in these datasets do not include the pension and health care benefits promised to these workers. The annual cost to the local taxpayers is likely to be 33% higher than the numbers reported here when such benefits are also factored in.

A benefit of the rise of DOGE is that it shines a spotlight on what goods and services the Federal, State, and local governments provide for us at what price and quality level. Consumers are more likely to make good choices (at the ballot box) if they have a better understanding of what they are buying.

I claim that the Federal, State, and Local governments will respond to this sunshine by devoting more effort to achieving a greater “bang per buck” on the services provided. Greater economic efficiency will emerge from this accountability push.