Monday, April 18, 2011

Douthat's "Family of Four"

Ross Douthat asserts that the average American family of four has an income of $94,000. The blogosphere climbs all over him--the accepted figure is actually $75,700.

Douthat backs down, sort of
He says he was looking at the CBO tables which include income from employer provided health care and employer's share of payroll taxes.His tone is apologetic, but I am actually willing to cut him a bit of slack on this one. It has long struck me that one problem in discussing these issues with my colleagues (senior staff at a public university) is that they genuinely do not know how well off they are. Pensions and (mostly) health care are pretty much opaque to them; they can't get their mind round the idea that they are part of the payroll cost. A more realistic understanding of these issues would always include these numbers; for one thing, it would help us to compare workers who do get good pension and health care protection with those who do not.

For me, the most interesting thing about this gaffe is that Douthat didn't see it coming. This is a guy who is supposed to instruct us on public policy and he didn't realize that he was off by a factor of near a third from the standard number? Hello?   

Anecdote:  Years ago I went off on a visit to the University of Texas.  For some long-forgotten reason, we agreed that Texas would not hire me directly but would take an assignment of my contract from the University of California.  When the dean got a look at his contract cost, he nearly had a heart attack; the total number (i.e., including all benefits) was about 30 percent above my nominal salary.  He was a gent, he kept his deal--but it was a vivid reminder to me of what somebody was actually willing to pay me.  And a pretty good reminder that employment at the University of Texas would have been not that-all alluring.

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