More on those high-paid public-sector workers

William Glaberson reports that judges in New York feel they’re underpaid:

New York judges have not had a raise in 12 years, making the state one of the more extreme examples of a growing pay gap nationally between judges and other professionals, including partners at top law firms, who can earn 10 times the salary of the judge before whom they are arguing a case.

Now, for the first time in memory, judges are leaving the bench in relatively large numbers—not to retire, but to return to being practicing lawyers. Turnover in New York has increased rapidly in the last few years: nearly 1 in 10 judges are now leaving annually, a new study shows.

Recently we have seem some outrage regarding overpaid professors and corporate executives, but I think judges are a better example for discussion. Profs are mostly liberal Democrats and execs tend to be conservative Republicans, but judges are appointed by both parties, which removes the biggest political slant that readers will bring to the story.

OK, back to the New York state judges. Glaberson’s news article provides some salary details:

In New York State, at least a dozen have resigned and explicitly cited the pay. The latest is James M. McGuire, a judge on the intermediate state appeals court in Manhattan, who last week resigned his position at the white marble courthouse on Madison Avenue. His judicial salary was $144,000. He stepped down to be a partner at a law firm, Dechert LLP, where average partner pay is $1.4 million. . . . “I tormented myself for the longest period of time about whether I should go, because I love the work,” he said. “And then I realized, ‘I’ve got no choice. The only responsible thing for my family is to go.’ ” Justice McGuire, 57, has two children, ages 5 and 3.

Hey, let’s be honest here

Taking a new job that pays ten times as much—that seems reasonable to me. If someone offered me a job at $1.4 million a year, I’d consider it too! I don’t really need the $1.4 million but it would be hard to turn down that sort of money. If I was working at a job with no pay increases for 12 years, and I had the prospect of getting 10 times as much elsewhere, I’d probably jump at the chance.

But for McGuire to say this was “the only responsible thing for my family . . .”? C’mon. That judicial salary of $144K is roughly twice the median income of a family of four in America (link from here). Salaries and cost of living are higher in New York but not by that much.

But then I was wondering, if McGuire has two children, what does his wife do? Nowadays it’s common for the mothers of young children to work too. Or maybe he’s divorced and has to support the 2 kids plus alimony? I don’t know his personal situation. But I did some googling and found this news article, which says that McGuire’s wife is a prosecutor in the Manhattan U.S. Attorney’s Office.

I don’t know how much they pay any particular Assistant U.S. Attorney, but if she’s been at the job for several years, I’m guessing that it’s close to $100K if not more.

As noted above, I have no problem at all with a judge quitting for the big bucks. But does he really need to bring his family in to this? They’re doing just fine. For him to say “I really had no choice financially” . . . well, that’s a strange definition of “no choice,” given that he and his wife make more than 3 times as much as the average American family in their situation.

Glaberson’s got another juicy quote:

Emily Jane Goodman, a State Supreme Court justice in Manhattan, said the practical effect of her stalled pay was that she had to sell a summer home in the Hamptons and was having trouble paying for increasing fees on her two-bedroom apartment in the city.

“Here I am,” Justice Goodman said, “in a position where I’m working to achieve justice for other people and I don’t feel that I’m experiencing justice.”

Good point. If I had a summer home in the Hamptons, I wouldn’t want to sell it either!

21 Responses to More on those high-paid public-sector workers

  1. Luis July 8, 2011 at 11:23 am #

    I agree that it is a little weird, but this is all about what your peers make. Judges don’t socialize with median Americans, they socialize with other lawyers. And most of them want to socialize not just with lawyers, but with elite lawyers. And in that context $144,000 isn’t just 1/10th the pay of a partner, it is less than what Dechert pays someone who just passed the bar last week. By the standards of this guy’s peers, he’s literally worse off than the average 25 year old.

    This isn’t to justify the thing; America would be much better off if our elites realized how disconnected they were from median America. But it is hard to blame any specific member of the elite for the problem when it is fairly natural to want to socialize with- and measure yourself against- your peer group; and when peer groups are increasingly segregated by education and economics.

  2. Andrew Gelman July 8, 2011 at 11:33 am #

    Luis:

    I think that comparisons with peers is part of it. But another big part is not-getting-a-raise-for-12-years. If these judges’ salaries were suddenly raised to $200K, it would still be a lot less than $1.4 million but they’d probably be ok with it.

    In any case, I thought the line about “the only responsible thing for my family” was a bit tacky.

  3. Esteban July 8, 2011 at 2:17 pm #

    Andrew, three things:

    At 57, McGuire can expect to work about 10 more years and live 15 or 20 beyond that. Even if he retires to Fort Lauderdale instead of Boca, he needs to put hay in the barn. If his children are lucky enough to attend (let’s say) Columbia, he needs to be stacking nearly $3000 every month–a quarter of his gross income–in a 529 plan. Now.

    Secondly, I’m sure you are a better statistician than I am, but you might take another look at the living costs in New York. A quick search tells me that the composite costs of living in New York are about double what they are in, say, Denver or Charlotte. And housing is about four times as expensive. So describing 144k as “roughly twice the median” is misleading at best. So he’s making the median, really. It’s not totally outrageous for a 57-year-old judge to think he should be doing better.

    Finally, you were wondering what his wife did. Perhaps she provides most of the labor required to raise their children, which is not recognized by the market (i.e. it’s unpaid). Or perhaps she does that AND works outside the home, as you discovered. Working couples with children split three jobs between them, not two.

    If you are correct, then she has a pretty good job and they are doing alright. A little better than the Joneses. The 10x multiple at his new job provides some drama, but he hardly deserves the finger-wagging. Downtown the judge’s salary barely amounts to an impulse buy.

  4. Andrew Gelman July 8, 2011 at 2:27 pm #

    Esteban:

    I think it’s silly to say that you need more than $250K/year for the children. If you want a million and a half dollars a year, go for it. As noted above, I’d find it difficult to turn down such an offer myself. But then just say you want the money (or the house in the Hamptons). I find it unseemly for the family to be used as an excuse.

    In saying this, I’m not saying that judges’ salaries shouldn’t be raised. I’d just like a bit of honesty here. Saying that you feel you deserve more money and that you deserve a raise–that’s fine with me. Saying that taking the new job is “the only responsible thing for my family”–that’s just silly, as well as being insulting to all the families out there making less than 250K/year.

  5. Esteban July 8, 2011 at 3:36 pm #

    Fair enough. But if a bit of honesty is good, then some additional bits can’t hurt. I think dismissing the cost differential substantially exaggerates the perceived gap above the median income. I also think the judge is facing the downslope of a career that maxed out near the declining median. He has a fat tail on his obligation curve, and his real income has declined for over a decade. I make a lot less than he & his wife do, but still I think he’s right to be concerned.

  6. Andrew Gelman July 8, 2011 at 3:43 pm #

    Yes, I agree that his life will probably be a lot more comfortable on 1.5M than 250K. There’s nothing wrong with wanting a comfortable lifestyle; I’m not saying that the guy is motivated by pure greed–or that there’s anything wrong with being annoyed at not getting a raise for 12 years. I just think his quote was a bit over the top.

  7. Erik July 9, 2011 at 2:25 am #

    I think you’re missing the entire point of the statement. When he says “The only responsible thing for my family is to go,” he’s not saying that he can’t provide on his current salary. He’s making the opposite point – turning down such an offer would be irresponsible, it would mean such a huge difference in security for the family. In only a few years, he could have his retirement and his kids’ college funds all fully paid for in a way that could never happen as a judge. His work load will one he wants less (and probably heavier), but his family will be far more secure because of it.

    Now, should being a partner at a law firm pay that well? In any utilitarian sense no, and I think it’s a symptom of a larger problem that it does. But since it does, then he’s making a very rational decision that benefits his family more than him.

  8. Andrew Gelman July 9, 2011 at 9:00 am #

    Erik:

    I’m not saying it’s an irrational decision, I’d just prefer to avoid the rhetoric about being irresponsible to one’s family. $250K/year is just fine. If you want more money than that, go for it, but I don’t think it’s irresponsible to your family to live at such a level.

    In that sense, I prefer the other judge with her (unintentionally, I assume) funny lament about having to sell her house in the Hamptons. At least she’s being open about what it’s costing her.

  9. David Littleboy July 9, 2011 at 10:47 am #

    Hmm. Count me in on seeing the comment as reasonable. 57 is a bad age to have two young children; I’m 59, without children, and retiring is looking both very attractive and not all that unreasonable, but I have friends who are 65 with college age kids. Even worse, one doesn’t know if one’s health is going to hold up. So this guy feeling the need to grab the big bucks for a few years is quite understandable, since those kids will need support for at least another 15 years, at which point he’ll be 72 or so and they’re still not through college.

  10. Luis July 9, 2011 at 4:58 pm #

    Andrew: Agreed that the comment was poorly phrased, though I think the underlying sentiment- “how can I responsibly pass up the chance to provide long-term security for my family?” is pretty reasonable, given our lack of social safety net, health care, decent free education, etc. On the grand scale of well-off people putting foot in mouth, this is about .0001 of a Henderson.

  11. Andrew Gelman July 9, 2011 at 10:07 pm #

    David, Luis:

    There’s nothing objectionable about wanting more money or even wanting to keep your second home in the Hamptons. I just don’t think the dude is being honest with himself by saying it’s “the only responsible thing for my family.”

    Call me old-fashioned, but I think it’s perfectly responsible for a couple with two kids to get by on $250K/year.

  12. David Littleboy July 10, 2011 at 8:22 pm #

    “I think it’s perfectly responsible for a couple with two kids to get by on $250K/year.”

    The problem is that you don’t know that you will be getting that $250K/year every year for the next 15 years. Unexpected things happen. Retinas get detached, cancer, car accidents; especially if you are 57. Really. I felt great at 57. Retina detached (and fixed) at 58. (And then the local nuclear plant exploded.) The world looks quite different (both literally and figuratively) at 59. It’d be a very different story if the bloke in question were 37 and living in Boston, not NYC.

  13. Talleyrand July 10, 2011 at 9:43 pm #

    Andrew is patiently making the same good point over and over again, but these commenters are being bizarre. The judge makes twice the median salary for a family of four and his wife makes another 100 grand. This is more than enough to provide an above average lifestyle for themselves and their children, even taking college into account. Framing this as if he had “no choice” is the judge trying to make his decision look like he is protecting his family when this is simply not true. He’s doing it in order to provide himself and his family with an even-more-above-average lifestyle. Like Andrew says, I’d almost certainly do the same thing, but I would be honest and say that I want the big bucks. I would not try and pretend that I am doing something laudatory by trying to frame it as a moral choice.

  14. Aaron July 11, 2011 at 12:17 am #

    David is spouting nonsense. Health problems may come up, but insurance isn’t a problem for NY state judges.
    “New York judges are eligible for health insurance and other benefits in addition to their base salaries, most other State employees receive comparable benefits. By law, all full-time New York State employees are eligible to receive health insurance benefits, with the State paying 90 percent of the premium for employee coverage and 75 percent of the premium for dependent coverage.”
    http://www.courts.state.ny.us/judges/070908papers.pdf

    As state employees, they get great insurance. Check out the link below and read all about all the nice options they have. And don’t forget, the state pays 90% of the premium.
    http://www.cs.state.ny.us/employees/state/

    The judges, and in particular Mr. McGuire’s family, clearly make good money and get a great insurance package and that’s without looking into the insurance packages of federal prosecutors, like McGuire’s wife.

  15. Erik July 11, 2011 at 2:20 am #

    Talleyrand, where did “laudatory” come from? The point is not that McGuire is looking for praise – the point is that he’s taking the decision that provides more safety for his family.

    David has said clearly what I’d been groping for. The point that has been missed multiple times is how close McGuire is to retirement age, with very young children. Saying that “it’s perfectly responsible for a couple with two kids to get by on $250K/year,” assumes that he’ll be working for that entire time. He’s only 8 years from nominal retirement age, and 18-20 years from seeing his youngest graduate college – and college will be 20 years more expensive than it already is. By making the move, he can pretty much ensure financial safety for his children, his wife, and for his retirement, and that might not be possible on the lower salary in the time he has left. And that time may be even shorter if anything untoward happens.

    I would consider that perspective as being responsible to your family over your personal preference, and that’s the point of the quote that’s being objected to. I feel it’s not objectionable, it’s accurately explanatory.

  16. David July 11, 2011 at 7:58 pm #

    I guess I’d take Erik’s side of this and even go a little farther. One has certain commitments to one’s family. One can make $140,000 and provide a certain level of material comfort or make $1.4 million and provide more — vacations, private schools, larger house, etc. I can certainly see why one might feel that he owes it to his family to provide more if he is able to, rather than choose the selfish option of pleasing himself with a presumably more psychically rewarding job. Isn’t he simply putting the interests of his family ahead of his own? You might disagree, but I don’t see why you would take the judge at anything other than his word.

  17. Andrew Gelman July 11, 2011 at 10:08 pm #

    David:

    Assuming he wasn’t misquoted, McGuire said, “I’ve got no choice. The only responsible thing for my family is to go.” I think that’s just silly. “No choice”? The “only responsible thing”? On the contrary, I think it’s completely responsible to get by on a mere $250K/year. There are lots of Americans who support their families on $50K/year. I think that’s responsible too. As noted above, I’m not saying there’s anything wrong with McGuire’s decision–it’s a decision I might well make myself, were I ever put in such a position–but I am no fan of the sort of rhetoric that says this is “the only responsible thing,” rhetoric that is, to me, insulting to all the people who get by with much less than $250K.

  18. David Littleboy July 13, 2011 at 2:23 am #

    “This is more than enough to provide an above average lifestyle for themselves and their children, even taking college into account.”

    Sure, if he were 37 and saying that, you’d be right. But that’s not what he’s talking about. His kids won’t be starting college until he’s over 70. He needs to plan on being able to comfortably cough up well over US$100,000 in after-tax cash every year for four years after he’s 70. (And it’s not about health insurance, it’s about being able to work at all.) Being able to work at all is not guaranteed if one is over 60.

  19. David Littleboy July 13, 2011 at 2:35 am #

    By the way, normally I don’t find myself sympathizing with the filthy rich. There was a discussion on some of the other economics blogs a while ago about a professor from Chicago who didn’t think he was rich and didn’t think it was reasonable to tax his $400,000 or so income any more; he wouldn’t be able to pay is house cleaners and gardeners. Not a sympathetic bloke in the slightest. But the thought of having young kids who will still need major support when one turns 70 is quite horrifying.

  20. Christopher Wing July 15, 2011 at 3:05 am #

    Funny – some of us actually paid for our own college. We… what is the word… WORKED.

    I can’t imagine anyone who makes $1.5 million per year is contributing anything worthwhile to society.

  21. A July 24, 2011 at 2:28 am #

    Mr. Wing said, “Funny – some of us actually paid for our own college. We… what is the word… WORKED.” That must have been some time ago. Where I am in California, the in-state (non-)tuition fee comes to ~$9,000 + 12,000 for room and board at a State University (UC is more, and don’t even think of a private school [~50+k$]). Perhaps if you work at $10/hour for 52 weeks you earn as much (52*40*10 = 20,800.-). But can you save as much when you work? So perhaps you’d have to work 8 years to earn your 4 year’s worth of tuition. But in 8 years, tuition will have increased to more than what you saved.– And if your parents make more than about ~80,000/year, the only ‘aid’ offered will be an unsubsidized loan at 8+%. So one can understand that those with children headed for college, a mortgage … feel poorer, even if they do so much better than the median, certainly poorer than their parents felt at this stage of life. But A.G. is right, at $250k/year I’d think even a family with children headed for private school has no reason to complain.