One measure of how expensive the San Francisco Bay Area has become is, of course, the million-dollar starter home — the one-story house with a small garden that would go for less than $400,000 in most other parts of the country.
The current round of salary negotiations for the San Jose Police Department provides another metric: The average annual pay on the police force is about $189,000, not including benefits. For a junior officer, the average salary is about $165,000.
“It’s pretty good pay,” Mayor Sam Liccardo said dryly when asked about the negotiations. “If you compared us to anywhere else in the country, we’d be off the charts.”
Liccardo’s salary is $198,000.
As part of the negotiations, the union representing the officers, the San Jose Police Officers’ Association, is demanding a 14 percent raise and a $5,000 bonus.
At a time of soaring inflation, it’s hard to begrudge anyone for asking for a big raise. But when police officers, on average, are making nearly as much as the mayor, perhaps there is a larger point here about the sustainability of Bay Area salaries and prices.
A nearly 200-page study by Nation published before the coronavirus pandemic starkly laid out how pension costs were eating up municipal budgets.
Contributions to pensions have increased at a much faster rate than the combined spending on things like public assistance, public works or public health. In the first two decades of the 2000s, the amounts that local governments paid in pension contributions increased an average of 400 percent, while operating expenditures grew 46 percent.
Nation calculates that eight years from now, pensions will make up somewhere from 14 to 18 percent of municipal budgets.
Liccardo says pensions are less of a concern in San Jose after a series of negotiations in the mid-2010s scaled them back.
But he sees a much broader problem of simply getting things done: Hourly wages of electricians and plumbers in San Jose — well above $100 per hour, including pension contributions — have reached levels that make some construction projects unviable, especially given the current prices of building materials.
“You see this throughout cities in the Bay Area, where, at a time of an acute housing crisis, we are not building very much housing because it does not pencil out,” Liccardo said.
By the same token, he said, employers like local governments, restaurants and nonprofit organizations are having trouble finding workers, partly because living in the Bay Area has become too expensive and people have moved out.
This can’t continue in the long run, the mayor said.
“We are pricing essential workers out of the Bay Area, and it isn’t sustainable and it doesn’t work,” Liccardo said.
Thomas Fuller is the San Francisco bureau chief for The New York Times.