CPI Up, but not Income – Residents Hard Pressed to Accept Tax Increases

Ran across this interesting chart which can be found at www.payscale.com.  This pay rate chart shows that since 2008 people’s pay took a hit and has not recovered past 2008 levels since!

Over this same period of time, the city budget increased almost 15% (less if certain contingency funds are not considered*).

The city cites the regional November-November Boston-Brockton-Nashua Consumer Price Index (CPI), which came in at around 2.9% this year to justify an increase in the city budget for FY13.

Let’s summarize:  Personal income for wage earners is flat compared to 2008.  CPI is up, meaning that people can afford to purchase less of what they need.  On top of that, the city increased spending by almost 15% (comparing FY13 budget to FY08 budget, not to actual*), making it even harder for wage earners to make ends meet.

Maybe the CPI is the wrong standard of measure?

The situation is worse for those on fixed incomes, who are seeing not only increasing costs of living and increasing taxes, but decreasing incomes of late.  They are the most vulnerable.

Annual Trends in Compensation for National (US)

National (US)
Boston Metro Area
Get a Free Salary Report
Compensation Data Provided by PayScale, Inc.
(*note:  It is not always “apples to apples” to compare budgets of different years because the conditions change – contingency funds for contractual obligations, for example, distort the comparison.  The city returned over $2 million of budgeted collective bargaining funds to its fund balance in FY09 through FY11.  Taking this out of the comparison results in an increase of two to three percent less.  It is even harder to compare a current budget to a prior year’s actual expenditures, which can be found in the annual financial returns.  Readers who want more detailed explanation are encouraged to participate in the public budget review process over the next couple of months.)

Leave a Reply