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Brier Dudley's blog

Brier Dudley offers a critical look at technology and business issues affecting the Northwest.

October 15, 2007 at 4:17 PM

More details from the Microsoft economic study

I’ve been getting questions about the Conway study today, mostly about compensation. Here’s the key passage, referring to 2004 pay:

Not counting stock option income, annual labor earnings at Microsoft averaged $145,000 per employee, more than three times the state mean of $46,200. Including stock option income, average Microsoft employee compensation came to $188,900.

A few other stats, also from 2004:

— Microsoft was the state’s second largest private employer in Washington, behind only Boeing.

— While Microsoft employed only half as many people as Boeing, its total compensation was nearly equal — $5.3 billion, including stock options, vs. Boeing’s $5.9 billion.

— Microsoft bought $1.2 billion worth of goods and services from Washington producers to support operations.

— In-state purchases were $43,600 per employee, “well above average for businesses in Washington.”

— Combining compensation and spending on local goods and services, “Microsoft pumped $6.5 billion into the Washington economy.”

— Every job at Microsoft supported 4.1 jobs elsewhere in the economy, “mostly in trade, services and government.”

— Microsoft accounted for 5.2 percent of the state’s personal income, or $11.2 billion.

— The company raised the state’s per capita income by $520. (Conway didn’t make a joke about Highway 520 …)

From 1990 to 2004, “Microsoft was the single largest contributor to economic growth in Washington … accounting for more than one-fifth of the total gain in state employment.”

The effect is bigger within King County, where the company generated 9 percent of the county’s total income and rasied the per capita income by $1,551 in 2004.

It gets even crazier if you look at the effect within the city of Redmond, where Microsoft increased per capita income by $12,939 or 21.4 percent in 2004.

Conway estimated that nearly a third of the people in Redmond were directly or indirectly dependent upon Microsoft, and the company generated an estimated $19.2 million of the city’s $48.8 million in tax revenue.

But don’t forget that Redmond doesn’t get as much tax benefit as you’d expect, because of generous tax breaks the state gives Microsoft and other high-tech companies.

Comments | Topics: Microsoft, Public policy

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