There are two major elements to look at when examining a state’s government workforce—the number of employees and the level of their pay. Each element is measured relative to the national average and summed together to obtain an overall measure of workforce productivity. By this metric, North Dakota has the most productive state and local government workforce in the country.
As shown in Chart 1, for state and local government employment, North Dakota ranks as just above average with 17.5 employees for every 100 employees in the private sector—7 percent above the national average of 16.4 and is the 23rd highest ratio in the country.
However, as shown in Chart 2, for state and local government compensation, North Dakota ranks very low with government employees earning -12 percent less than those in the private sector—significantly below the national average of 13 percent and is the lowest compensation ratio in the country. The low compensation ratio more than offsets the North Dakota’s above average employment ratio.
Both wages and salaries and benefits contribute to North Dakota’s low government compensation ratio. As shown in Chart 3, for state and local wages and salaries, North Dakota employees earn -24 percent less than those in the private sector—the lowest wages and salaries ratio in the country and significantly below than the national average of -8 percent.
As shown in Chart 4, for state and local benefits, North Dakota employees earn 59 percent more than those in the private sector—49 percent lower than the national average of 117 percent and is the 9th lowest benefit ratio in the country. Though the differential is highest for benefits, wages and salaries weigh more heavily since it constitute 73 percent of total compensation.
Of course, efficiency for local government helps to be measured on a more local scale. As such, we have also calculated the employment and compensations ratios of local government workers for every county in North Dakota.
The counties with the highest local government employment ratios include: Sioux County (681.3), Benson County (199.4), and Rolette County (108.6). The counties with the lowest local government employment ratios include: Williams County (4.2), Triall County (5.9), and Cass County (5.9).
The counties with the highest local government compensation ratios include: Triall County (73 percent), Sioux County (64 percent), and Rolette County (43 percent). The counties with the lowest local government compensation ratios include: Slope County (-89 percent), Oliver County (-56 percent), and Mercer County (-50 percent).
Overall, it is North Dakota’s very low state and local compensation ratio, driven by both low wages and salaries and benefits ratios, that is the primary source of the good government workforce metrics.
J. Scott Moody has over 18 years as a public policy economist with a specialty in tax policy and has over 180 publications. He has worked for numerous national and state-based think tanks such as Federalism In Action, Tax Foundation, Heritage Foundation, and The Maine Heritage Policy Center.