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, Alaska has the second least productive state and local government workforce in the country.
As shown in Chart 1, for state and local government employment, Alaska ranks very poorly with 24.8 employees for every 100 employees in the private sector—51 percent above the national average of 16.4 and is the 3rd highest ratio in the country.
Additionally, as shown in Chart 2, for state and local government compensation, Alaska also ranks very poorly with government employees earning 32 percent more than those in the private sector—149 percent higher than the national average of 13 percent and is the 3rd highest compensation ratio in the country. The high compensation ratio compounds Alaska’s high employment ratio.
Both wages and salaries and benefits contribute to Alaska’s high government compensation ratio. As shown in Chart 3, for state and local wages and salaries, Alaska employees earn 3 percent more than those in the private sector—the 5th highest wages and salaries ratio in the country and significantly higher than the national average of -8 percent.
As shown in Chart 4, for state and local benefits, Alaska employees earn 147 percent more than those in the private sector—26 percent higher than the national average of 117 percent and is the 5th highest benefit ratio in the country. Though the differential is highest for benefits, wages and salaries weigh more heavily since it constitutes 63 percent of total compensation.
Overall, it is Alaska’s very high state and local employment and compensation ratios that are the primary source of the poor government workforce metrics.
While identifying the specific underlying causes of Alaska’s government employment and compensation problem is beyond the scope of this analysis, you can begin by examining the actual compensation of government employees at Alaska Policy Forum.
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.