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, Rhode Island has the third least productive state and local government workforce in the country.
As shown in Chart 1, for state and local government employment, Rhode Island ranks really well with 13.1 employees for every 100 employees in the private sector—this is -20 percent below the national average of 16.4 and is the 4th lowest ratio in the country.
However, as shown in Chart 2, for state and local government compensation, Rhode Island ranks very poorly with government employees earning a whopping 37 percent more than those in the private sector—189 percent higher than the national average of 13 percent and is the 2nd highest compensation ratio in the country. The high compensation ratio more than offsets the Rhode Island’s low employment ratio.
Both wages and salaries and benefits contribute to Rhode Island’s high government compensation ratio. As shown in Chart 3, for state and local wages and salaries, Rhode Island employees earn 15 percent more than those in the private sector—the 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, Rhode Island employees earn 139 percent more than those in the private sector—this is 19 percent higher than the national average of 117 percent and is the 7th highest benefit ratio in the country. Though the differential is highest for benefits, wages and salaries weigh more heavily since it constitutes 69 percent of total compensation.
While identifying the specific underlying causes of Rhode Island’s government compensation problem is beyond the scope of this analysis, you can begin by examining the actual compensation of government employees at RIOpenGov.org
Of course, efficiency for local government is more usefully 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 Rhode Island.
The Rhode Island counties with the highest local government employment ratios include: Bristol County (12.2), Washington County (10.7), and Newport County (8.5). The counties with the lowest local government employment ratios include: Providence County (7.1) and Kent County (8).
The Rhode Island counties with the highest local government compensation ratios include: Bristol County (68 percent), Newport County (53 percent), and Kent County (42 percent). The counties with the lowest local government compensation ratios include: Washington County (37 percent) and Providence County (40 percent).
Overall, it is Rhode Island’s very high state and local compensation ratio, driven by both the high wages and salaries ratio and benefits ratio, that is the primary source of the poor 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.