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, Hawaii has the seventh least productive state and local government workforce in the country.
As shown in Chart 1, for state and local government employment, Hawaii has 18 employees for every 100 employees in the private sector—10 percent above the national average of 16.4 and is the 20th highest ratio in the country.
Additionally, as shown in Chart 2, for state and local government compensation, Hawaii ranks very poorly with government employees earning 24 percent more than those in the private sector—this is 85 percent higher than the national average of 13 percent and is the 6th highest compensation ratio in the country. The high compensation ratio compounds Hawaii’s higher than average employment ratio.
As shown in Chart 3, for state and local wages and salaries, Hawaii’s employees earn 9 percent more than those in the private sector—the 3rd highest wages and salaries ratio in the country and higher than the national average of -8 percent.
As shown in Chart 4, for state and local benefits, Hawaii’s employees earn 85 percent more than those in the private sector—this is -27 percent lower than the national average of 117 percent and is the 30th highest benefit ratio in the country.
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 Hawaii though there are only 4 of them.
The local government employment ratios in Hawaii are: Kauai County (5.3), Hawaii County (5), Maui Kalawao County (4.4), and Honolulu County (3.4).
The local government compensation ratios in Hawaii are: Kauai County (65 percent), Hawaii County (61 percent), Maui Kalawao County (57 percent), and Honolulu County (43 percent).
Overall, it is Hawaii’s high state and local compensation ratio, driven by the high wages and salaries 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.