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, Vermont has the eighth least productive state and local government workforce in the country.
As shown in Chart 1, for state and local government employment, Vermont has 18.4 employees for every 100 employees in the private sector which is 12 percent above the national average of 16.4 and is the 17th highest ratio in the country.
Additionally, as shown in Chart 2, for state and local government compensation, Vermont ranks poorly with government employees earning 21 percent more than those in the private sector which is 64 percent higher than the national average of 13 percent and is the 10th highest compensation ratio in the country. The high compensation ratio compounds Vermont’s higher than average employment ratio.
As shown in Chart 3, for state and local wages and salaries, Vermont’s employees earn 2 percent more than those in the private sector—this is the 9th 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, Vermont’s employees earn 103 percent more than those in the private sector—this is -12 percent lower than the national average of 117 percent and is the 20th 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 Vermont.
The Vermont counties with the highest local government employment ratios include: Essex County (58.2), Grand Isle County (34.7), and Orange County (23). The Vermont counties with the lowest local government employment ratios include: Chittenden County (8.3), Bennington County (9.5), and Washington County (10.1).
The Vermont counties with the highest local government compensation ratios include: Lamoille County (45 percent), Windsor County (25 percent), and Grand Isle County (23 percent). The Vermont counties with the lowest local government compensation ratios include: Essex County (-24 percent), Windham (6 percent), and Franklin County (11 percent).
Overall, it is Vermont’s high state and local compensation ratio, driven by both the wages and salaries ratio and benefits ratio, that is the 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.