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, Virginia has the sixth most productive state and local government workforce in the country.
As shown in Chart 1, for state and local government employment, Virginia ranks slightly above the national average with 17.4 employees for every 100 employees in the private sector—this is 6 percent above the national average of 16.4 and is the 25th highest ratio in the country.
However, as shown in Chart 2, for state and local government compensation, Virginia ranks very low with government employees earning -3 percent less than those in the private sector—significantly below the national average of 13 percent and is the 5th lowest compensation ratio in the country.
Both wages and salaries and benefits contribute to Virginia’s low government compensation ratio. As shown in Chart 3, for state and local wages and salaries, Virginia employees earn -18 percent less than those in the private sector—the 4th 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 (pensions, health insurance, etc.), Virginia employees earn 79 percent more than those in the private sector—this is -33 percent lower than the national average of 117 percent and is the 36th 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 Virginia (Note that the Bureau of Economic Analysis treats the larger independent cities as county-equivalents and merges smaller independent cities with the surrounding county).
The Virginia counties with the highest local government employment ratios include: Grayson County (52.2), Craig County (48.4), and Matthews County (40.5). The Virginia counties with the lowest local government employment ratios include: Goochland County (6.9), Henrico County (7.6), and Roanoke City (7.9).
The Virginia counties with the highest local government compensation ratios include: Gloucester County (46 percent), Essex County (32 percent), and Northampton County (31 percent). The Virginia counties with the lowest local government compensation ratios include: Surry County (-48 percent), Goochland (-47 percent), and King George County (-41 percent).
Overall, it is Virginia’s very low state and local compensation ratio, driven by both the low wages and salaries ratio and benefits ratio, 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.