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, New Hampshire has the twelfth most productive state and local government workforce in the country.
As shown in Chart 1, for state and local government employment, New Hampshire ranks significantly below the national average with 14.9 employees for every 100 employees in the private sector—this is -9 percent below the national average of 16.4 and is the 8th lowest ratio in the country.
As shown in Chart 2, for state and local government compensation, New Hampshire also ranks low with government employees earning 5 percent more than those in the private sector—significantly below the national average of 13 percent and is the 13th lowest compensation ratio in the country.
Both wages and salaries and benefits contribute to New Hampshire’s low government compensation ratio. As shown in Chart 3, for state and local wages and salaries, New Hampshire employees earn -16 percent less than those in the private sector—this is the 6th lowest wages and salaries ratio in the country and below than the national average of -8 percent.
As shown in Chart 4, for state and local benefits (pensions, health insurance, etc.), New Hampshire employees earn 107 percent more than those in the private sector—this is -8 percent lower than the national average of 117 percent and is the 19th 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 New Hampshire.
The New Hampshire counties with the highest local government employment ratios include: Coos County (24.9), Sullivan County (17.5), and Carroll County (15.3). The New Hampshire counties with the lowest local government employment ratios include: Hillsborough County (8.6), Rockingham County (9.1), and Grafton County (9.6).
The New Hampshire counties with the highest local government compensation ratios include: Carroll County (32 percent), Belknap County (22 percent), and Merrimack County (11 percent). The New Hampshire counties with the lowest local government compensation ratios include: Grafton County (-2 percent), Hillsborough County (1 percent), and Strafford County (5 percent).
Overall, it is New Hampshire’s very low government employment ratio and government compensation ratio, driven by a low wages and salaries ratio, which are the primary source of the good government workforce metric.
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.