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 Jersey has the fourteenth least productive state and local government workforce in the country.
As shown in Chart 1, for state and local government employment, New Jersey has 16.2 employees for every 100 employees in the private sector—this is -2.2 percent below the national average of 16.4 and is the 33rd highest ratio in the country.
However, as shown in Chart 2, for state and local government compensation, New Jersey ranks poorly with government employees earning 19 percent more than those in the private sector—this is 47 percent higher than the national average of 13 percent and is the 14th highest compensation ratio in the country.
As shown in Chart 3, for state and local wages and salaries, New Jersey’s employees earn 2 percent more than those in the private sector—this is the 7th 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 (pensions, health insurance, etc.), New Jersey’s employees earn 99 percent more than those in the private sector—this is -15 percent lower than the national average of 117 percent and is the 21st 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 Jersey.
The New Jersey counties with the highest local government employment ratios include: Sussex County (21.3), Cape May County (20.5), and Cumberland County (18.4). The New Jersey counties with the lowest local government employment ratios include: Morris County (8.3), Somerset County (8.3), and Middlesex County (8.7).
The New Jersey counties with the highest local government compensation ratios include: Cape May County (74 percent), Atlantic County (62 percent), and Ocean County (61 percent). The New Jersey counties with the lowest local government compensation ratios include: Somerset County (-16 percent), Morris County (-11 percent), and Salem County (2 percent).
Overall, it is New Jersey’s very high government compensation ratio, driven by a high wages and salaries ratio, which is the primary source of the poor 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.