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, Michigan has the twenty-first least productive state and local government workforce in the country.
On state and local government employment, Michigan has 15.85 employees for every 100 employees in the private sector which is -5.5 percent below the national average of 16.77 and is the 12th lowest ratio in the country.
On state and local government compensation, Michigan’s government employees earn 14.3 percent more than those in the private sector which is 22.6 percent higher than the national average of 11.7 percent and is the 17th highest compensation ratio in the country.
On state and local wages and salaries, Michigan’s government employees earn -2.8 percent less than those in the private sector—the 16th highest wages and salaries ratio in the country and higher than the national average of -8.8 percent.
On state and local benefits (pensions, health insurance, etc.), Michigan’s employees earn 92.6 percent more than those in the private sector which is -19.5 percent lower than the national average of 115 percent and is the 28th highest benefit ratio in the country.
Overall, it is Michigan’s higher-than-average state and local government compensation ratio, driven by the wages and salaries ratio, which is the primary source of the poor government workforce metrics. Fortunately, much of that is offset by lower-than-average state and local government employment ratio (the 12th lowest in the country).
Note: Recent data updates include significant definitional changes, especially to benefits which are now based on an accrual basis as opposed to a cash-basis. The changes currently go back to 2000 so comparisons between pre- and post-2000 data must be used with caution.
Scott has nearly 20 years of experience as a public policy economist. He is the author, co-author and editor of over 180 studies and books. His professional experience also includes positions at the American Conservative Union Foundation, Granite Institute, Federalism In Action, Maine Heritage Policy Center, Tax Foundation, and Heritage Foundation.