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 twelfth least productive state and local government workforce in the country.
On state and local government employment, New Jersey has 16.4 employees for every 100 employees in the private sector which is only -2.2 percent below the national average of 16.77 and is the 34th highest ratio in the country.
However, on state and local government compensation, New Jersey ranks poorly with government employees earning 18.7 percent more than those in the private sector which is a whopping 60 percent higher than the national average of 11.7 percent and is the 13th highest compensation ratio in the country.
On state and local wages and salaries, New Jersey’s employees earn 3.2 percent more than those in the private sector—the 5th 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.), New Jersey’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 27th highest benefit ratio in the country.
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 metrics.
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.
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.