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, North Carolina has the seventeenth most productive state and local government workforce in the country.
On state and local government employment, North Carolina ranks above the national average with 19.32 employees for every 100 employees in the private sector which is 15.2 percent above the national average of 16.77 and is the 15th highest ratio in the country.
On state and local government compensation, North Carolina ranks below average with government employees earning 3.7 percent more than those in the private sector—significantly below the national average of 11.7 percent and is the 15th lowest compensation ratio in the country.
Both wages and salaries and benefits contribute to North Carolina’s low government compensation ratio. On state and local wages and salaries, North Carolina employees earn -8 percent less than those in the private sector—the 22nd lowest wages and salaries ratio in the country and below than the national average of -8.8 percent.
On state and local benefits (pensions, health insurance, etc.), North Carolina employees earn 60.4 percent more than those in the private sector which is -47.5 percent lower than the national average of 115 percent and is the 10th lowest benefit ratio in the country.
Overall, it is North Carolina’s low government compensation ratio, especially having the 10th lowest benefits ratio, which is the primary source of the good 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.