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, Texas has the third most productive state and local government workforce in the country.
On state and local government employment, Texas ranks as just above average with 16.94 employees for every 100 employees in the private sector—1 percent above the national average of 16.77 and is the 30th highest ratio in the country.
However, on state and local government compensation, Texas ranks very low with government employees earning -7.2 percent less than those in the private sector—significantly below the national average of 11.7 percent and is the third lowest compensation ratio in the country. The low compensation ratio more than offsets the Texas’s above average employment ratio.
Both wages and salaries and benefits contribute to Texas’s low government compensation ratio. On state and local wages and salaries, Texas employees earn -18.1 percent less than those in the private sector—the 5th lowest wages and salaries ratio in the country and significantly below than the national average of -8.8 percent.
On state and local benefits, Texas employees earn 53.7 percent more than those in the private sector—53 percent lower than the national average of 115 percent and is the 6th lowest benefit ratio in the country. Though the differential is highest for benefits, wages and salaries weigh more heavily since it constitute 75 percent of total compensation.
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.