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 Dakota has the most productive state and local government workforce in the country.
On state and local government employment, North Dakota ranks as just above average with 17.84 employees for every 100 employees in the private sector—6.4 percent above the national average of 16.77 and is the 23rd highest ratio in the country.
However, on state and local government compensation, North Dakota ranks very low with government employees earning 10.4 percent less than those in the private sector—significantly below the national average of 11.7 percent and is the lowest compensation ratio in the country. The low compensation ratio more than offsets the North Dakota’s above average employment ratio.
Both wages and salaries and benefits contribute to North Dakota’s low government compensation ratio. On state and local wages and salaries, North Dakota employees earn -23.6 percent less than those in the private sector—the lowest wages and salaries ratio in the country and significantly below than the national average of -8.8 percent.
On state and local benefits, North Dakota employees earn 62.8 percent more than those in the private sector—45.5 percent lower than the national average of 115 percent and is the 11th lowest benefit ratio in the country. Though the differential is highest for benefits, wages and salaries weigh more heavily since it constitute 72 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.
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.