California among lowest in the nation in ratio of government employees

The U.S. Census Bureau has released estimates of state and local government employment, and the results may be surprising to those who believe California has too many government workers.

The Center for the Continuing Study of the California Economy, an independent Palo Alto-based think tank, reported that in 2008 California had the third-lowest number of full-time equivalent state government employees relative to population among all 50 states.

In California there are 103 state employees for every 10,000 residents. Illinois had the lowest ratio at 97.

The U.S. average was 143 state employees per 10,000 residents. California’s ratio of state government employees relative to population was 28 percent below the national average.

Nevada, Arizona and Texas were other states with the lowest ratios of state workers to population. When state and local government employees (including education) are added together, California has the fourth-lowest ratio of employees to population.

California had 484 state and local full-time equivalent employees per 10,000 residents in 2008 compared to the national average of 549.

Nevada was the state with the lowest ratio (440) followed by Michigan (475), Pennsylvania (478), and Utah (493). California’s ratio was 12 percent below the national average.
Texas has 563 state and local government employees per 10,000 residents or slightly above the national average.

K-12 education has the largest number of employees in most states. California has the 5th lowest ratio of K-12 education employees to population. California is 19% below the national average in education employees relative to population despite the fact that California has an above-average percent of K-12 students in the state’s population. Texas ranks 5th highest among states with 275 K-12 employees per 10,000 residents.

The Census Bureau tabulations include limited data on compensation. Data is provided for a single month (March of 2008). Complete comparisons are difficult because the data do not directly compare occupations.

However, it is clear from this data that California compensation averages are above the national average for state employees, state and local government employees combined and employees in the K-12 education system.

The average wage for all private and public sector employees in California was 13 percent above the national average in 2008 based on comprehensive data from the U.S. Bureau of Labor Statistics.

Other implications from the data:
• Between March 2008 and October 2009 state and local government declined by approximately 70,000 jobs while California added approximately 600,000 residents. As a result the ratio of employees to population in each of the three categories discussed above has declined in California. Declines in state and local government employment were experienced in some other states as well.

• The data suggest that at the aggregate level California is not overstaffed relative to caseloads in the major program areas. Indeed, a stronger case can be made that public programs are being carried out with less staffing than in most other states.

• Public agencies in California continue to face serious budget challenges as the weakening economy reduces revenues while most caseloads are still increasing. States and local agencies face mid-year budget revisions and can look forward to a very challenging 2010-2011 budget year with continuing challenges in following years even with a moderate economic recovery and associated revenue gains.