NCPA - National Center for Policy Analysis


February 7, 2006

The nation's 16 million state and local government workers form a large, growing and well-compensated class in society, says Chris Edwards, Director of Tax Policy Studies at the Cato Institute.

According to Edwards:

  • State and local workers earned $36 per hour in wages and benefits in 2005, compared to $24 for private sector workers.
  • School teachers and administrators increased 22 percent between 1994-2004; by contrast, the number of children in public schools increased only 9 percent during the same period.
  • Police, fire, corrections and legal staff grew on average 21 percent over the last decade.
  • State and local health bureaucracies have grown as Medicaid spending has exploded.

The size of state and local bureaucracies varies widely by state, says Edwards:

  • The largest bureaucracies are in Alaska, Washington D.C., and Wyoming, with government workforces reaching 16.6, 16.2 and 16.1 percent, respectively, of the total workforce.
  • Nevada had the smallest bureaucracy with a workforce half the size of Alaska's at 8.6 percent, followed by Rhode Island, 9.5 percent, and Pennsylvania, 9.6 percent.

Numerous factors affect the size of bureaucracies in the states, including demographics, crime level, and differing propensity to contract out or privatize government tasks, says Edwards. Corruption and waste also play major roles as they reduce the effectiveness of government's ability to operate efficiently.

One conclusion, says Edwards, is that there seems to be substantial room for increased government efficiency in many states. The data indicates that some states are able to deliver government services with many fewer workers than do other jurisdictions.

Source: Chris Edwards, "State Bureaucracy Update" Cato Institute, Tax and Budget Bulletin no. 29, January 2006.

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