NC Workforce Not Underpaid, Understaffed

Our recent posts on NC employee pensions and health care are bringing some responses from readers, so let’s look at some of the objections.

One is that state employees get less in salary, so the retirement and health benefits just make up for that. Sorry, that stereotype is way out of date. Data shows that state workers make more.

Civitas Police Director Brian Balfour has been on the issue for years, as in this post from 2010:

“There is a widening gap between two major classes of income earners in North Carolina. In the modern-day version of the “haves” versus the “have-nots,” state government workers earn significantly more in wages and benefits than North Carolina’s private sector workers.”

In 2000-2009, the best figures available then, the wage gap between state government employees and private sector workers in NC doubled.

Average Annual Wage in North Carolina

2000               2009

State Gov’t      $32,832          $44,158

Private Sector  $30,977          $39,350

Gap                  6%                  12.2%

That’s right, the average wage for a state worker was nearly ten grand more than that of a private-sector worker. And the gap doubled in that decade. My guess is that the Great Recession continued to hit the paychecks of private-sector employees harder than those of state workers.

Another response was that the perks are needed to recruit and retain workers. But does NC need to recruit more workers? Or even retain all that are on the payroll now?

Let’s look at  “State Government Employment and Payroll Data,” the U.S. Census Bureau’s 2011 Annual Survey of Public Employment and Payroll. (Link available here.) (For simplicity, let’s just discuss full-time employees.)

The Survey indicated that North Carolina had 135,171 state workers as of March 2011. Well, it’s a big state, right?

But some bigger states have smaller workforces. Illinois has 12.8 million people, compared to North Carolina’s 9.6 million. But with 3 million more people, Illinois has about 30,000 fewer workers – 105,892. And I used to live in Illinois. I guarantee Illinois politicians and bureaucrats don’t miss many chances to pad their payrolls.

Similarly, Ohio has 11.5 million people, but only 113,917 workers, which is more than 20,000 fewer than NC has.

Pennsylvania is another state where government is hardly starved for resources. According to the Census figures, PA has 142,206 workers. That’s about 7,000 more than NC has. But Pennsylvania has nearly 3 million more residents – 12.7 million.

Let’s look at two states close to NC in size. Michigan and Georgia both have roughly 9.8 million people, slightly more than the Tar Heel State. Yet they also have significantly smaller state government payrolls: 118,740 and 110,625, respectively.

Similar trends seem to hold in a number of other states. North Carolina seems amply supplied with state employees.

So recruitment and retention hardly seems to be a problem here. Actually, the opposite seems to be true. By these statistics, if 30,000 state positions here became vacant, NC would still have a state payroll as big as the much larger state of Illinois. Or look at it this way: If the staffing of NC state government fell by 20,000 workers, the state would have about as many employees as similar states such as Michigan and Georgia.

By these statistics, it certainly doesn’t seem as if the shortage of workers is a crisis. If anything, the NC payroll looks bloated.

Finally, as my colleague Brian Balfour has pointed out, there is the matter of the value of the work produced.

In the private sector, you must produce something people want. If you don’t, you’ll be out of a job and soon.

In government, however, it doesn’t matter much if you are industrious or lazy. Or if the work is productive or destructive. The taxman collects his loot and state employees get paid.

In short, when we talk of NC pensions and health plans, this all should be kept in mind. State workers are hardly underpaid; nor are the ranks of state workers depleted.