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Wednesday, October 29, 2008 Government Employment, Health System Reform, Presidential Elections   Volume 4 Issue 10  
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State and Local Governments Not Flourishing
Health System Reform Summit
This Time Around, the West is Different
House Bill 40
Performance Management: A Difficult Challenge
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State and Local Governments Not Flourishing
by CPPA Policy Team

Introduction
In mid-October 2008, the U.S. Census Bureau released new data from its survey of state and local government employment. The survey data alone may be misleading, suggesting that readers believe government is booming, wages are skyrocketing, and more and more people are on the payroll. What, in fact, is happening in Utah is a slight growth in the number of employees and state and local government wages growing at a slower rate than private sector wages.
 
Number of State and Local Government Employees in Utah
Utah sits right in the middle of the pack of the number of local and state government employees per capita. The Bureau of Labor Statistics figures show that while some states such as Wyoming have 103 state and local government employees per 1,000 population (2007), Utah has 60 state and local government employees per 1,000 in 2007 compared with 63 per 1,000 (average) in 2002. The state with the lowest number of state and local government employees is Pennsylvania, with 49 per 1,000. Tables showing these figures for all 50 states are appended to this report.
 
Additionally, a breakdown of Utah employment by ownership sector shows that in 2002, private sector jobs accounted for 82.4% of employment, but by 2007 this had increased to 84.0%. This means that the percentage of state, local and federal government jobs decreased from 17.6% to 16.0%.

 

Additionally, of the 177,500 jobs that were added to Utah during this time period, 93.8% were in the private sector (U.S. Bureau of Labor Statistics Quarterly Census of Employment and Wages).
 
Population Growth and Government Jobs
The U.S. Census Bureau Population Estimate Series shows that Utah added 308,000 new residents between 2002 and 2007, representing a 13.2% increase. This ranks Utah as third in the nation for population growth, just behind Nevada and Arizona. So while government employment grew by 11,289 jobs in this period, representing a 7.6% increase, the population grew by 13.2%.
 
Education & Health Care Sector Jobs
This sector is the third largest employer for all Utahns—whether the institution they work for is private or public. It is also a rapidly growing sector—giving the double whammy of aging baby-boomers in need of health care and the state’s large school age population. From 2002 to 2007, private companies that provide these services added almost 26,000 new jobs—a 25.9% increase. Meanwhile, government employment in these sectors grew much more slowly. There were 3,631 jobs added to educational institutions run by local government entities (usually school districts) for an increase of 6.5%. The largest percent increase came from local government entities responsible for providing health care and social services—these jobs increased by 19.5% which is closer to the private sector’s growth. However, when the numbers are examined more closely this increase represents only 455 jobs statewide (U.S. Bureau of Labor Statistics Quarterly Census of Employment and Wages).
 
Regarding the higher education figures contained within the Census report, comparing those figures with data provided by the Utah System of Higher Education and the data reported to the US Bureau of Labor Statistics, there are concerns with the integrity of the Census Bureau figures. The Census report is clearly in error when it lists the growth in jobs for higher education instructors. The report notes that the state added 3,047 full-time equivalent professors (see Table 1). This, if it were accurate, would be a 59 percent increase from 2002.
 

Table 1: Full Time Equivalent Employment for Higher Education-Instructional, Utah

Year

Full-time Equivalent Employment

2002

5,126

2003

5,158

2004

5,393

2005

5,428

2006

5,699

2007

8,173*

Source: US Census Bureau, Public Employment Data, State and Local Governments, Utah.
*In 2007, the Census listed three categories: full-time employees, part-time employees, and full-time equivalent employment. The full time employee figure was 5,913; the full time equivalent figure was 8,173. In all previous years, the Census listed only full-time equivalent data.
 
Indeed, it would be a significant increase, if true. But, it simply isn’t accurate. The Utah System of Higher Education reports annually on staffing within higher education.[1] It reported that the full-time equivalent count for faculty, adjunct faculty, and wage rate faculty was 4,910 employees in 2002. The number of full-time faculty increased to 5,339, an increase of only 429 FTEs (see Table 2). This is an increase of 8.7% over the five-year period.
 

Table 2: USHE Employee FTE Count for Faculty, Adjunct, and Wage Rate Faculty
 

Year

Full-time Equivalent Count

2001

4,783

2002

4,910

2003

4,682

2004

4,925

2005

4,587

2006

4,893

2007

5,339

Note: This count includes all FTE for Regular Faculty, Adjunct, and Wage Rated Faculty in the USHE. This includes both appropriated and non-appropriated FTEs. It does not include teaching assistants. The source is the USHE Data Books.
 
Government Wages
State and local government payrolls accounted for $5.6 billion in wages in 2007 or 12.4% of total payrolls in Utah. Since 2002, state government wages grew 26.1% and local government grew by 23.3%. Meanwhile, the private sector increased its wages 45.9% during the same time period. This growth in private sector wages also translated into a higher percentage of total wages being generated by private employers, as shown below.
 


 
 


Another comparison that can be done, with caution, is to divide total wages by total employment to get an approximate wage per employee that can be used to compare the different sectors. This is a figure that should be used with caution because neither figure accounts for differences in wages earned by full-time, part-time or seasonal employees. Given that retail, hospitality and personal service jobs comprise a relatively large portion of Utah private sector employment and these industries have large numbers of employees who work part-time, this is of concern.
 
For the private sector in Utah during 2002, total wages divided by total employees equaled an annual “wage” of $30,011. By 2007, that had grown to $36,664. This was a growth of 22.1% over the five-year period. Meanwhile state government had figures of $36,069 and $43,011, slightly higher than the private sector. However, the growth rate was lower, 19.2%. Local government had wage equivalents lower than the private sector—$27,294 in 2002 and $30,985. Its growth rate was also the lowest of all sectors, at 13.5%.
 
When inflation is factored in, the growth in wages per employee in all sectors slows down considerably. Earnings in the private sector grow by only 6.0% over the five-year period. State government saw a 3.5% increase in wages after factoring in inflation while local government actually saw a decrease in wages per employee—down 1.5%. This means in real terms local government employees were earning more in 2002 than they are now.
 
 
 
Conclusion
Trying to measure and compare employment and wage figures between sectors, across political and economic boundaries is notoriously tricky and no one statistic can tell the full story. To look at the growth in Utah’s state and local government sectors without comparing it to what is happening in the overall Utah economy is irresponsible at best. To then take those figures and compare Utah to other states that may not have been experiencing the same kind of economic or demographic growth is cause for great concern. This is especially when it appears the entire US economy is sliding into a recession. Recessions usually mean that private sector employers will cut payrolls at the same time there will be an increased demand for public sector services. This increase in demand is usually accompanied by an increase in public sector payrolls. Thus, depending on how difficult economic conditions become in the near future, all states may expect the proportion of private sector jobs to decline while government will become a larger share of the total employment pie. In addition, the unique demographics of Utah guarantee there will always be a demand for public school teachers and public health and social service workers, which make up a considerable portion of public sector employment in Utah.

State and Local Government Employees per 1,000 Residents 2002 and 2007

States in Alphabetical Order

State

Government Employees per 1,000 Residents 2002

Government Employees per 1,000 Residents 2007

State Government

Local Government

Total

2002 Rank

State Government

Local Government

Total

2007 Rank

AK

34

57

91

2

33

54

87

2

AL

19

45

64

25

20

46

67

19

AR

21

38

60

37

23

40

62

32

AZ

13

45

58

43

12

43

55

46

CA

12

48

61

34

12

47

60

39

CO

15

48

64

26

15

48

63

28

CT

19

45

63

29

20

45

65

24

DE

33

27

61

35

33

28

62

34

FL

13

41

54

47

10

42

52

48

GA

17

44

61

33

16

44

60

35

HI

54

14

68

17

54

14

68

15

IA

16

55

71

11

17

55

72

12

ID

18

51

69

15

17

49

66

21

IL

11

47

58

44

10

47

56

43

IN

15

43

57

45

14

44

58

42

KS

15

63

78

4

15

64

79

4

KY

21

42

62

32

20

42

62

33

LA

23

49

73

8

24

48

72

11

MA

16

40

56

46

16

40

56

44

MD

18

41

59

38

18

42

60

37

ME

19

46

65

22

19

46

65

23

MI

14

44

59

41

14

42

56

45

MN

14

54

67

18

14

51

65

22

MO

16

47

63

31

16

47

63

29

MS

20

51

71

9

20

53

72

10

MT

22

48

70

12

23

47

69

13

NC

19

48

67

20

20

48

67

18

ND

27

55

82

3

28

57

85

3

NE

19

59

78

5

18

60

78

5

NH

16

42

58

42

16

44

60

38

NJ

15

45

60

36

16

47

63

27

NM

25

51

77

6

26

53

78

6

NV

13

38

52

48

13

40

53

47

NY

13

55

67

19

12

55

68

17

OH

11

48

59

39

12

47

59

40

OK

23

48

71

10

23

52

75

7

OR

14

49

63

27

17

48

65

25

PA

11

38

49

50

11

38

49

50

RI

17

34

51

49

16

34

50

49

SC

22

47

69

16

21

47

68

16

SD

18

57

75

7

18

56

73

9

TN

14

44

59

40

15

44

59

41

TX

15

50

65

21

14

49

63

26

UT

22

42

63

28

20

40

60

36

VA

19

46

65

23

19

48

67

20

VT

24

45

70

13

27

47

74

8

WA

20

49

69

14

20

48

68

14

WI

14

51

64

24

14

49

63

31

WV

23

40

63

30

22

41

63

30

WY

25

76

101

1

24

79

103

1

Total

15

47

62

NA

15

47

62

NA

Source: US Bureau of Labor Statistics Quarterly Census of Employment & Wages (Employment data) and US Census Bureau Population Estimates Series (Population data) Neighboring states to Utah are in Italics
 

State and Local Government Employees per 1,000 Residents 2002 and 2007

States Ranked by 2007 Total Employees
 

State

Government Employees per 1,000 Residents 2002

Government Employees per 1,000 Residents 2007

State Government

Local Government

Total

Rank of 2002 Total

State Government

Local Government

Total

Rank of 2007 Total

WY

25

76

101

1

24

79

103

1

AK

34

57

91

2

33

54

87

2

ND

27

55

82

3

28

57

85

3

KS

15

63

78

4

15

64

79

4

NE

19

59

78

5

18

60

78

5

NM

25

51

77

6

26

53

78

6

OK

23

48

71

10

23

52

75

7

VT

24

45

70

13

27

47

74

8

SD

18

57

75

7

18

56

73

9

MS

20

51

71

9

20

53

72

10

LA

23

49

73

8

24

48

72

11

IA

16

55

71

11

17

55

72

12

MT

22

48

70

12

23

47

69

13

WA

20

49

69

14

20

48

68

14

HI

54

14

68

17

54

14

68

15

SC

22

47

69

16

21

47

68

16

NY

13

55

67

19

12

55

68

17

NC

19

48

67

20

20

48

67

18

AL

19

45

64

25

20

46

67

19

VA

19

46

65

23

19

48

67

20

ID

18

51

69

15

17

49

66

21

MN

14

54

67

18

14

51

65

22

ME

19

46

65

22

19

46

65

23

CT

19

45

63

29

20

45

65

24

OR

14

49

63

27

17

48

65

25

TX

15

50

65

21

14

49

63

26

NJ

15

45

60

36

16

47

63

27

CO

15

48

64

26

15

48

63

28

MO

16

47

63

31

16

47

63

29

WV

23

40

63

30

22

41

63

30

WI

14

51

64

24

14

49

63

31

AR

21

38

60

37

23

40

62

32

KY

21

42

62

32

20

42

62

33

DE

33

27

61

35

33

28

62

34

GA

17

44

61

33

16

44

60

35

UT

22

42

63

28

20

40

60

36

MD

18

41

59

38

18

42

60

37

NH

16

42

58

42

16

44

60

38

CA

12

48

61

34

12

47

60

39

OH

11

48

59

39

12

47

59

40

TN

14

44

59

40

15

44

59

41

IN

15

43

57

45

14

44

58

42

IL

11

47

58

44

10

47

56

43

MA

16

40

56

46

16

40

56

44

MI

14

44

59

41

14

42

56

45

AZ

13

45

58

43

12

43

55

46

NV

13

38

52

48

13

40

53

47

FL

13

41

54

47

10

42

52

48

RI

17

34

51

49

16

34

50

49

PA

11

38

49

50

11

38

49

50

Total

15

47

62

NA

15

47

62

NA

Source: US Bureau of Labor Statistics Quarterly Census of Employment & Wages (Employment data) and US Census Bureau Population Estimates Series (Population data) Neighboring states to Utah are in Italics
 
 


[1] Utah System of Higher Education publishes the Data Book annually. The Data Books can be found at http://www.utahsbr.edu/bud04e.html

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