New Mexico’s Government Employment Ratio is Worsening

The Rio Grande Foundation has released a new study on New Mexico’s government employment from Scott Moody and Wendy Warcholik, Ph.D. and the news is not good. That’s because, even as the private sector cuts costs and embraces economic reality, the public (government) sector continues to grow unabated.

Among the study’s findings:

* In 2008, state and local government employed 25.3 people for every 100 people employed by the private sector, that’s a 0.8 percentage point increase from 2007 when state and local governments employed 24.5 people for every 100 private sector workers;

* Relative to the national average of 16.72, New Mexico’s state and local government employment ratio is 51 percent higher and is the 2nd highest ratio in the country (New Mexico was 3rd highest in 2007;

* Not only does New Mexico hire more government workers than almost any other state, but those employees are more highly compensated than average New Mexico workers. In 2008, state and local government compensation was $49,711 per job while private sector compensation was $44,601 per job. As a result, the average state and local government job paid 11.5 percent higher than the average private sector job;

* The budgetary savings to the state by aligning New Mexico’s state and local government employment and compensation ratios to the national average would be astounding. In 2008 alone, such an adjustment would have saved taxpayers up to $2,946,289,629.

Not only is New Mexico’s bloated bureaucracy among the ripest targets for policymakers, but the problem worsened significantly between just 2007 and 2008. Unfortunately, allowing the number of private sector workers who pay taxes to whither away while continuing to expand government is unsustainable.