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.

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3 Replies to “New Mexico’s Government Employment Ratio is Worsening”

  1. I agree NM has way too many state and local govt employees; seems a good place to start trimming in order to get our budget deficit resolved.

    I dislike the use of “averages” without knowing what the “median” is also. Plus, trying to compare state/local govt employees to the general sector is not fair without some other comparison data like: the educational obtainment levels of each, the number of professional career positions, technical, etc. The difference in pay may be justified if the number of positions within the state/local govt levels require higher levels of education.

    Fortune Magazine did an article last month called, ” What’s Your State’s Moocher Ratio? NM was number one, assisted in part by our high ratio of state/local govt employees.

  2. Very interesting article. Thanks for sharing. I always knew that we had a very high ratio of government jobs to private-sector jobs but had no idea that we were at the 25% level… What are the chances that this trend can be turned around?

  3. This is not just interesting, it is ridiculous. It is my understanding from listening to KOB Radio that we have a much higher ratio than Arizona, Colorado and Texas. Are we really that much better served than they? Hell no! It is no wonder that New Mexico is “Underwater” compared to other places.

    On a side note, guess which Country in Europe it not facing financial worries, Norway. Why, because they encourage the development of their resources. New Mexico discourages with regulations and taxes. If it were not so beautiful here, I think we would all leave.

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