Public education, law enforcement, emergency services, and road maintenance are all largely funded by state tax dollars. State and local government employees help these public services run smoothly. Despite the fact that these services are needed in every corner of the country, employment in the nation’s public sector is still far below its pre-recession level and varies widely by state.
Using data from the Bureau of Labor Statistics (BLS), 24/7 Wall St. reviewed the percentage of each state’s labor force working for state and local governments, excluding federal employment. While state and local governments employ 14.2% of the country’s workforce, Wyoming’s public sector accounted for 22.4% of the state’s workforce, the largest share of all states. At just 9.8%, Rhode Island employed the smallest share. These are states with the most (and least) state and local government workers.
State and local government employees perform a range of tasks to keep a state running properly. Some workers are needed as administrators, while others maintain roads, serve as representatives, and help provide other public goods and services. More than half of all state and local government workers were employed in educational services.
The highest concentrations of public sector jobs are frequently found in states with relatively large rural populations. Eight of the 10 states with the highest concentrations of public sector jobs were less densely populated than the national population density of 87.4 people per square mile. On the other hand, eight of the 10 states with the smallest public sectors were twice as densely populated as the nation as a whole.
According to Martin Kohli, senior economist at the Bureau of Labor Statistics, several factors account for this relationship. When a state’s population is more widely dispersed, towns are often smaller and more numerous. Providing public services to populations spread over great distances often requires more manpower, and can be more costly as a result, Kohli explained. Each town needs a minimum number of government employees to perform necessary functions, and more fragmented political regions require more local government workers.
Conversely, while large cities require higher numbers of state workers in absolute terms, each worker is able to serve many more people in urban areas, reducing the overall concentration of an area’s public sector employment.
Rural areas also do not offer the same economic advantages as more densely populated regions. For example, the massive number of transactions occurring in a city will often lower the cost of goods and services. In addition, when businesses and consumers are closer together, transportation costs fall and information travels faster, both of which help promote economic growth.
Without a flourishing private sector, a larger share of an area’s economy is often driven by the government. Generally, a state’s public sector reacts much more slowly than private sectors in response to economic fluctuations. In fact, since 2000, state and local government employment has commanded an increasing share of the national workforce as private sector employment contracts. Conversely, when private employment grows, as it has since 2010, the share of employment in state and local governments falls, even as the total number of jobs in those areas remain constant.
In recent years, the connection between fiscal challenges — which are generally more prevalent in rural America — and strains on state and local budgets has been well-established by researchers. Poor economic conditions may lead to a greater need for larger state and local government workforces. However, higher concentrations of these jobs and low incomes are each independent features of rural areas.
To determine the share of each state’s labor force employed by state and local governments, 24/7 Wall St. used 2012 employment data from the Bureau of Labor Statistics (BLS). The percentage of the population working in a particular industry is relative to the state’s total nonfarm payrolls. State employment-to-population ratios are also from the BLS. Real gross domestic product (GDP) come from the Bureau of Economic Analysis (BEA) and are for 2012. Population density, the share of households living in rural areas, median household income, and poverty rates are from the U.S. Census Bureau’s 2013 American Community Survey.
These are the states with the most (and least) people work for the government.