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A Comparison of State and Local Government Wages to The Private Sector Wages in Wyoming

Friday, 29 March 2019

by Philip Baron

In 2017 Wyoming had 292 state and local government employees per 1,000 people working in the private sector (according to employment data from the Bureau of Labor and Statistics). The state government made up 5.4%¹ of the employment in the state in 2017. Local government made up 16.7% of the state's employment for the same year. What does this all mean for Wyoming? The state and local government operates at the expense of the taxpayers. This large, low-population state could use dilution to the state and local government employment. This could be done by building up private employment in the state or cutting the government workforce. What we need is to keep the growth of government in check so that it does not crowd out emerging opportunity in the private sector.

The wages reflect that the state government pays well overall compared to the private sector. State government consistently paid more than the private sector. Local government on average pays the market rate compared to the private sector. Using average wage data² obtained from the BLS a comparison of the 21 reporting counties was made. State and local wages were compared to private sector wages. An average of the 21 counties data showed that state government employees make 23% more than the private sector. Also, the same average showed that local government employees made 3% more than the private sector in 2017. These wages do not include benefits such as health insurance or retirement. Overall state government employees made more than private employees in 18 of the 21 counties that reported wage information. In 10 of the 21 counties, the wages of local government employees are higher than those of the private sector.

This breakdown of counties confirms general knowledge about the major industries in some of the counties. It is no surprise that Albany and Laramie counties have high the highest state government wages. This is due to the high concentration of state employment in Laramie county. The University of Wyoming is located in Albany county and would account for the state employees that are concentrated there. State and local government wages are negative in counties where the private wage is higher due to a lot of mineral extraction and that is seen in Platte, Campbell, Sublette, and Sweetwater counties.

State government wages are overall higher than private wages in the majority of the counties in the state. Local government wages are higher than private wages in 10 counties and lower than the private wages in another other 10 counties. It is advisable, that the growth of government be kept in check. The best thing that could happen for the state is for organic growth of nongovernment industries. This need to happen without government subsidies, and in order to get the businesses and employees to stay in the state the growth will have to happen from within. This is the harsh truth that no one wants to hear. Growth in the state could take decades. There is no overnight fix from a business subsidy or economic diversification program that will bring up the rate of growth overnight. The hard truth is that the growth will come from those who decide to take risks in businesses in the state and after failing a few times they succeed.

Until then, the State of Wyoming is in a recession. The state legislature is faced with a budget, deficit coal does not fetch the price that it once did, and there is a great supply of oil and natural gas in the other states. Markets are brutal, and in order to have innovation, there has to be creative turnover in the market. As the old and less efficient industries that were once profitable fall to the wayside, they allow for new innovations to take their place. Government, just like private business, can step into the market where there is the opportunity to enter. The government, let run wild, can crowd out the private sector or in some cases act as a cartel by having so much control over one industry.

The best thing for Wyoming as a state right now is for it to shrink. That is what the market demands. The state government has a structural deficit. One way to close that deficit is to shrink the size of government spending in the state. In addition, people have been moving out of the state because of changing industries. These industries need to fail so that there is an opening in the market for something new and innovative to take their place. The business of government, both state and local, needs to be kept in check so that it does not crowd out the private sector.