| February 8, 2010
How Many Oklahomans Does It Take to Fund One Government Job?
[Editor’s note: The data in this article have been superseded by the updated information here.]
It takes 17 Oklahomans in the private sector to fund one Oklahoma state government job.
In total, for 2008, there were 85,716 state government workers (including higher education) in Oklahoma, earning $4,131,154,000, or an average of $48,196 per job. As a result, it would take a total of 1,441,023 private-sector jobs to fund Oklahoma's state bureaucracy-slightly more people than were employed in the private sector in 2008 (1,301,887).1
Oklahomans are paying dearly for these 85,716 state government employees in the form of higher taxes. According to recent OCPA research, Oklahoma state government has 27,548 too many jobs2 when compared to the state employment average nationwide. Eliminating these jobs would have saved Oklahoma's taxpayers up to $1,312,834,006 in 2008.3
That's state government. How about local government?
It takes 29 Oklahomans in the private sector to fund one Oklahoma local government job.
In total, for 2008, there were 194,363 local government workers in Oklahoma earning $8,957,930,000, or an average of $46,089 per job. As a result, it would take a total of 5,485,774 private-sector jobs to fund Oklahoma's local bureaucracy-or 4.2 times the number of people currently employed by Oklahoma's private sector in 2008.4
As with the state government, Oklahomans are also paying dearly for these 194,363 local government workers. Oklahoma local government has 34,846 too many jobs when compared to the local employment average nationwide. Eliminating these jobs would have saved Oklahoma's taxpayers up to $1,598,435,949 in 2008.
Oklahoma's state and local government employees earn $13,089,084,000, making state and local government the largest industry classification in the state. Government payrolls are larger than other industry classifications such as manufacturing ($12,000,040,000), health care and social assistance ($8,928,878,000), retail trade ($6,255,275,000), professional and technical service ($5,124,178,000), and even U.S. government civilian/military ($7,081,135,000).
Moreover, Oklahoma's 280,079 state and local government employees constitute the largest industry classification in terms of employment. In this case, it is larger than manufacturing (159,025), retail trade (222,373), health care and social assistance (204,353), and administrative and waste services (141,594).
1. This may appear nonsensical at first glance. However, keep in mind that this counts only taxes that are directly paid by individuals and does not include taxes paid by businesses, taxpayers with higher than average incomes, revenue from matching federal funds (such as Medicaid), or taxes paid by non-residents or retirees. In short, this exercise is meant to illustrate the simple concept that all money spent by government must first come from taxpayers, and that government employees really are "servants of the people."
2. Based on total employment (full- and part-time), not FTEs. OCPA's economists use Bureau of Economic Analysis (BEA) data to compare government employment to private-sector employment in Oklahoma, and private-sector FTE data are not available from BEA.
3. For more information on Oklahoma's compensation and employment ratios, see "Oklahoma's Government-Employment Problem Persists" at http://bit.ly/bnYRnz.
4. See endnote 1 above.
In order to calculate the amount of taxes paid, this study utilizes the information provided by "Who Pays? A Distributional Analysis of the Tax Systems in All 50 States," published by the Institute on Taxation and Economic Policy (ITEP), a liberal think tank based in Washington D.C.
ITEP uses a "family income" (FI) concept which is likely very similar to the "adjusted gross income" (AGI) concept used on federal and state individual income tax forms. In order to derive FI, the average private-sector wages and salaries ($37,859) were increased by 30 percent to approximate AGI (according to the Internal Revenue Service, wages and salaries constitute about 70 percent of AGI). The resulting average FI was $49,216 per job in 2008.
The ITEP analysis shows that the effective tax rate for a taxpayer earning $49,216 is 8.9 percent-split 5.7 percent for state taxes and 3.2 percent for local taxes. Overall, the average private-sector job paid $2,802 in direct state taxes and $1,579 in direct local taxes in 2008.
Dividing the average state-government compensation per job ($48,196) by $2,802 yields 17 average private-sector jobs needed to sustain a single state-government job in 2008. Dividing the average local government compensation per job ($46,089) by $1,579 yields 29 average private-sector jobs needed to sustain a single local government job in 2008