Hawaii Ranks Third for Highest Government Employment – And That Impacts the State’s Unfunded Liabilities

Downtown Honolulu
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Downtown Honolulu

Hawaii has one of the nation’s lowest unemployment figures, and a new Gallup Poll shows that might be because a good portion of the workforce is employed by local, state and federal government agencies.

Nearly three out of every 10 employees – or 27.8 percent of employed adults in Hawaii work in a government agency. Hawaii falls just behind the District of Columbia (29 percent) and Alaska (28 percent).


Maryland, Virginia, New Mexico, West Virginia, Louisiana, Mississippi and Washington round off the top 10 states with the highest percentage of government employees.

That compares with Indiana (11.5 percent), Pennsylvania (11.7 percent) and Missouri (12.4 percent) that have the lowest percentage of government workers.

Gallop compiled the report by surveying 200,225 American from January to December 2012.

The annual survey shows the average number of government workers is going down. In 2009, 17.3 of adult employees worked for the government and in 2010, the number was 17.2. In 2011, that number decreased to 16.3 percent and in 2012, dropped further to 16.2 percent.

There has been some change to the rankings of Hawaii and Alaska. In 2011, Hawaii was number one and Alaska number two in terms of states with the highest percentage of government employees, but Hawaii dropped to third place and Alaska’s percentage dropped keeping it in second place because the number of government employees dipped slightly in both states while remaining the same in Washington DC.

Not surprisingly, Washington DC has the highest number of federal workers, with Maryland coming in second and Hawaii third.

Hawaii also ranks second in terms of number of state government employees just behind Alaska and ahead of West Virginia and New Mexico.

According to the most recent U.S. Census data, Hawaii has about 65,000 state and local full time employees with a payroll of aabout $266 million.

Kalbert Young, the state Director of Budget and Finance, and former Maui County Finance Director, said Hawaii government’s high job count is partly due to geography.

“It is very difficult to incorporate efficiencies of scale in operations and labor force, because government (county, state, or feds) really can not maneuver and deploy assets of people or machinery across geographic areas larger than one island.  In my research, I have found the best examples to be at the county levels, looking in particular to the County of Maui and the County of Hawaii.

“County of Maui has four islands in its jurisdiction, but three of the islands are populace and there is a fair amount of duplicative positions (primarily admin) across each island in a number of government functions.  There is clear inefficiencies of asset deployment, because two of the three islands have populations of less than 10,000 people and the main island has more than 100,000 people.  Yet, providing vehicles, offices, machinery, equipment, etc. is limited to the island geography – you can not “share” assets from the larger population to the smaller population locales.”

“Although (Hawaii) county is one single island mass, the separation of the major population centers of Hilo and Kona by vast expanses of unpopulated land area means that that county effectively staffs up two county seats simultaneously.  There is also a fair amount of duplicative resources in order to accommodate the geographic divide.  The statistics are very similar to County of Maui.  I think Alaska would have the same factors as the County of Hawaii and that is probably driving the size of government labor force.”

In looking at the State, Young said the multi-island feature of Hawaii also contributes to the necessity of having more people doing work that other states can do with less people.

“We have courts on every major island in the state.  But, we also have to have jails, prisons, probation officers, prosecutors, admin, etc. to support a multi-island court system, that if this were a mainland state or if all the counties were contiguous, there would be opportunities of scale and efficiencies.”

Another example, would be the public school system, Young said, noting the State provides K-12 educational facilities to a large number of rural remote areas.

“We don’t get the opportunity to mass populations for student enrollment.  Some K-12 schools are providing to population areas less than 10,000 persons (i.e. Hana, Lanai, Molokai, etc.).”

On the federal side, Young believes the reason there is a high concentration of federal employment in Hawaii, is less attributable to geography of the state itself, and more attributable to the geographical location of the state on the globe.

“Hawaii is the farthest outpost of the U.S. and the seat for a fairly high federal system that is regional based.  Federal court system, military defense, agencies, etc.  This is the farthest outreach for the feds, so it does make some sense that their employment contingent is fully staffed in Hawaii.  Also, just the fact that Hawaii is a strategic location for the military means that you would expect a higher concentration of military across all branches in Hawaii as opposed to, say, Idaho.”

In terms of unfunded liabilities, the employment numbers that are required to run Hawaii at the State and County levels definitely has an impact, Young said. Hawaii currently has some $20 billion in unfunded liabilities including the State’s Employee Retirement System and healthcare costs for workers and retirees.

“The consideration that I have always told directors, administrators, elected officials, at the state or county level is that creating programs, necessitates adding positions;  adding positions is not only about increasing payroll, it’s about increasing long-term liabilities for every position that is on the government labor force.  The government and the public need to realize that desiring a program is like owning a pet – it should be entered into as a long-term commitment because it’s a relationship that can not easily be stopped. And once it starts, if it were to end, a number of people in the family are going to be sad and hurt.”






  1. Cuz, I going get won job at da state! I vote fo anykine Democrat, and i get won job fo life in return! Dat won good situation!!

    Republicans going take dat good kine situation away. Gotta keep voting fo Democrat. I like my free kine stuff continue to flow, cuz.

  2. rank and file gov't. workers are facing similar problems as rank and file private sector workers.whether union or non union.they pay taxes,pay bills,struggling to raise a family,paying a mortgage,car payments,putting kids thru school,trying to put food on the table.and i try to remind myself,the gov't. worker also owns private property,and owns guns,they are strong supporters of2nd amendment and the Constituttion.they are my neighbors.they are victims of inflation and bad monetary policies that our gov't. has created.we need to unite and be in solidarity against the ruling classand political class who are enriching themselvesat our expense.these are the ones who making and enforcing policies.

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