In the month since Donald Trump took office, he has not beented time to take drastic measures to reduce the size of the federal workforce.
The president issued an executive order shortly after his assumption requesting all federal officers to return to the office five days a week. Then came the delayed offers of resignation, also called “buying”, which about 75,000 federal workers accepted. Its administration also began the process of dismissal of test federal employees across the country, renowned the agency or longtime employees who have recently been moved or elevated to a new position. About 220,000 federal employees have had less than a year in service completed by March 2024, according to government data.
Before Trump took office, there were approximately 2.4 million federal workers in the country, making up about 1.87% of the entire civil workforce, according to Pew Research Center. But these workers are not evenly distributed in the United States, approximately 20% live in the Grand Washington region, according to a partnership for civil service, a non -profit and non -partisan organization. And federal workers make up about 43.26% of the workforce of the district, according to OPM data collected from the facts in the United States, for non -profit. This number is 4.6% in Maryland and 3.27% in Virginia, although concentration in cities close to DC is probably much higher.
The cities with a large number of federal workers have managed to better time in previous downturns of the economic and labor markets in the past, the economists say FortuneS But what was once an asset has now become a responsibility and federal workers could have pernicious effects on these local economies.
“You are taking a baseball bat to the United States government, and the things that are broken will be released throughout the economy,” says Max Steer, President and CEO of the Public Service Partnership, tells Max Steer, President and CEO of the partnership for public service FortuneS
Less jobs, less expenses
The sudden leap of unemployed federal workers means a stronger demand for roles in the private sector.
Although some dismissed workers will be eligible for unemployment, they will bring less than they have done in their full-time roles, and this assistance is only temporary. While workers are preparing for a long work hunt, they will spend less, which affects the business around them. On the spot like Washington, the consumption habits of federal workers affect things like local restaurants, food trucks and other small businesses.
“All these people will have to reduce food and miss payments with cars and all the things that people have to do when they are unemployed,” says Jesse Rotstein, a professor of work economy at UC Berkeley. “This will have a transfusion effect on other businesses.”
The tide of unemployed people with specialized skills can also force these workers to move away, as they are looking for work elsewhere due to “geographical inconsistencies”, according to Rotstein. “The private sector may have jobs, but they are not in Washington,” he says.
This suggests that the private sector will be hired at all. The common labor market remains strong, but the workers from white collars are increasingly and more voiced about how difficult it is to demand work at the moment. Other Trump policies, such as his decision to impose tariffs on large trading partners such as Mexico and Canada, also led to widespread vibrations over the economy.
“When there is more uncertainty, businesses are more preferable to their hiring and investment,” says Erica Groshen, a senior economy adviser at the Cornell School for Industrial and Labor Relations.
It is still too early to say exactly how these smaller economies will be influenced and the reality for federal workers seems to be changing with each passing day. Although some previous abbreviations have been reversed, it is almost certain.
“We know there are these effects of overflow,” says Harry Holzer, Professor of Public Policy in Georgetown, says Fortune, Referring to local economies with a high percentage of federal workers. “I would foresee some noticeable decline, maybe delayed in some areas.”
However, Rotstein has a darker view. “If you were trying to destroy the US economy, I don’t think you could do a lot better than what they’ve done in the last month,” he says.
This story was originally presented on Fortune.com