Discussion Paper

What Might Cuts to the Federal Government Workforce Mean for the Fifth District?

Abstract: Federal government employment spans the country, but there is a concentration in the District of Columbia and spread through the surrounding counties in Maryland, Virginia, and West Virginia. Historically, the federal government presence has both insulated the region from the effects of economic downturns and also created additional challenges in the case of sequestration in 2013 or during short-lived government shutdowns. Understanding the economy of the Fifth District, therefore, requires sizing and preparing for any adverse economic impact of cuts in federal government employment and spending. Naturally, the impact of cuts depends both on which agencies are affected and the share of employment in those agencies. Across the board, cuts to departments such as the Department of Defense, Department of the Army, Department of the Navy, and Veterans Affairs have the potential for the most impact on Fifth District regions. There are particular counties and areas that would likely be more affected by federal employment declines than others — not surprisingly, most of those are in the areas immediately around D.C., such as Charles County, Md., or King George County, Va. In addition, many of the federal government jobs are relatively well-educated, well-paying jobs, the loss of which could challenge state and local finances.

Keywords: Federal government workforce; economic impact; Fifth District;

Bibliographic Information

Provider: Federal Reserve Bank of Richmond

Part of Series: Regional Matters

Publication Date: 2025-03-04