Today, I presented research on the potential consequences of losing federal jobs as part of the Community Development Research Seminar Series, St. Louis Federal Bank. The title of my talk was “When the good jobs are gone.” This research is in collaboration with Alberto Ortega, Jr.
Alberto and I will answer the following questions:
- Are there differences in the concentration of federal workers by location?
- State, Metropolitan Statistical Area, County
- Rural vs. Urban
- What are the characteristics of federal workers?
- Ethnicity, Race, and Sex
- Household characteristics
- Education
- Insights into consequences for
- Income and wealth
- Family care
- Workforce development
- What are the community development implications and opportunities?
Follow the money
To understand the potential economic consequences of federal job loss, we analyze the income share earned by federal employees across states, metropolitan statistical areas (MSAs), and counties. Since military personnel have less employment autonomy, our estimates exclude their earnings.
When states are ranked by the share of federal employees’ earnings as a percentage of total state earnings, Hawaii ranks third, and New Mexico ranks fourth (see Slide 1). Although these states may not typically come to mind regarding federal employment, their rankings reflect the dependence of federal jobs beyond Washington, D.C..
New Mexico’s position is likely influenced by the number of federal employees working for the Department of the Interior and the Department of Veterans Affairs. In Hawaii, the largest employers of federal workers are the Department of the Interior and the Department of Agriculture.
Source: Calculation by the Women’s Institute for Science, Equity and Race using the 2024 Annual Social and Economic Supplement, Current Population Survey, www.ipums.org
The metropolitan statistical area (MSA) with the highest percentage of federal employee income is California-Lexington Park, MD (see Slide 2). If you’re wondering, “Where is that?” California-Lexington Park is in southern Maryland and is home to the Patuxent River Naval Air Station. Since we have excluded military personnel, our analysis shows that the local economy heavily relies on the earnings of federal employees, who likely support the naval site. Additionally, our estimates show that federal employees earn 65 cents for every dollar earned in the California-Lexington Park MSA. Therefore, any reduction in federal employees in this region will have significant economic repercussions that will affect the entire community.
Source: Calculation by the Women’s Institute for Science, Equity and Race using the 2024 Annual Social and Economic Supplement, Current Population Survey, www.ipums.org
In the coming weeks, I will share more information about the demographics of federal employees. We are particularly interested in analyzing the distribution of occupations and earnings among federal employees, broken down by ethnicity, race, and gender. Our analysis will highlight several potential concerns:
- Increased demand for workforce development training and charitable services
- Economic vulnerability to bankruptcy, foreclosures, evictions, student loan default, and prolonged unemployment
- Decreased wealth due to changes in home values and/or early utilization of retirement and savings.
Stay tuned for more updates!
