Here’s How Federal Government Layoffs Affect The Most People

Key Takeaways

• Washington, D.C., its suburbs and the surrounding areas would be hit the hardest by the ongoing layoffs. Even so, job losses in cities where federal agencies have their headquarters could have a significant effect.
• Oxford Economics economists predict that Washington could lose 2,5% of its jobs by 2025 if the Trump Administration cuts 200,000 federal workers.
• Other vulnerable cities include Baltimore, Kansas City, Missouri, San Antonio, Texas, Ogden Utah, and Memphis Tennessee, where federal employees make up a relatively large percentage of the workforce.

Washington D.C., its suburbs and the surrounding areas would be hardest hit by mass layoffs. However, no major metropolis would escape job losses. 

According to Oxford Economics economists, the number of federal jobs at risk in each major city and the percentage that could be affected by each region is calculated. The Trump administration has already laid-off thousands of federal workers and is aiming to reduce the federal workforce to 75% in order to cut costs.

Oxford’s calculations assume that the administration will layoff 200,000 federal employees in 2025 as part of its cost-cutting campaign. Washington D.C., which stands to lose 18,900 positions or 2.5% of its workforce, would be the most affected.

Baltimore, Kansas City Missouri, San Antonio Texas, Ogden Utah, and Memphis Tennessee are also cities with a high percentage of federal workers.

Not all laid-off workers are going to be unemployed. In the past, federal layoffs showed that 35% went into the private industry, 15% joined state or local government, 10% retired, and 5% became self-employed. Oxford found that 40% of the remaining workers will likely become unemployed. This will increase the unemployment rate by 0.04 percent.

Cuts to the Veterans Administration’s workforce could have a disproportionate impact on places where VA hospitals are the biggest employers. Oxford said that Tampa in Florida, San Antonio, Killeen (Texas), Fayetteville (North Carolina), and Virginia Beach (Virginia) would be the hardest hit.

Atlanta could also be particularly affected by cuts to the Centers for Disease Control. Houston could be affected by layoffs in NASA. Denver could be impacted by layoffs in the Environmental Protection Agency.

The ripple effect of layoffs is also likely to be felt.

"Lost jobs and wages in federal government will also have multiplier effects on the private sector via contractors and local businesses that depend on spending by federal employees," Barbara Denham, lead economist at Oxford Economics, wrote in a commentary. "Lower overall spending in the D.C. metro will particularly affect consumer-facing sectors such as retail and leisure and hospitality."