DC Region Expected To Lose 8,000 Federal Jobs: Labor Department

FAIRFAX, VA — The number of federal jobs in the Washington, D.C., area is on the decline, which will likely lead to a decrease in the importance of the federal workforce to the region, according to an analysis of the latest employment statistics released by the U.S. Department of Labor.

"Taking a broader and longer view suggests that federal employment in the region is likely to decrease by another 8,000 jobs in the coming quarters. In addition to the likely continued decline, the value of federal jobs for the region is being impacted by the remote work policies of federal agencies," according to an analysis of the statistics by Keith Waters and Terry Clower of the Stephen S. Fuller Institute in George Mason University's Schar School of Policy and Government.

Pre-pandemic, federal employment in the region was already on the decline. As a result of the Budget Control Act of 2011, federal payroll employment dropped from more than 386,000 in 2011 to 361,000 at the beginning of 2013, according to the Labor Department. The decline continued through the remainder of the decade.

However, federal payroll employment did rebound sharply between 2020 and 2022 due to increased temporary hiring for the decennial census and agencies staffing up as part of the federal pandemic response. But, as most of those programs ended, the size of the federal workforce started to shrink again.

In July 2021, the federal workforce in the D.C. region peaked at nearly 380,000, but that number fell to below 370,000 in Jan. 2023, according to the Labor Department.

"Despite the decline, returning to the pre-pandemic share of 10.8 percent of total regional non-farm payroll employment, holding current total payroll employment constant, implies that federal employment in the Washington region will decrease towards 362,200, implying a loss of about 8,000 jobs in the federal sector in the Washington region," Waters and Clower wrote.

While a loss of 8,000 jobs would likely have a negative impact on the region's economy, the value of the federal workforce to the region remains unclear, according to Waters and Clower's analysis.

The data for the Labor Department's statistics is based on input from employer surveys, which reports the place of employment and not the residences of the employees. Some employees may be taking advantage of telework to work remotely outside the Washington, D.C., region, even though their job is reported to be there.

"This implies that an unknown number of federal workers likely live outside of the Washington Region," Waters and Clower wrote. "Thus, even though the region appears poised to continue to shed federal employment, the value of a federal worker has likely already declined."