With the federal government shutdown now two weeks old and counting, the White House announced Wednesday that more than 10,000 federal workers could end up getting fired as a result — more than twice as many firings as the White House originally estimated. It’s the latest in a long string of government layoffs that many worry will have profound effects on D.C.’s economy.
But how screwed is D.C. really? A new program at the Brookings Institution called the DMV Monitor pulls together a ton of data to help answer the question and will publish real-time changes that we’ll also be tracking.
By the Numbers
According to Brookings fellow Tracy Hadden Loh, the D.C. region lost about 17,000 federal jobs between January and June, but that doesn’t take into account contractors and the private sector. The study also found that the unemployment rate in the DMV is nine times the national trend. Additionally, these losses seem to be disproportionally impacting young workers, with DMV internships plummeting 36%.
The Ripple Effect
Beyond federal workers, funding cuts are impacting every part of the DMV’s economy, from non-profits to tech. The innovation economy in particular — for which the DMV is a hotspot — is suffering. Because of the level of uncertainty, Hadden Loh says venture capital no longer wants to invest here and startups are paying the price, something we’re likely to see continue.
It’s Not All Doom & Gloom
Despite these challenges, Hadden Loh says we’re not totally doomed. The base of D.C.’s economy and taxation system is resilient. The Brookings report recommends that D.C. pivot its economy, which the mayor’s office seems to have taken to heart.
We talked with Deputy Mayor Nina Albert Tuesday about the mayor's efforts to diversify D.C.’s industries to be less office-heavy, trying to ensure laid-off federal workers have somewhere to land.
We need to build more housing. We need to diversify the economy. We need to address inequality. Those things are true, but at the same time our [economy] fundamentals are very strong.
Tracy Hadden Loh, Brookings
What DC Is Doing About It
For those who have lived in D.C. a while, the local government's desire to diversify and fear of overreliance on federal jobs is nothing new. Mayor after mayor has stood up to convince the country that we’re more than just a government town. The difference now is the air of desperation in those statements.
Informed partially by the Brookings report, D.C. is making huge investments in sport, entertainment, tech, and other industries they see as key to D.C.’s long-term growth. But the question is, will these efforts be enough to stave off a potential recession?
