US President Donald Trump has taken drastic measures to reduce the federal workforce, impacting local economies and causing uncertainty in the job market.
Since taking office, Trump has issued an executive order requiring federal employees to work five days a week. Over 75,000 workers accepted “buyout” packages, while around 220,000 with less than a year of service were fired. This decision is expected to have devastating effects on local economies, particularly in areas surrounding Washington D.C.
The concentration of federal workers in these regions has historically been an asset during economic downturns. However, economists warn that the layoffs could lead to a ripple effect throughout the economy. “You take a baseball bat to the United States government, and the things that are broken are going to ripple throughout the entire economy,” said Max Stier, president of the Partnership for Public Service.
The impact on local businesses is expected to be significant. With fewer federal workers in the area, consumers will have less spending power, affecting restaurants, food trucks, and small businesses. The labor market remains strong overall, but white-collar workers are voicing concerns about job security. Trump’s policies, such as tariffs on major trading partners, have also contributed to economic uncertainty.
While it is too early to determine the exact effects of these layoffs, experts predict noticeable declines in local economies. Economists warn that this decision could be a recipe for disaster, saying “if you were trying to destroy the American economy, I don’t think you could do much better than what they’ve done in the last month.”
Source: https://fortune.com/2025/02/22/donald-trump-federal-workforce-layoffs-resignations-could-hurt-local-economies-job-markets