The federal government is experiencing a surge in layoffs, with more than 172,000 job cuts announced in February, according to a report from outplacement firm Challenger, Gray & Christmas. The Department of Veterans Affairs plans to slash 80,000 jobs, while other agencies have also seen significant reductions.
Despite the high number of layoffs, federal workers’ salaries make up only about 1% of gross domestic product (GDP) and less than 5% of total federal spending. Experts argue that cutting these jobs indiscriminately would “substantially damage the economy.”
Federal workers provide critical services, including environmental safety, Medicare and Medicaid administration, and banking oversight. They also drive economic growth by supporting industries such as healthcare and finance.
However, the government’s aging population and growing spending on Social Security and Medicare are driving up costs. Experts suggest that tax breaks and incentives can hinder efforts to reduce spending, as they tend to last forever in the tax code.
The federal civilian workforce has shrunk significantly since 1960, from 3.5% of total non-farm employment to about 1.5%. Cutting these jobs could have far-reaching consequences for the economy and social programs that rely on them.
Source: https://www.marketplace.org/2025/03/06/federal-workers-salaries-represent-less-than-5-of-federal-spending-and-1-of-gdp