Over the past few weeks, national attention has focused on the unprecedented threats of the so-called Department of Government Efficiency (DOGE) to federal government employment. This blog hones in on the potential impact of slashing federal employment in Pennsylvania. Based on a new Economic Policy Institute resource that went live two days go, the map and table below profiles federal government employment in our state by Congressional District.
Federal government employment in Pennsylvania accounts for about 90,000 workers according to EPI, about 1.4% of total non-farm employment in our state. The federal share of total employment by Congressional District varies from 2.3% in the Capitol Region (CD 10) to 0.8% in the Lehigh Valley (CD 7) and Bucks/Montgomery (CD 1). That the highest federal employment share falls in and around Harrisburg, our state capitol, is not surprising. More unexpected is that two of the next-highest federal employment shares, fall in rural parts of the state: the Northeast corner of the state (CD 8) and the Southern Alleghenies (CD 11).
For Pennsylvanians who remember the administration of Governor Tom Corbett, the prospect of large government job cuts brings a sense of déjà vu. Governor Corbett’s first budget cut education spending, counting K-12 and higher education, by about $1 billion. Over the several years, those cuts led to a loss of tens of thousands of jobs in K-12 education alone. Those job losses, in turn, reduced consumption by the workers who lost jobs and their families. End result, as this 2014 blog indicates: Pennsylvania was dead last for job growth from January 2011 to September 2014.
The danger with proposed large-scale federal job losses across the country is not that Pennsylvania will lose ground relative to other states. It is that the entire country could see an erosion in consumer buying power and an economic slowdown. Increases in health care costs for low-income families that result from Medicaid cuts (discussed in our previous blog) will further erode working-class buying power. Further, as a highly regarded conservative analyst, Oren Cass, pointed out recently, extending the Trump tax cuts won’t stimulate the economy. While every additional dollar families spend on health care means one less dollar spent on groceries, rent, heat, or other necessities, the consumption of rich families won’t change much because of the additional money they receive from extending the Trump tax cuts.