During this month’s COG Board of Directors meeting, area business leaders joined elected officials from DC, Maryland, and Virginia on the board to discuss federal workforce cuts and their impact on the region’s economy.
COG Executive Director Clark Mercer opened the discussion by unveiling updates to COG’s Federal Workforce Resources and Data page, now featuring data showing the median earnings of federal workers across the region. According to the U.S. Census American Community Survey, the median earnings for a federal civilian worker is $129,768 in the region’s Metropolitan Statistical Area, which outpaces all other categories of workers. He emphasized that the historically high wages in the DMV have been a cornerstone in maintaining a strong and stable middle class.
Mercer cautioned that a 10 percent cut to the federal workforce, around 40,000 jobs, would equate to a staggering $5 billion blow to the regional economy. He also raised concerns about a potential “brain drain,” warning that displaced workers may choose to relocate permanently. Other states are actively targeting DC-based federal employees with recruitment ads, posing a serious threat to the region’s talent pool.
COG Analysis of American Community Survey, U.S. Census
Alexander Austin, President and CEO of the Prince George’s Chamber of Commerce shared that recent federal cuts are affecting local businesses, with most impacted workers aged 40 to 60. He noted 55,000 homes in Prince George’s County are owned by federal employees. As billions in federal contracts dry up and tariffs raise housing costs, Austin also highlighted a potential silver lining: more federal workers are exploring small businesses or shifting into new industries.
Mark Carrier, Board Chairman of the Northern Virginia Chamber of Commerce (NVC), spoke on the hospitality sector’s vulnerability to economic shifts. With 70 percent of the region’s hospitality tied to federal activity—from employee travel to conventions—Carrier noted a sharp decline in international travel, especially from Canada, and reported hotel occupancy drops as high as 17 percent in recent months. This downturn translates to major losses in tax revenue. Looking ahead, NVC is working with Accenture to develop an economic roadmap in response. Carrier also shared that, despite outreach, the Chamber has yet to meet with Governor Youngkin, but remains hopeful a conversation will happen soon.
Lastly, Shawn Townsend, President and CEO of the Restaurant Association of Metropolitan Washington, shared the toll recent changes are taking on the restaurant industry. A recent survey found 44 percent of restaurant owners fear closure within a year. With fewer people dining out, rising costs, and declining revenue, 50 percent of tipped workers report lower tips, and 85 percent of full-service restaurants anticipate further staffing cuts. Townsend emphasized that each restaurant closure leads to an average loss of 27 jobs.
April’s COG Board meeting underscored a sobering reality: massive cuts to the federal workforce are already reshaping the outlook for the region’s economy.
COG Board Chair and Fairfax County Supervisor Rodney Lusk noted that local governments were once more competitive amongst each other but that the current situation “is going to require us to do things differently."
COG Board members agreed that now more than ever, closer regional collaboration will be essential—both among area governments and with business and community partners— not only to weather this downturn, but to proactively adapt, invest in emerging industries, and position the DMV for long-term resilience and growth.
MORE:
COG Federal Workforce Resources and Data page
Meeting Documents, Livestream