The Trump administration’s cost-cutting efforts through the Department of Government Efficiency (DOGE) are impacting local economies around the U.S. as federal workers face layoffs and mandates to return to the office for in-person work.
DOGE, formed at the behest of billionaire Trump advisor and donor Elon Musk, has looked to downsize the workforces of federal agencies, as well as to consolidate federal office spaces as central elements of its controversial cost-cutting efforts.
As federal workers are laid off and office spaces shuttered or relocated, those changes have an impact on cities and local economies that have grown around them over the years.
A report by The Wall Street Journal noted that about 80% of the federal government’s non-postal and non-uniformed employees work outside the Washington, D.C., area and profiled DOGE’s impact on Oklahoma City — a metro area with about 30,000 federal workers in a variety of roles who make up almost 4% of the local workforce.
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The Journal noted that the area is home to federal workers involved with food product inspections, maintenance of military aircraft, training new air traffic controllers and staffing federal correctional facilities.
Workers impacted by layoffs and federal workers apprehensive about potentially being impacted by layoffs told the outlet they have cut back on spending. One worker at a federal prison near Oklahoma City said he is delaying plans to buy a new vehicle due to the uncertainty over his job.
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One area resident who lost her job at the Bureau of Indian Education told the outlet she is curtailing visits to restaurants and concert venues, while another local who lost an IRS accounting job said he will face a land payment later this year without that income stream.
Some businesses are seeing positives from the impact of the Trump administration’s requirement that most federal workers return to the office. A parking garage located near federal offices told the Journal it has seen a rise in usage from workers heading back to the office, while restaurants near offices have also experienced an uptick in business.
A pair of military bases in the region — Tinker Air Force Base and the Army’s Fort Sill — employ a significant number of military personnel and civilian employees of the Defense Department. DOGE is reportedly considering making cuts to the department’s civilian workforce, though military roles are not expected to be affected by cutbacks at this time.
The Journal’s report referenced an analysis by Ben Zou, an associate economics professor at Purdue University’s Mitch Daniels School of Business, which found that federal layoffs have downstream economic consequences. In particular, for each job cut at a military base, another 1.2 jobs are lost in the local economy as those affected curb their spending.
“When a military base downsizes, most of its dismissed workers pack up and leave,” Zou told FOX Business. “It can be a very different story if displaced workers choose to stay on in the local economy that now offers fewer job opportunities.”
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