Maryland continues to bear the brunt of federal workforce cuts, having lost thousands of jobs since January. With federal employment a cornerstone of Maryland’s economy, local effects are expected to deepen as additional reductions take effect this fall.
In a recent Maryland Matters article, Maryland lost 2,500 federal jobs in August, marking the second straight month the state has led the nation in federal workforce cuts. Since January, Maryland has lost 15,100 federal jobs, nearly 10% of all federal positions located in the state.
Federal employment plays a major role in Maryland’s economy, with more than 158,000 federal jobs based in the state as of 2023. Even larger job declines are expected this fall as deferred resignations take effect, and concerns are mounting about workforce stability and local economic impacts.
From the article:
Many of these people have decades of experience. They’re overqualified for other positions, Pannell said, adding that some federal workers will either have to accept “huge” pay cuts or undergo job re-entry programs — training them for jobs “they’re already greatly experienced at.
As previously covered by MACo, counties, which rely heavily on local income tax revenue, will particularly feel the squeeze with federal job losses:
- Federal job losses in Maryland result in reduced taxable wages.
- Contracting slowdowns could undercut 10% of Maryland’s private-sector GDP.
- Shrinking property tax bases could follow, as reduced federal employment weakens home values and commercial real estate.
- Higher demand for services will strain local governments that are already managing rising costs.
Maryland lawmakers have created short-term loan programs and job resources for displaced workers, but many of these supports rely on federal funding that is also at risk of reduction. According to the article, the August job losses contributed to a rise in Maryland’s unemployment rate from 3.4% to 3.6%, although it remains below the national average of 4.3%.
