Since the second Trump administration swept into office in January 2025, it has undertaken a range of damaging and destabilizing actions that have weakened the economy, undermined workers, hurt businesses and consumers, and threatened core elements of our democracy. While Trump has targeted numerous Democratic-led states and cities, the Washington, D.C., region has faced acute and prolonged harms since day one. From the first set of executive actions signed on Inauguration Day, the Trump administration has attacked people and businesses in the capital region repeatedly and intensely. These initial actions announced the president’s dubious claims of authority to fire large segments of the federal workforce, eliminate long-standing federal agencies and programs, and begin a campaign of illegal and inhumane mass deportations.  

The Trump administration’s damaging actions have been enabled and abetted by Republican members of Congress. Their passage of H.R. 1, the bill that the White House has referred to as the “One Big Beautiful Bill Act” (OBBBA), amplifies the administration’s mass deportation agenda and shreds critical health care and food supports for lower-income families to finance tax cuts for the wealthy. This funding bill will only cause more pain in the years ahead for Washington, D.C.-area households and throughout the country.

Congress also passed a federal spending bill that constrained the District of Columbia’s ability to spend its own tax revenue (Koma 2025) and a resolution that may force the district to adopt local tax code changes that match the OBBBA, whether the city wants to or not—changes that will jeopardize hundreds of millions of dollars for city programs (D.C. Fiscal Policy Institute 2026).

In this report, we assess the early indicators of the damage of Trump’s actions and their effects on the Washington, D.C., regional economy, with particular attention to effects on workers and the labor market. We focus on this region due to its prominence as an early target of the Trump administration, in part due to its large federal workforce. Additionally, the district’s unique status as a non-state means that its leaders have far less legal authority to resist Trump’s interference than other target areas do.

Throughout this report, unless otherwise indicated, the data describe economic conditions for the Washington, D.C., metropolitan statistical area (MSA), which includes the District of Columbia, four nearby counties in Maryland, six cities and 11 counties in northern Virginia, and one county in West Virginia. We also refer to this region as the DMV (Washington, D.C.; Maryland; and Virginia). While we do not yet have the requisite data to fully and precisely document all the effects of the administration’s actions, we can see clear signals that the regional economy is already struggling, with more severe impacts likely to register in the data soon.

We then explore some of the factors that make other regions particularly vulnerable to significant economic harm from the Trump administration’s agenda. These include counties with large concentrations of federal workers, areas where federal transfer income (such as Medicaid and Social Security) makes up a significant portion of the region’s economic base, and places with significant immigrant populations. Though Trump has largely targeted prominent, Democratic-led areas, many of the regions most susceptible to the harmful economic consequences of the administration’s actions are rural counties, frequently represented in Congress by Republicans.

Trump’s actions in Washington, D.C., have led to reduced employment and rising unemployment

The clearest sign of the harm that the Trump administration’s actions have done to the Washington, D.C., regional economy is the substantial drop in the region’s employment rate. Based on EPI analysis of Current Population Survey data from the Bureau of Labor Statistics, from December 2024 to December 2025, the share of the regional working-age population with a job fell by 3.2 percentage points.1 As shown in Table 1, this compares with a decline of just 0.4 percentage points for the country over the same period. Among prime-age workers (those ages 25–54), the share employed in the DMV fell by 2.7 percentage points, compared with a decline of just 0.1 percentage points for the country overall.

This dramatic drop in regional employment is a direct result of the Trump administration’s relentless attacks on federal government workers, cuts to federal programs and agencies, and their cascading effects on connected regional industries. Prior to Trump’s taking office, federal employees made up 11.2% of the metro area’s total workforce (BLS-CES-SAE 2025).2 Between the end of 2024 and 2025, federal employment in the DMV region fell by more than 53,800 jobs (-14.2%) (BLS-CES-SAE 2026).3 These losses reverberated through the regional economy as affected households pulled back on spending, and many may have even opted to move, as data show the DMV region had the largest increase in home sale listings of any major metro last year (Brookings Institution 2026).

These significant cuts to federal employment, though highly damaging on their own, are only the first layer of the administration’s harm on the regional labor market. The DMV has a non-federal workforce of over three million people (BLS-CES-SAE 2026), many of whom work at firms that consult with, contract with, are funded by, or are otherwise connected to the government.4 The Trump administration has terminated thousands of grants to scientific research institutions (Kozlov, Tollefson, and Garisto 2026) and frozen or delayed funding for tens of thousands of nonprofit organizations, causing those targeted to limit operations or lay off staff (Tomasko et al. 2025). These cuts have also shrunk the funding pool for nonprofit groups, causing budget challenges even for those not previously receiving federal funding, as they must compete with groups previously funded through federal programs that are now scrambling to fill gaps with private support (Barrett 2025). The administration has also moved to cancel contracts with any company that maintains a commitment to DEI standards (Singh 2026). Although these cuts affect organizations everywhere, the DMV is disproportionately vulnerable to the economic harms of attacks on this sector as it has one of the highest concentrations of nonprofits in the country (Friesenhahn 2025). This is evident in the region’s slight dip (-0.3%) in private-sector employment from December 2024 to December 2025, a change from the consistent, albeit slowing, growth that had marked the years following the COVID-19 pandemic. At the national level, private-sector employment experienced slow but still positive change (0.5%) over the same period (BLS-CES-SAE 2026).5

The widespread impact of the administration’s actions can be seen in the breadth of employment declines across racial, ethnic, gender, and age groups in the region. As shown in Table 1, the employment rate fell by at least 2 percentage points for every demographic category of workers in the DMV. Notably, young workers under age 25 (-4.3 percentage points), workers age 55 and older (-3.3 percentage points), men (-3.5 percentage points), and Black workers (-5.9 percentage points) all experienced drops in their employment rates larger than the regional average. For older workers, the above-average decline likely reflects, at least in part, the firings and retirements of many federal employees, including many who had been near retirement age and opted into the so-called “Fork in the Road” deferred resignation program. For young workers, the administration’s funding and programmatic cuts directly reduced many traditional Beltway early-career opportunities (internships, fellowships), while weakness in the broader regional economy simultaneously forced area employers to pull back on entry-level positions.

Still, not all groups have been equally affected by Trump’s actions. As Table 1 shows, Black workers in the DMV region have suffered the largest employment declines, with the share employed falling by 5.9 percentage points in 2025. This is nearly triple the employment drop experienced by white workers (2.0 percentage points) in the region and, notably, more than seven times the employment drop of Black workers throughout the country overall (0.8 percentage points). Again, this is a direct consequence of the administration’s attacks on the federal workforce. Black workers have long tended to make up a larger share of the public sector than they do in the private sector—both in the DMV and across the country. This is because the public sector has historically been a pathway to the middle class for workers of color who face labor market discrimination in the private sector (Maye and Marvin 2025).

Trump’s massive cuts to federal employment have also rapidly undone what had been considerable progress in shrinking the regional Black-white employment gap. Figure A shows the employment rate of DMV workers, overall and by race/ethnicity, since the end of 2018. The rapid drop in the Black employment rate since the start of President Trump’s second term is striking, bringing the regional Black employment rate back down to its pandemic-era low. It is also notable that before that drop began, Black workers in the region were employed at essentially the same rate as their white counterparts—the only time in the last two decades when that occurred. These losses in employment will exacerbate existing racial and gender inequity across wages, poverty, and unemployment (Markoff and Zielinski 2026; Zielinski 2025; Busette and Elizondo 2022).

Recent increases in the DMV’s overall unemployment rate underscore the damage Trump is doing to the region. The non-seasonally adjusted unemployment rate jumped more than a full percentage point, from 3.1% in January 2025 to 4.4% in January 2026—more than four times the increase in the national figure. (Importantly, this increase understates the weakening of the area labor market, as the BLS estimates the DMV labor force shrank by 3% over the same period—meaning that many workers who would have been counted as unemployed simply left the area labor force.) For comparison, the national non-seasonally adjusted unemployment rate increased by less than half a percentage point, moving from 4.4% in January 2025 to 4.7% in January 2026 (BLS-LAUS 2026).

These numbers do not capture the full extent of the economic downturn in the DMV area, nor can they give us precise insight into where the pain has been most acutely felt. The administration’s violent deportation agenda, for example, will lead to a drop in immigrant and U.S.-born Hispanic workers’ employment, but resulting changes in Hispanic employment rates may be muted by the corresponding shrinking of the overall Hispanic population (Zipperer 2025). In other words, while the overall Hispanic population in the U.S. may fall dramatically in coming years, the ratio of remaining employed workers to remaining total population may stay somewhat consistent. This will mask the true scale of the economic and social harm being done to immigrant communities in the DMV and across the country.

It is also difficult to fully quantify how the deployment and continued presence of National Guard troops, violent immigration actions, and other authoritarian, fear-inducing tactics have impacted D.C.-area businesses, workers, and families, particularly in neighborhoods with predominately Black and Latino populations. Early data show regional declines in tourism, consumer spending, and foot traffic; harder to capture are the emotional and long-term economic consequences (Montgomery 2025; Hadden Loh and Haskins 2025; Sachs and Cocco 2025). Other recent analyses estimate similar economic harms in cities where targeted federal immigration enforcement actions have been aggressively deployed (Rosenthal and Sojourner 2026). A full accounting of the Trump administration’s harms on the Washington, D.C., region will take years to document.

Other localities should brace for similar consequences

Some of the Trump administration’s actions and their acute consequences are unique to the DMV, a function of the region’s high concentration of federal employees and government contractors, as well as the District of Columbia’s lack of statehood and full constitutional rights. However, the anti-government attacks the administration has unleashed on DMV-area households, workers, and businesses will have cascading consequences for communities throughout the country. The effects of the administration’s authoritarian attacks on the civil service, democratic institutions, and immigrants (Human Rights Watch 2026) that first registered across the DMV should be viewed as a preview of the consequences that will be felt in other regions. While no locality will be spared, regions particularly at risk include those with large shares of government workers (especially federal workers, but state and local government workers too), localities in which federal funding and social safety net programs make up a large portion of total area income, and those with large immigrant populations.

Trump’s attacks on the federal workforce will harm communities that rely on their employment

The day Trump returned to power in January 2025, he began attacking the federal workforce, first by moving to reclassify tens of thousands of federal employees to make it easier to fire and replace them with political loyalists (EPI 2026c), and then by stripping more than one million federal workers of their collective bargaining rights (EPI 2025a). The Trump White House subsequently worked feverishly to slash federal employment, attempting large and chaotic reductions in force, shuttering entire agencies, and coercing tens of thousands of staff to resign, among many other attacks (Poydock 2025). As of March 2026, the administration’s actions have reduced nationwide federal government employment by over 350,000 (11.7%) since January 2025 (Gould 2026).

Though federal workers make up a sizeable share of the DMV’s workforce, over 80% of federal workers live outside the region (Partnership for Public Service 2024). For instance, in Alaska, Hawaii, and New Mexico—states that are home to large swaths of federal and Native land, military bases, and federal research institutions—federal workers make up at least 4.5% of total employment (EPI 2025c). Within states, federal workers tend to be concentrated in specific localities. For instance, in Apache County, Arizona, which is largely made up of the Navajo Nation and the White Mountain Apache Reservations, lands that extend beyond county lines, the federal government employs 12% of the county’s workers, more than double the next most significant county for federal worker employment in the state (EPI 2025c). There are 22 U.S. counties, spread across the South, Midwest, and West Census regions, where federal workers comprise at least 10% of the county’s workforce (see Table 2).

In these counties and elsewhere, federal workers are the backbone of the regional economy, both through the essential services they provide and through their contributions to the local economy. Trump’s attacks simultaneously threaten federal workers’ livelihoods and the economic health of communities in which these workers’ spending on goods and services makes up a large share of economic activity in the region. In Apache County, Arizona, civilian government workers’ earnings comprise 11.7% of total economic activity in the county (see Table 3)—roughly the same as their share of overall county employment. However, in some counties, federal employees’ earnings are a disproportionate share of the regional economic base. For instance, in Leavenworth County, Kansas, where federal employees make up 10.0% of employment (Leavenworth has a large federal prison), federal civilian earnings comprise 22.1% of total income in the county.

The effects from lost federal jobs and income in these regions could be devastating. Some of these communities are places that have already faced historic disinvestment and in which there are few local employment opportunities that can match the quality of federal government jobs. These jobs are historically stable, good quality, union jobs that offer a pathway to the middle class, particularly for workers without a college education.6

Regions highly dependent on federal revenue will also suffer from a reduction in services and a loss of income

Beyond the harm to localities from reductions in the federal workforce, localities that are particularly reliant on federal government revenue and services will bear the consequences of Trump’s actions most acutely, though no locality will be spared from harm. For example, the Trump administration has announced or considered $23 billion in cuts to federal clean energy projects in nearly every state (CATF 2025) and $8 billion in cuts to colleges and universities that will impact every state’s economy (Bedekovics and Ragland 2025). Trump’s 2025 budget bill also made massive cuts to federal safety net programs that millions of low-income households rely on in order to finance tax cuts for the wealthiest households and corporations.

Funds from federal programs such as SNAP, Medicaid, and other social programs not only help struggling families make ends meet, they also comprise a significant share of a locality’s “economic base,” the amount of money circulating in that region, as shown by sociologist Robert Manduca in a recent working paper (2025). Indeed, an often-overlooked benefit of Medicaid coverage is its role as a source of income for low-income households (money they would have had to spend on medical care in the absence of Medicaid). For the bottom 20% of households in the U.S., Medicaid comprised 70% of their total money income, based on recent data from the Congressional Budget Office (Bivens, Wething, and Morrissey 2025). In fact, government transfers such as Social Security, Medicare, and Medicaid collectively made up 40% of the economic base of U.S. regions in 2022 (Manduca 2025). Substantial cuts to government social programs that support low-income households could reduce the economic base of these localities, at a scale equivalent, in many cases, to the loss of entire private industries in those areas.

Without deliberate intervention by state lawmakers to offset lost federal revenues, localities in every state face dire economic losses, but states particularly reliant on government transfers will suffer most. For instance, take Clay County, West Virginia, which is represented in Congress by Rep. Carol Miller (R-WV01), who voted in support of Trump’s budget bill (Miller 2025). Clay County’s poverty rate is more than double the national rate, and its per capita income is half the national amount (U.S. Census 2024a). Of the 10 U.S. counties that rely most on each of the largest federal social insurance programs (Medicare, Medicaid, SNAP, and Social Security) as a share of their economic base, Clay is the only county in the country to show up three times (see Table 4). Federal government transfers in the form of Medicare, SNAP, and Social Security payments comprise 57% of Clay County’s economic base, 20 times the share comprised by the earnings of every private industry in the county combined. Alaska, Arizona, Florida, Georgia, Kentucky, Tennessee, and West Virginia all have at least three counties that are ranked in the top 10 in the country for their reliance on a given social safety net program as a share of the county’s economic base (see Table 4).

Localities that have significant shares of federal workers and rely heavily on federal government transfers may face particularly significant consequences as a result of Trump’s attacks on the federal workforce and the Republican budget bill’s cuts to essential social safety net programs. For example, in Rio Arriba County, New Mexico, and Apache County, Arizona, federal government workers make up 16.1% and 12.0% of all workers in the county, respectively (EPI 2025b). At the same time, both counties are ranked in the top-10 counties most reliant on federal government transfers—Apache is #2 for Medicaid, and Rio Arriba is #10 for SNAP. In Apache County, federal government transfers account for three-quarters (76.9%) of the county’s economic base, and the earnings of federal government civilian workers account for 11.7%—the Navajo Nation Tribal Government is the county’s largest employer (NACOG 2023). Meanwhile, private earnings account for a mere 2.8% of the county’s economy. In Apache, Trump’s cuts to both the federal workforce and federal government programs mean that the federal government may be unable to fulfill its legal obligations to tribal communities (Brown 2025) that have faced decades of disinvestment and depressed economic outcomes resulting from historic land theft and forced assimilation. Apache County’s poverty rate of 31.2% (AZ Economics 2026) is nearly triple the national rate of 11.1% in 2023 (Shrider 2024).

Trump’s anti-immigrant crackdown and deportation agenda hurt localities with large immigrant populations

Trump has launched a campaign of terror against immigrant communities, communities of color, and those who stand with them. Last summer, Trump federalized local police and deployed thousands of federal troops to diverse cities with large immigrant populations (Kim 2025). Though Washington, D.C., may have experienced the most visible federal troop presence, a function of the district’s lack of statehood and the president’s unchecked authority to mobilize the National Guard there (Dallas 2025), Los Angeles was the first city Trump targeted after public opposition to aggressive immigration raids (Kim 2025). It was soon followed by Washington, D.C.; Memphis, Tennessee; Portland, Oregon; New Orleans, Louisiana; Minneapolis, Minnesota; and Portland, Maine.

These attacks are characteristic of an authoritarian playbook that includes forcing the leaders of diverse, opposition-led communities to bend to the strongman government’s will (McManus, Benson, and Herman 2024). Minneapolis, home to a large immigrant population, was subjected to an unprecedented immigration crackdown that drew widespread protests (Boone 2026). During “Operation Metro Surge,” as it was called, federal immigration enforcement officials made 4,000 arrests and killed two U.S. citizens. Though the true toll of this violent operation may never be fully quantified, initial economic data show clear cause for concern. A recent analysis estimated that Trump’s immigration crackdown has led to a 2.9% decline in consumer spending in Minnesota over a single month—the equivalent of the state’s economy losing $626 million (Rosenthal and Sojourner 2026). Relative to overall consumer spending, the food and accommodation sector (which employs a large share of immigrant workers) saw the most significant decline in January 2026—3.8% or a $46 million reduction in economic activity. Researchers also estimated that nearly 3% of workers in the Minneapolis-Saint Paul region were unable to work during the occupation, resulting in a loss of over $100 million in wages (Sojourner and Rosenthal 2026).

Trump’s deportation agenda will continue to destabilize local communities and result in job losses for immigrant and U.S.-born residents alike (Zipperer 2025). Though immigrants live in counties across the U.S., coastal urban areas tend to have the largest shares of foreign-born residents. Counties with the largest foreign-born populations include Miami-Dade, Florida; Queens, New York; Aleutians, Alaska; and Hudson, New Jersey (see Table 5). Counties with relatively large shares of immigrants may see particularly acute harms from aggressive immigration enforcement.

Communities face overlapping economic threats from attacks on federal workers, the social safety net, and immigrants, but state and local lawmakers can resist them.

The Trump administration’s attacks on the federal workforce, the social safety net, and immigrant communities are designed to exacerbate economic precarity in many communities that are already struggling (Bivens 2026). The implementation of Trump’s authoritarian agenda in the DMV region may be the first, clearest, and in some cases most direct manifestation of its harms, but other localities across the country—particularly those with large federal workforces, those that are heavily dependent on federal revenue and those with sizeable immigrant populations—are far from immune, and many will suffer as much, if not more, from this agenda.

While state and local leaders cannot stop federal attacks, they do have the power to resist Trump’s agenda by improving state labor standards (EPI 2026b), advancing protections for immigrant workers (Díaz and Whitaker 2026), investing in the public-sector workforce (Bivens and Shierholz 2026), and using progressive tax policies (Austin and Davis 2025) to stabilize funding for critical social programs and other investments that workers, families, and communities need.

Notes

1. Throughout this report, unless explicitly noted, the source for all employment rate data is the authors’ analysis of Current Population Survey data (EPI 2026a). We compare an average of calendar year 2025 with calendar year 2024 in order to have adequate sample sizes for the noted demographic groups.

2. Employment level by industry and sector data come from the authors’ analysis of the Bureau of Labor Statistics’ Current Employment Statistics (CES) State and Metro Area (SAE) data.

3. These numbers are calculated using monthly totals rather than annual averages. A quarterly comparison of 2025Q4 to 2024Q4 finds roughly the same results—employment fell by 52,600 jobs (13.9%). The quarterly analysis omits October in both years to maintain an apples-to-apples comparison, accounting for missing data due to the government shutdown that began in October 2025 and the subsequent lapse in Bureau of Labor Statistics funding.

4. The non-federal workforce includes private sector workers as well as state and local government employees.

5. These numbers are calculated using monthly totals rather than annual averages. Quarterly comparisons of 2025 Q4 to 2024 Q4 produce similar results—private sector employment fell by 0.1% in the DMV and grew by 0.7% nationally. The quarterly analysis follows the methodology outlined in note 2.

6. On average, federal workers with advanced degrees typically earn less in wages and total compensation than their private-sector counterparts. Federal workers without an advanced degree typically earn more than their private-sector counterparts and have access to retirement benefits that have become less common in the private sector (CBO 2024).

References

Austin, Sarah, and Carl Davis. 2025. The Wealth Proceeds Tax: A Simple Way for States to Tax the Wealthy. Institute on Taxation and Economic Policy, October 2025.

AZ Economics. 2026 “Apache County, Arizona.” U.S. Economic Research. Accessed April 2026.

Barrett, William P. 2025. “America’s Top 100 Charities: A Year of Pain After Trump Cuts.” Forbes, December 12, 2025.

Bedekovics, Gréta, and Will Ragland. 2025. Mapping Federal Funding Cuts to U.S. Colleges and Universities. Center for American Progress, July 2025.

Bivens, Josh. 2026. The Trump Administration’s Macroeconomic Agenda Harms Affordability and Raises Inequality. Economic Policy Institute, February 2026.

Bivens, Josh, and Heidi Shierholz. 2026. “You Can’t Starve the Public Sector to Excellence.” Working Economics Blog (Economic Policy Institute), February 27, 2026.

Bivens, Josh, Hilary Wething, and Monique Morrissey. 2025. Cutting Medicaid to Pay for Low Taxes on the Rich Is a Terrible Trade for American Families. Economic Policy Institute, February 2025.

Boone, Rebecca. 2026. “A Timeline of Trump’s Immigration Crackdown in Minnesota.” PBS Newshour, February 13, 2026.

Brookings Institution. 2026. “Active Residential For-Sale Listings,” DMV Monitor. Last updated February 18, 2026.

Brown, Alex. 2025. “For Indian Country, Federal Cuts Decimate Core Tribal Programs.” Stateline, March 4, 2025.

Bureau of Labor Statistics, Current Employment Statistics State and Metro Area (BLS-CES-SAE). Various years. Public data series accessed through the CES State and Metro Area Databases and through series reports. Accessed April 2026.

Bureau of Labor Statistics, Local Area Unemployment Statistics (BLS-LAUS). Various years. Data from the LAUS are available through the LAUS database and through series reports. Accessed April 2026.

Busette, Camille, and Samantha Elizondo. 2022. “Economic Disparities in the Washington, D.C. Metro Region Provide Opportunities for Policy Action.” Commentary, Brookings Institution, April 27, 2022.

Clean Air Task Force (CATF). 2025. “The High Cost of Retreat: Impacts of Department of Energy Project Cuts.” Clean Air Task Force, November 21, 2025.

Congressional Budget Office (CBO). 2024. Comparing the Compensation of Federal and Private-Sector Employees in 2022. Congressional Budget Office, April 2024.

Dallas, Kelsey. 2025. “The President’s Power to Deploy Troops Domestically: An Explainer.” SCOTUSblog, October 28, 2025.

D.C. Fiscal Policy Institute. 2026. “Congressional Interference Will Cost D.C. Nearly $700 Million in Local Revenue and Jeopardize Efforts to Reduce Child Poverty.” D.C. Fiscal Policy Institute, February 4, 2026.

Díaz, Marisa, and Mimi Whitaker. 2026. How States and Localities Can Strengthen Workplace Protections for Immigrant Workers. National Employment Law Project, January 2026.

Economic Policy Institute (EPI). 2025a. “Executive Order on ‘Exclusions from Federal Labor-Management Relations Programs.’” Federal Policy Watch (Economic Policy Institute), December 17, 2025.

Economic Policy Institute (EPI). 2025b. How Many Federal Employees Live in Your State? Economic Policy Institute.

Economic Policy Institute (EPI). 2025c. “New Resource Calculates How Many Federal Workers Live in Every State, County, and Congressional District” Economic Policy Institute (press release). March 3, 2025.

Economic Policy Institute (EPI). 2026a. Current Population Survey Extracts, Version 2026.3.11, https://microdata.epi.org.

Economic Policy Institute (EPI). 2026b. Holding the Line: State Solutions to the U.S. Worker Rights Crisis. Economic Policy Institute.

Economic Policy Institute (EPI). 2026c. “OPM Finalizes Regulation Enabling Firing Federal Employees for Political Reasons.” Federal Policy Watch (Economic Policy Institute), March 4, 2026.

Friesenhahn, Erik. 2025. “Nonprofit Organizations: State and Regional Employment Trends.” Monthly Labor Review (U.S. Bureau of Labor Statistics), March 2025. https://doi.org/10.21916/mlr.2025.6.

Gould, Elise. 2026. “Attacks on the federal workforce continue (down 18k jobs in March).” Bluesky, @elisegould.bluesky.social, April 3, 2026, 9:01 a.m.

Hadden Loh, Tracy, and Glencora Haskins. 2025. Consumer Spending and Visitor Demand in the Washington, D.C. Region Are Dropping. Brookings Institution, December 2025.

Human Rights Watch. 2026. “Sliding Towards Authoritarianism?” January 2026.

Kim, Juliana. 2025. “Trump Says National Guard Will Soon Go to New Orleans. Here’s the Latest.” NPR, December 3, 2025.

Koma, Alex. 2025. “Here’s How D.C. Solved the Billion-Dollar Budget Problem Congress Created.” WAMU, October 22, 2025.

Kozlov, Max, Jeff Tollefson, and Dan Garisto. 2026. “U.S. Science After a Year of Trump.” Nature 649 (January): 812–815.

Lynch, Teresa M., and Robert Manduca. 2024. “Beyond Local and Traded: Evidence for a Third Industry Market Area Type and Implications for Regional Economic Development.” Economic Development Quarterly 38, no. 3: 183–194, July 2024. 

Manduca, Robert. 2025. Financial and Transfer Income as Components of the Regional Economic Base. Washington Center for Equitable Growth, June 2025.

Markoff, Shira, and Connor Zielinski. 2026. Chronic Racial Inequality Holds Back Workers and Equitable Economic Growth. D.C. Fiscal Policy Institute, March 2026.

Maye, Adewale A., and Stevie Marvin. 2025. “Trump Attacks on Federal Agencies Have Steep Implications for Black Workers.” Working Economics Blog (Economic Policy Institute), April 10, 2025.

McManus, Allison, Robert Benson, and Dan Herman. 2024 “The Dangers of Project 2025: Global Lessons in Authoritarianism.” Center for American Progress, October 2024.

Miller, Carol. 2025. “Miller Votes to Send the One, Big, Beautiful Bill to President Trump’s Desk” (press release). Office of Congresswoman Carol Miller, West Virginia’s First District, July 3, 2025.

Montgomery, Mimi. 2025. “Trump Crackdown Is Affecting D.C.’s Image and Tourism Numbers.” Axios, August 29, 2025.

Northern Arizona Council of Governments (NACOG). 2023. “Business, Jobs, and Industry Highlights for Apache County.” Northern Arizona Council of Governments, November 20, 2023.

Partnership for Public Service. 2024. Beyond the Capital: The Federal Workforce Outside the D.C. Area. March 2024.

Poydock, Margaret. 2025. “How Trump Has Dismantled the Federal Workforce in His First 100 Days.” Working Economics Blog (Economic Policy Institute), May 23, 2025.

Rosenthal, Aaron, and Aaron Sojourner. 2026. The Economic Impact of Operation Metro Surge in January 2026: A Synthetic Difference-in-Differences Analysis. North Star Policy Action, February 2026.

Sachs, Andrea, and Federica Cocco. 2025. “D.C. Tourism Was Already Struggling. Then the National Guard Arrived.” Washington Post, August 29, 2025.

Shrider, Emily A. 2024. Poverty in the United States: 2023. United States Census Bureau, Report Number P60-283, September 2024.

Singh, Kanishka. 2026. “Trump Signs Executive Order Asking Federal Contractors to Eliminate DEI.” Reuters, March 26, 2026.

Sojourner, Aaron, and Aaron Rosenthal. 2026. Impact of DHS Agent Surge on Minneapolis-Saint Paul Metro Area Labor Outcomes. North Star Policy Action, February 2026.

Tomasko, Laura, Hannah Martin, Katie Fallon, Mirae Kim, Lewis Faulk, and Elizabeth T. Boris. 2025. How Government Funding Disruptions Affected Nonprofits in Early 2025: Nationally Representative Findings from the Nonprofit Trends and Impacts Study. Urban Institute, October 2025.

U.S. Census Bureau. 2024a. “American Community Survey 5-Year Estimates: Retrieved from Census Reporter Profile Page for Clay County, WV.” Accessed April 14, 2026.

U.S. Census Bureau. 2024b. “U.S. Foreign-Born Population: 2018–2022 American Community Survey, 5 Year-Estimates (Table B05006).” Accessed April 14, 2026.

Zielinski, Connor. 2025. “Inequality Remained Extreme in 2024 as D.C. Backslid on Poverty.” DCFPI Blog (D.C. Fiscal Policy Institute), September 15, 2025.

Zipperer, Ben. 2025. Trump’s Deportation Agenda Will Destroy Millions of Jobs: Both Immigrants and U.S.-Born Workers Would Suffer Lob losses, Particularly in Construction and Child Care. Economic Policy Institute, July 2025.

The American Rescue Plan Act (ARPA) was enacted on March 11, 2021. Among other provisions, ARPA allocated $350 billion for State and Local Fiscal Recovery Funds (SLFRF). SLFRF was a recognition of the stark reality that the COVID-19 pandemic had wreaked havoc on state and local government finances (McNicholas, Bivens, and Shierholz 2020). SLFRF was also a reflection of lessons that policymakers learned from recent history. In the years following the Great Recession, inadequate fiscal support to state and local governments resulted in massive budget cuts, public-sector job losses, and reduced spending that dragged on the economy, delaying economic recovery by years (Shierholz and Bivens 2013). With the prospect of potentially devastating COVID-19-induced state and local budget shortfalls, Congress and the Biden administration made the decision to spend at the scale of the problem by making sure SLFRF was large enough to meet its recipients’ needs.

Of the $350 billion in fiscal recovery funds, $195.3 billion went to state governments, $65.1 billion to counties, $45.6 million to cities, $20 billion to tribal governments, $4.5 billion to territories, and $19.5 to small units of local government, mostly towns and villages. They could use the funds for five purposes: responding to the public health emergency caused by COVID-19; responding to the negative economic impacts of COVID-19; providing premium pay to “essential” workers; improving water, sewer, and broadband infrastructure; and replacing public-sector revenue lost by the economic downturn that accompanied COVID-19. Recipient governments had until December 31, 2024, to obligate those funds and until December 31, 2026, to spend them.

By any objective assessment, SLFRF was a transformative success. It averted a potential crisis. It empowered state and local leaders to address long-standing community needs. It helped millions of working families. It saved lives during the COVID-19 pandemic. The design and implementation of SLFRF offer many important lessons to future policymakers.

This report will highlight the smart design of SLFRF, which made it well positioned to address the needs of state and local governments in 2021 and beyond. The report will also note ways in which future policymakers could improve upon SLFRF’s design. The report will describe how SLFRF funds were deployed, showcasing the breadth and variety of uses to which they were put. State and local fiscal recovery funds were a vital part of the U.S. economic recovery post-2020. They provide a shining example of what government can achieve when it has adequate resources, and when the needs of communities and families are the main drivers of investment decisions.

SLFRF played a vital role in preventing a second Great Recession

The pandemic recession that began so suddenly in March 2020 was the biggest economic shock the country has seen since the Great Recession that started in 2008. Comparing the distinctly different policy responses to those two crises demonstrates how important SLFRF was to speeding the economic recovery and to preventing a second Great Recession.

First, SLFRF was vital in preserving and rebuilding the public-sector workforce. In the wake of the Great Recession, state and local governments faced devastating budget cuts that resulted in significant reductions in staffing and services. All faced fiscal crises because of sharp revenue declines caused by the Great Recession, but public services were further strained in many states by deliberate policy decisions, predominantly by Republican-controlled state governments, to cut taxes and slash public services (Cooper, Gable, and Austin 2012). State and local government employment peaked in July 2008, then fell for five straight years. It took a total of 11 years to reach July 2008 levels again (Cooper 2020). By contrast, the peak in state and local governments jobs before the pandemic was in February 2020. By October 2023—just three years and eight months later—state and local public sector employment had fully recovered to pre-pandemic levels.

In the first year following the passage of ARPA, there is evidence that the pace of a state’s SLFRF spending was positively correlated to the recovery of its public workforce:

Table 1

After that, the direct correlation between SLFRF spending and public-sector jobs faded, but that is hardly surprising, given all the other variables that impact job markets.

Second, this rapid recovery mirrored the recovery of the overall job market. The typical U.S. state needed 77 months after the start of the Great Recession for its job numbers to recover; it only took 29 months after the beginning of the COVID-19 pandemic for the same level of recovery. Of course, SLFRF was hardly the biggest factor in the overall economic recovery, but Cooper (2020) has shown that disinvestment in the public sector drags on growth in the private sector as well, and on economic growth overall. SLFRF supported conditions that made the private-sector economic recovery possible.

Third, SLFRF allowed states and localities to enact programs of social insurance and income support that directly responded to immediate community needs. In just the first two years of SLFRF’s operation alone, more than 4.5 million households received mortgage, rent, or utility assistance. Emergency programs offered housing to people who had been displaced by the pandemic and direct government assistance to food pantries and other programs that helped people facing food insecurity. These programs were valuable tools for helping working families in need.

Fourth, SLFRF has helped state and local governments and communities become more resilient against future downturns. Many states upgraded their unemployment insurance (UI) systems to make it easier to cope with an influx of claimants in the future. Some local governments created greater tenant protections and used recovery funds to give tenants facing eviction the right to free legal counsel. Several cities invested in pre-apprenticeship programs to help people in underserved communities gain access to high-quality infrastructure and climate jobs. These investments and others like them will help state and local governments to quickly distribute social insurance benefits when the next crisis hits and provide additional safety for working families put in jeopardy through job loss, illnesses, or natural disasters. (Kamper 2025).

SLFRF’s innovative program design meant funds could be used where they did the most good

The SLFRF program had two unusual characteristics that helped make it successful.

First, unlike previous iterations of state and local aid, SLFRF funds went directly to individual state and local governments. While payments to smaller cities were distributed first to states and then passed on to those cities, states were prohibited from imposing conditions on that distribution and could not hold back the payments; their role was purely administrative.

On previous occasions when federal money was allocated to local governments, it was much more common for the state government to hold federal aid on behalf of local governments. This was, for example, the mechanism behind the COVID-19-era financial assistance to school districts: the Elementary and Secondary Schools Emergency Relief Fund (ESSER, which had three iterations in 2020 and 2021, called ESSER I, ESSER II, and ESSER III respectively). A state’s department of education held ESSER funds and only parceled them out to school districts after the district had made a qualifying expenditure. The districts were not free to spend ESSER funds on their own. With SLFRF, however, recipients received funds before they needed to make expenditures and had complete control over how to use them.

This leads to a second important characteristic of SLFRF: Recipients were given broad latitude in how to use their funds. Under the legislation and the rules put out by the U.S. Department of the Treasury, SLFRF could be used for:

1. responding to the public health emergency caused by COVID-19
2. responding to the negative economic impacts of COVID-19
3. providing premium pay to “essential” workers
4. improving water, sewer, and broadband infrastructure
5. replacing public-sector revenue lost by the economic downturn that accompanied COVID-19

In 2023, the eligible uses for local governments were broadened to include government-built (or renovated) housing, surface transportation projects, and natural disaster relief, though in the end only a small share of recovery funds was used for those purposes.

Treasury rules also made the process simpler for smaller local governments by allowing up to $10 million to be used as public-sector revenue replacement without having to account for specific losses of funding—the SLFRF equivalent of the standard deduction on one’s taxes. Those rules also made clear that “negative economic impacts” could include existing inequities that predated the pandemic, such as long-standing racial employment and wage gaps (Economic Policy Institute 2025).

The combination of these two characteristics—state and local governments had the money within their control before making spending decisions, and great latitude in how to use it—meant that recipients could tailor the focus and pace of SLFRF spending to meet particular local needs. Given the extremely fluid state of the pandemic and the economy when ARPA was passed, this was the right decision to meet the pressing needs of the COVID-19 crisis. Overly prescriptive rules or additional bureaucratic hurdles to accessing and disbursing funds would have made it much harder for state and local recipients to respond rapidly to their specific needs.1

Lessons to apply for future policy design

Despite the great freedom given to recipients to use SLFRF in ways that best met their needs, of the roughly 31,000 local government recipients, almost 600 local government recipients did not report using their fiscal recovery funds at all and a further 600 reported using less than 99%. Another 220 local governments failed to file a single report on their use of fiscal recovery funds, and 1,089 more have been delinquent in filing for at least a year.

At least part of the explanation is that while ARPA guidance allowed for fiscal recovery funds to be used for myriad reasons, recipients (especially smaller local governments) with little experience in receiving money directly from the federal government often struggled to understand Treasury rules on allowed uses of funds. Unlike state governments with experienced personnel deeply versed in Treasury’s complex rules and how to navigate them, many local governments had no such in-house expertise. Advocacy organizations reported, again and again, that even in 2024, as the deadline to obligate ARPA funds was approaching, many local policymakers were still raising questions about how funds could be used and what was allowed (Rochford, Bauer, and Wallace 2024).

Relatedly, Treasury officials who talked with EPI noted that many of the smallest local governments did not have a website or internal email system. Because all SLFRF reporting was supposed to be done electronically, some of these recipients struggled to properly report their expenditures. Sometimes the departure of a single municipal official created significant problems because that person was the only one who knew the electronic passwords.

An abundance of reports from across the country make clear recipients struggled to choose from among many appealing options, creating a kind of paralysis of choice. This is completely understandable; the needs communities were facing at this time were myriad and diverse, and prior to SLFRF, most local government officials had likely never had access to such flexible resources before then.

These challenges were exacerbated because the Treasury Department made a conscious decision not to offer specific technical assistance regarding recipient governments’ possible uses of fiscal recovery funds. When local government officials reached out to Treasury to seek guidance on whether a particular idea was within the scope of the law, Treasury rarely offered definitive answers. This was understandable given that more than 31,000 governmental units received their own fiscal recovery funds; Treasury could not possibly handle detailed queries from more than a fraction of them. What this meant, though, is that many opportunities to use fiscal recovery funds in innovative and imaginative ways were missed. Many local governments chose caution over ambition, out of fear that particular uses of the funds would not be permitted and the funds rescinded.

To prevent a similar situation in the future, policy designers might do well to study Colorado’s Regional Grant Navigator program. Colorado chose 13 community and nonprofit organizations across the state to help local governments find ways to best access funds from the 2021 Infrastructure, Investment and Jobs Act and the 2022 Inflation Reduction Act. These navigators helped local governments understand the complex regulations around the laws, helped them design proposals to apply for funding, and offered advice on which programs might be best suited to the needs of those communities (Colorado n.d.). A similar model might allow local governments to get unbiased and timely assistance from organizations committed to helping them make the most of their funds.

A final challenge of the SLFRF policy design was the lack of clear definition of what “obligating” the funds meant. As advocates, policymakers, and others reported throughout 2022, 2023, and 2024, many local governments understood “obligation” to mean something similar to “budgeting” or “allocating”—making a formal decision as to how to use the funds (Kamper 2024). Recipients unfamiliar with the language used by Treasury could and did make that mistake. It was not until May of 2024 that Treasury explicitly stated in a webinar that “obligating” funds is not the same thing as budgeting (Treasury 2024). “Obligation” required not just a budgetary decision, but concrete steps to implement the decision, such as signing a contract with a vendor or an interagency agreement to send the funds to a particular department. Future fiscal recovery efforts should be more conscious of the need to clearly define terms, especially when plain-language definitions may not match Treasury’s technical definition.

How were fiscal recovery funds used?

General spending trends

The primary use of fiscal recovery funds—approximately 50% of state allocations and 60% of local government allocations—was revenue replacement, (replacing state and local funds that were lost because the economic shock of COVID-19 reduced tax and fee revenues). Revenue replacement had not been an allowed use of previous iterations of COVID-19 fiscal relief funds. Most notably the CARES Act, the first COVID-19 relief measure passed in 2020, did not allow use of Coronavirus Relief Funds for revenue replacement.

State and local governments face considerable constraints on their ability to raise revenues. Measures like Colorado’s Taxpayer Bill of Rights and California’s Proposition 13 often prohibit states from raising taxes or require legislative supermajorities to do so (Jefferson 2025). Local governments face even more constraints, with few policy levers available to raise revenues. As such, any shock to state and local government revenues can take a long time to reverse, a lesson we learned in the aftermath of the Great Recession. By allowing revenue replacement, SLFRF made it much easier for state and local governments to maintain adequate levels of funding, even as the pandemic recession lowered income from taxes. Revenue replacement was an important innovation in ARPA that should be replicated in the future.

Although the interim rules for ARPA put out by Treasury soon after the law was enacted required complex accounting of lost revenue, the final Treasury rule made the process much easier. For amounts less than $10 million, recipients did not need to calculate lost revenue. They could simply designate funds as revenue replacement and use them as needed. The appeal of this rule to local governments is evident in data summarizing subsequent uses of SLFRF; the smaller a recipient government, the more likely they were to use their fiscal recovery funds for revenue replacement.

Table 2

After revenue replacement, the next most popular use of SLFRF was addressing negative economic impacts of the pandemic. Once again, the flexibility given to recipients under this category was almost certainly a key factor encouraging use of funds for such purposes.

Table 3

Infrastructure was the third-largest use of fiscal recovery funds, and here there is a notable regional variation—state and local governments in the South allocated a far greater share of their funds to infrastructure than those in the rest of the country. In particular, 82% of all state funds obligated for broadband were in Southern states (not shown in Figure A).

Figure A

Not only is water and sewer infrastructure essential for people’s health, these investments are vital to a well-functioning economy. As EPI has extensively documented in its Rooted in Racism series, Southern states have long underinvested in in basic physical infrastructure (Childers 2023–2025). These spending choices likely reflect, at least in part, a need to address the long-standing underinvestment in the region—underinvestment driven by Southern lawmakers’ antipathy toward raising adequate revenue.

Aside from infrastructure spending in the South, there are no clear regional trends in how fiscal recovery funds were used. This is not surprising, given the flexibility of the funding (a feature EPI has long supported) (Bivens 2020). When ARPA was enacted in early 2021, there was simply no way for the federal government, or state and local governments, to know what their needs would be. ARPA’s flexibility was the right decision. The ability of recipient governments to immediately fill unanticipated budget holes via revenue replacement meant hundreds of thousands of state and local jobs were preserved, vital public programs were maintained, and a deeper economic crisis averted. The most notable success of ARPA SLFRF lies in what did not happen: a collapse in basic public services, massive long-term unemployment, and an extended economic depression.

Innovative SLFRF investments supported working families

In all, SLFRF funded more than 159,000 different projects across the country. Some were gigantic, like a $787 million program in New Jersey to provide rental assistance to low- and moderate-income tenants, and some were very small, like the $28 that St. Clair County, Michigan, provided to help renovate the Port Huron Township Museum.

There are many examples of state and local governments using fiscal recovery funds to make transformative investments to build an economy that supports working families. Several types of uses deserve special attention: fighting the COVID-19 pandemic, investing in public health, and addressing problems with food access and nutrition.

First, ARPA SLFRF went a long way to address the health emergency the country faced in 2021. States, cities, and counties were on the front lines of keeping people safe, providing access to new vaccines once they became available, and saving lives throughout the COVID-19 pandemic.

Over $1.8 billion in SLFRF was used to test, trace, and vaccinate people against COVID-19. Much of this money was used to deal with the practical and logistical challenges of testing and vaccination. Cities and counties, especially, bought personal protective equipment for government employees, especially first responders. Scores of governments purchased testing kits and lab equipment and worked to engage the public to encourage vaccination and tracing outbreaks. For example, Milan, Illinois, rented a meeting hall in town for $43,200 to host their vaccine clinic. Jefferson County, Missouri, hired a nurse for every public school district to oversee a contact-tracing program to track COVID-19’s progress through schools. Monroe County, Indiana, was one of many governments that instituted wastewater monitoring to check for COVID-19 surges While any individual expenditure may seem minor, together these measures did much to reduce COVID-19 infections and deaths.

Second, SLFRF allowed recipient governments to make long-term upgrades to infrastructure that both mitigated COVID-19 threats and made public spaces permanently safer, healthier, and more accessible. Almost $4.3 billion was obligated to upgrade the air quality and safety of public and private facilities. At least 550 projects upgraded HVAC systems in schools, nursing homes, public buildings, and correctional facilities. Governments invested in digital communications tools to reduce the need for in-person meetings. Typical examples include Peoria, Arizona, which allocated $124,996 to install touchless drinking fountains in public buildings, and Stafford County, Virginia, which spent $115,255 to add a glass partition to the entrance of the Commissioner of Revenue’s office so that the administrative staff could be protected from visitors’ virus transmission.

The freedom given to local governments to innovate was particularly evident in the way multiple localities sought to address problems related to food access and nutrition—an issue that has received tremendous public attention resulting from New York City Mayor Zohran Mamdani’s plan to establish municipally operated grocery stores. While one commentator claimed such a project would resemble “the old Soviet Union” (McArdle 2025), the fact is that many SLFRF recipients used public funds to increase access to food for low-income communities, including by opening their own stores.

For example:

• Sioux Falls, South Dakota, set up a mobile grocery market that would operate in underserved parts of the city.
• The small town of Cutler, Illinois, set up a Community Commissary to make it easier to buy food without having to travel a long way.
• Branson, Colorado (population 74 in the 2010 census), constructed a community greenhouse to grow and sell fresh fruits and vegetables for the town and school.
• Charleston, West Virginia, opened a community grocery store that would provide access to fresh groceries for 14,000 residents, and the city of Austin, Texas, did something similar.

There were, in addition, scores of grants to food pantries and other nonprofits that help people find the food they need. The proposal for New York City fits well with how these communities used SLFRF to address food access.

Above are just a handful of the tens of thousands of useful projects made possible by fiscal recovery funds. Some uses were more effective than others, however. For example, although modernizing state unemployment insurance systems was a useful endeavor (see above), more than $22 billion was also spent replenishing state unemployment insurance trust funds, which was unnecessary. UI trust funds hold UI taxes paid by businesses, to make sure funds are available to pay UI claims during spikes in unemployment. While those funds had, indeed, been depleted by the pandemic recession, state UI trust funds are designed to be self-correcting.2 They have automatic mechanisms to raise employer payroll taxes when the trust fund has been drawn down, to rebuild the funds and be prepared for future downturns. It was wholly unnecessary to use fiscal recovery funds to refill trust funds that would have returned to full strength on their own. Spending SLFRF to refill trust funds was a missed opportunity to support economic growth and strengthened public services (Banerjee, Martinez Hickey, and Sawo 2021). Future fiscal recovery projects should not make refilling UI trust funds an allowed use, though they should continue to support modernization of and upgrades to UI systems.

SLFRF accomplished its goals without driving inflation

Finally, it is worth noting that, despite politically motivated claims to the contrary, there is little evidence that SLFRF, or indeed the entire $1.9 trillion American Rescue Plan, was a significant contributor to inflation. As Bivens, Banerjee, and Dzholos (2022) show, the rise in inflation starting in 2022 was a global phenomenon, one that impacted countries, regardless of whether they provided fiscal relief to their economies during COVID-19. Nor was inflation correlated with the rapid decrease in unemployment the U.S. saw, thanks in part to ARPA. Rather, inflation was primarily driven by the dramatic supply shocks to various sectors of the economy caused by COVID-19, and then exacerbated by the Russian invasion of Ukraine in early 2022. Given the scale of the crisis policymakers were confronted with in early 2021, they were right to spend at the scale of the problem, and critiques blaming that spending for inflation are not backed up by the data. Moreover, policy measures that prioritized lowering inflation would have led to either lower employment or lower real wage growth, as there was no policy option that would have lowered inflation, increased wage gains, and supported the strong job growth of 2021–2024 (Bivens 2024).

Conclusion

ARPA’s State and Local Fiscal Recovery Fund was a great success. By spending at the scale of the problem, the federal government aided the economic recovery, supported the maintenance of public services, and gave myriad governments the chance to make innovative choices that have improved the well-being of their communities. A smaller SLFRF would have slowed our economic recovery and made governments more cautious about enacting bold policies to protect working families.

By giving recipient governments so much flexibility in using the funds, the Biden administration allowed every state, county, city, territory, and tribal government to fashion the response most appropriate to their particular needs. When faced with a crisis that had so much unpredictability, this was the right decision.

We don’t know when the next economic downturn, global pandemic, or climate disaster will hit. Whenever it does, federal policymakers should seek to emulate the model set by ARPA.

Notes

1. The devastating Flint, Michigan, water crisis of the 2010s is a prime example of a situation in which too many bureaucratic hurdles worsened a disaster. Flint was facing a serious fiscal crisis and therefore lacked the internal capacity to apply for federal funding (which they would have received) that might have prevented lead contamination of the water supply. See GAO 2015 for more details.

2. At least they should be, provided policymakers have set adequate UI tax base rates. See Perez 2025 for more information.

References

Banerjee, Asha, Sebastian Martinez Hickey, and Marokey Sawo. 2021. “States Are Choosing Employers over Workers by Using COVID Relief Funds to Pay Off Unemployment Insurance Debt: Policymakers Shouldn’t Be Afraid to Increase Taxes on Employers to Improve Unemployment Insurance.” Working Economics Blog (Economic Policy Institute), November 19, 2021.

Bivens, Josh. 2020. “Getting Serious About the Economic Response to COVID-19.” Working Economics Blog (Economic Policy Institute), March 9, 2020.

Bivens, Josh. 2024. “The Post-Pandemic Recovery Is an Economic Policy Success Story: Policymakers Took the Best Way Through a Rocky Path.” Working Economics Blog (Economic Policy Institute), October 1, 2024.

Bivens, Josh, Asha Banerjee, and Mariia Dzholos. 2022. “Rising Inflation Is a Global Problem: U.S. Policy Choices Are Not to Blame.” Working Economics Blog (Economic Policy Institute), August 4, 2022.

Callaghan, Peter. 2021. “The Minnesota Legislature Approved $250 Million for Pandemic Worker Bonuses. Should the State Give Away More Than That?” Minnpost, August 12, 2021.

Callaghan, Peter. 2022. “How the Legislature’s Deal on Pandemic Worker Bonuses and Unemployment Insurance Got Done.” Minnpost, May 4, 2022.

Childers, Chandra. 2023–2025. Rooted in Racism and Economic Exploitation (report series). Economic Policy Institute, October 2023–June 2025.

Colorado, State of. n.d. “Regional Grant Navigators” (web page). Accessed December 3, 2025.

Cooper, David. 2020. “Without Federal Aid, Many State and Local Governments Could Make the Same Budget Cuts That Hampered the Last Economic Recovery.” Working Economics Blog (Economic Policy Institute), May 27, 2020.

Cooper, David, Mary Gable, and Algernon Austin. 2012. The Public-Sector Jobs Crisis: Women and African Americans Hit Hardest by Job Losses in State and Local Governments. Economic Policy Institute, May 2012.

Economic Policy Institute. 2025. Racial and Ethnic Disparities in the United States: An Interactive Chartbook. Economic Policy Institute. October 2025.

Jefferson, Rita. 2025. Anti-Tax Revolts Backfire: What We’ve Learned from 50 Years of Property Tax Limits. Institute on Taxation and Economic Policy, July 2025.

Kamper, Dave. 2025. “Some States and Localities Will Be Better Prepared to Fight a Possible Recession Because of How They Used ARPA Fiscal Recovery Funds.” Working Economics Blog (Economic Policy Institute), April 30, 2025.

Kamper, Dave, and Emma Cohn. 2024. “Time Is Running out for State and Local Governments to Obligate American Rescue Plan Funds.” Working Economics Blog (Economic Policy Institute), October 17, 2024.

McArdle, Megan. 2025. “Zohran Mamdani Has a Seriously Bad Idea—for Grocery Stores.” Washington Post, July 1, 2025.

McNicholas, Celine, Josh Bivens, and Heidi Shierholz. 2020. “The Next Coronavirus Relief Package Should Provide Aid to State and Local Governments, Protect Employed and Unemployed Workers, and Invest in Our Democracy.” Working Economics Blog (Economic Policy Institute), April 27, 2020.

Perez, Daniel. 2025. Holding the Line: Unemployment Insurance. Economic Policy Institute, September 29, 2025.

Rochford, Patrick, Julia Bauer, and Michael Wallace. 2024. “Obligate It or Lose It! Preparing for the Upcoming ARPA SLFRF Obligation Deadline.” National League of Cities, October 1, 2024.

Shierholz, Heidi, and Josh Bivens. 2013. “Four Years into Recovery, Austerity’s Toll Is at Least 3 Million Jobs.” Working Economics Blog (Economic Policy Institute), July 3, 2013.

U.S. Department of the Treasury (Treasury). 2024. “State and Local Fiscal Recovery Funds: New Obligation FAQs Webinar” (web page). Accessed December 3, 2025.

U.S. Department of the Treasury (Treasury). 2025. “Public Data: State and Local Fiscal Recovery Funds” (web page). Accessed December 11, 2025.

U.S. Government Accountability Office (GAO). 2015. Municipalities in Fiscal Crisis: Federal Agencies Monitored Grants and Assisted Grantees, but More Could Be Done to Share Lessons Learned. Publication number 15-222, March 2015.

Wakeley, Dev. 2021. “Alabama Is Making a Costly Mistake on COVID-19 Recovery Funds. Here’s a Better Path Forward.” Working Economics Blog (Economic Policy Institute), November 8, 2021.

The same is true of government. If we want a high-functioning public sector—and we should—there is no shortcut. It requires sustained investment in the people and capacity that make government work. Starve it of resources, and its performance will inevitably suffer.

In a recent New York Times essay, academics Nicholas Bagley and Robert Gordon argue otherwise. In their telling, government underperforms because public-sector unions have too much power, driving up costs and resisting efficiencies. Their solution is simple: rein in unions and invest less—largely by cutting pay for public-sector workers. It’s a tidy story that promises an easy fix.

It is also economically incoherent.

The central constraint on public-sector performance is not the power of unions—it is chronic underinvestment. For decades, policymakers have allowed public-sector pay and prestige to fall behind comparable private-sector jobs and have outsourced key functions that should have been performed by skilled civil servants, not profit-maximizing private contractors that are the real source of excess costs for state and local governments. The predictable results have been staffing shortages, uneven service quality, and degraded state capacity—not because we are paying too much, but because we have been trying to get government on the cheap.

Start with the most basic implicit claim Bagley and Gordon return to again and again: that public-sector unions have extracted excessive compensation and resisted efficiencies at every turn. If that were true, we would expect to see the total compensation of public-sector workers rising as a share of the overall economy. In fact, the opposite has happened—the combined compensation of public employees has shrunk noticeably as a share of national income for the last quarter century.

To be sure, policymakers should always aim to deliver value for taxpayers. And—just as in the private sector—there are surely instances where some public employee’s pay is out of line or workers resist useful improvements. But if overpayment for services delivered inefficiently was a general feature of the public sector, their aggregate compensation wouldn’t be shrinking sharply over time.

Bagley and Gordon support their claims with a shotgun blast of anecdotes about public-sector unions able to muscle excess pay out of colluding Democratic politicians that are almost laughably context-free. L.A. Mayor Karen Bass gave larger-than-normal raises to public-sector employees in 2024? I’d hope so—prices had risen 23% in the previous five years (this inflation had made some news) and private-sector pay for non-supervisory employees was up 28% over that time. The suggestion by Bagley and Gordon that these raises were untoward only makes sense if you actively want the desirability of public employment to crater relative to the rest of the economy.

Bagley and Gordon also note darkly that “more than half” of local government expenditures are paid to employees. So what? Local government spending is not like federal government spending where the overwhelming majority of it is simple transfer payments—sending checks to people (Social Security) and medical providers (Medicare and Medicaid). Local governments must directly deliver public goods and services, like public education. That’s going to be done by people who need to be paid. The private sector, too, devotes the majority of its spending to labor (in the corporate sector, labor’s share is well over 70%.)

Even the data they cite for this irrelevant point show that compensation—including the benefits that Bagley and Gordon decry—in state and local jobs is lower than for similar workers in the private sector. That gap matters. Public-sector employers must compete in the same labor markets as everyone else, and low relative pay for skilled workers in the public sector compromises the ability of public-sector employers to attract and retain highly effective workers.

This ignorance of how labor markets in the private and public sectors interact is the root of many of Bagley and Gordon’s economic misunderstandings.

Consider their discussion of education spending, where they note that California spends more per pupil than Mississippi. California does spend more per pupil in nominal dollars, but prices in California are far higher than in Mississippi. Even more importantly, private-sector salaries for college-educated professionals in California are much higher than in Mississippi—and those are the jobs that set the outside options that talented college graduates weigh when deciding whether to enter and remain in teaching. Put another way, it is competition from the private sector that determines how high pay must be to attract and retain high-quality teachers. Education researchers know this, and that’s why the generally accepted way to assess the sufficiency of education spending is not nominal dollars spent per pupil, but per pupil spending scaled to per capita GDP in a state. In forthcoming work we show that on this measure, California ranks 36^th in the nation—lower than Mississippi.

This also shows why the Bagley and Gordon claim that “…blue states and cities often also pay state and local government workers more than similar jobs pay in red jurisdictions, even after adjusting for the cost of living” misses the point so spectacularly. State and local governments are embedded in their local economies and public-sector pay has to rise in line with private-sector pay in the economy around them, or the quality and quantity of available public employees will suffer.

The big problem over recent decades is that public-sector pay has not kept pace with the surrounding economy, which has made it harder to recruit and retain qualified workers. Teacher shortages, for instance, stem directly from the huge gap that has emerged in recent decades between what public school teachers earn and what comparable private sector workers earn, even in the highest-spending states. How would making these jobs lower-paying and lower-prestige add excellent new teachers and improve educational outcomes?

Another common complaint about the public sector is that it slows infrastructure projects. The public is often invited to imagine huge teams of paper-pushing bureaucrats gleefully stamping “no” on planning documents. But the clearest finding in empirical research about the drivers of higher-cost infrastructure is that costs have risen fastest where states reduced the number of transportation department employees. Fewer public-sector workers means that more of the planning work has been outsourced to more expensive private consultants.

Bagley and Gordon claim that when policymakers bargain with public-sector unions, there is no constraint on their incentives to grant union demands in exchange for electoral support. In reality, there is a crushing countervailing constraint—the overwhelming perception that voters are rabidly anti-tax. This results in a deep reluctance by policymakers to call for the level of revenue needed for public sector excellence. It is a far bigger structural problem today than any supposed excess power of public-sector unions.

Public-sector workers don’t just bear the brunt of underinvestment, they are also one of the few consistent voices arguing for robust financing of state and local governments, bargaining directly for the public good. They advocate for libraries to remain open in rural communities so that everybody has at least some access to the internet, for higher levels of K–12 education spending, and for proper training for EMTs and other first responders to ensure public safety.

Despite these efforts, public sector financing has been throttled in recent decades, and the results have been a predictable degradation of services. Even worse is coming, as the Republican tax and spending megabill will impose crushing cuts to safety net programs that states administer and jointly fund.

For decades we have been relying on the admirable intrinsic motivation of public employees to shield us from some of the damage of underinvestment—nurses, first-responders, and teachers going above and beyond the strict demands of their jobs to provide services they feel called to perform. But we’ve already asked too much while paying too little. If we want a truly excellent public sector—and we should—we need to pay for it.

What the 2025 unionization data show

The number of workers represented by a union increased by 463,000 to 16.5 million in 2025, the highest level recorded in 16 years. These unionized workers account for 11.2% of all wage and salary workers, bringing union density back to its 2023 rate. The fact that union density is at its highest since just 2023, while the total number of union-represented workers is at its highest since 2009, reflects growth in overall employment—the denominator of the rate—over this period. When assessing trends in unionization, it is useful to examine changes in both rates and levels; rate changes capture shifts in the share of workers who are unionized, while level changes capture the net amount of successful new organizing (recalling that when new businesses open, they do not automatically adopt the unionization rate of existing firms; they must be organized, a process that requires substantial time and effort).

As a result of the government shutdown in 2025 from October 1 to November 12, the survey the union membership data are based on—the Current Population Survey (CPS)—was not conducted in October, and the 2025 figures therefore reflect an average of the remaining 11 months. To assess the impact of the missing month on reported changes in unionization, we recalculated 2024 estimates excluding October to ensure an apples-to-apples comparison between 2024 and 2025. The results indicate that the absence of October data in 2025 did not greatly affect the key findings: Union representation increased by 439,000 in this exercise—compared with 463,000 as published by the Bureau of Labor Statistics (BLS)—and union density rose by 0.1 percentage points, identical to the published change. Nonetheless, the loss of a month of CPS data—something that has never occurred in the history of the survey—represents a serious and preventable degradation of the nation’s labor market statistics, reducing their precision, even where headline estimates appear relatively unaffected.

The overall union density of 11.2% masks large differences in unionization by sector. Unionization is far more prevalent in the public sector than the private sector: In 2025, 36.4% of public-sector workers were covered by a union contract, compared with 6.8% of private-sector workers. Both the public and the private sectors saw increases in unionization in 2025.

The public sector saw a 0.7 percentage-point increase in union density in 2025, rising from 35.7% to 36.4%. This growth reflected an increase of 236,000 unionized workers. The most notable development in public-sector unionization in 2025 occurred among federal government workers. Despite—and likely because of—the Trump administration’s aggressive attacks on federal employees and their unions, federal workers increasingly turned to collective representation. Union density among federal workers rose from 29.9% to 31.1%, the largest single-year increase since 2011. This increase represented a gain of 40,000 unionized workers—notable given that federal government employment fell as the Trump administration slashed federal jobs.

Unionization among state and local government workers also rose—from 37.1% to 37.6%, reflecting an increase of 196,000 unionized workers.

Private-sector union coverage increased by 227,000 in 2025, pushing the unionization rate up from 6.7% to 6.8%. Within the private sector, there were particularly large gains in health care and social assistance, retail trade, and educational services. In contrast, the traditionally blue-collar industries of mining, manufacturing, and transportation and utilities saw declines. Construction was one heavily blue-collar sector to buck this trend, posting substantial gains in union coverage.

The BLS unionization numbers serve as a timely reminder that the conventional notion of unionized workers as predominantly white men is woefully outdated. As of 2025, roughly a third (32%) of unionized workers are white non-Hispanic men, while roughly two-thirds (68%) are people of color and/or women.2 These shares were unchanged from 2024.

The gender gap in unionization is very small—less than 1 percentage point. However, the gap widened somewhat in 2025, as the unionization rate for men rose more than that for women: Men’s unionization increased from 11.3% to 11.6%, while women’s increased more modestly, from 10.8% to 10.9%.

Of all major racial and ethnic groups, Black workers continued to have the highest unionization rates in 2025, at 12.7%. This compares with unionization rates of 11.0% for white workers, 10.4% for Asian workers, and 9.9% for Hispanic workers. Despite maintaining the highest density, Black workers experienced a decline in 2025, dropping from 13.2% to 12.7%. This decline reflected decreases among both Black men and Black women, though the underlying dynamics differed by gender. The losses were larger among Black women, and the decline among Black women in the level of union coverage was likely due, at least in part, to falling employment in 2025—a pattern not observed among Black men, whose employment rose. The drop in Black women’s employment in 2025 has been documented in recent analyses (see Wilson 2026). 

Even with the decline in unionization among Black workers, unionization among people of color overall increased more (up 289,000) than among white non-Hispanic workers (up 174,000).3 This was driven by sizeable increases in unionization among both Hispanic and Asian workers.

Although younger workers tend to have lower unionization rates, the 2025 data reflect the heightened organizing activity among younger workers in recent years. Union coverage among workers under age 45 increased by 428,000, compared with an increase of 35,000 among workers age 45 and over.

Overall unionization rates obscure large differences across the country. States in the Northeast and the West tend to have higher unionization rates—particularly New York, New Jersey, and Connecticut in the Northeast, and Hawaii, Washington, Alaska, California, and Oregon in the West. By contrast, states in the South tend to have lower unionization rates, notably the Carolinas, Arkansas, Louisiana, Georgia, and Texas. States in the Midwest tend to have unionization rates that fall somewhere in between.4

In 2025, however, this long-standing pattern showed potential signs of erosion, as the South accounted for close to half (46%) of all net gains nationwide. The region added 214,000 unionized workers, compared with 249,000 in the rest of the country combined.

More than 50 million workers wanted a union but couldn’t get one

The share of nonunion workers who would like to have a union at their workplace far exceeds the share who are actually unionized. In 2025, 11.2% of workers were covered by a union contract. Recent survey data show that 43% of nonunion workers would vote to unionize their workplace if given the opportunity.5 That is up substantially from previous decades; surveys in 1977 and 1994 found that fewer than one-third (27% and 31%, respectively) of nonunion workers said they would vote to unionize if they could.6 There were 130.2 million wage and salary workers in 2025 who were not represented by a union; 43% of that is 56 million. In other words, more than 50 million workers in 2025 wanted union representation but were unable to get it.

Unions have record high public favorability in U.S.

The 2025 rise in union density coincides with a high public favorability toward unions. Since 2021, approval for unions has remained high, with over 68% of people in the U.S. viewing unions favorably (Brenan 2025). This positive view of unions is shared across generations, with majorities of Boomers (59%), Gen X (58%), Millennials (61%), and Gen Z (63%) viewing unions favorably. Young adults (ages 18–35) have the highest favorability rate at 72% (Glass 2025). Unions are viewed positively across party lines with Democrats (90%) and Independents (69%) having high favorability rates for unions, and over 40% of Republicans approving of labor unions (Brenan 2025). Some conservative organizations recognize that unions are popular among workers: Research by American Compass finds that at least 46% of Republicans view unions somewhat favorably, with favorability increasing among young Republicans (60%) (American Compass 2025). Data from the American National Election Studies show that people in the U.S. favor unions over big business now more than ever—with the average rating for labor unions hitting a new high (60%), while big business hit a low (44%) (Sojourner and Reich 2025). Further, most people in the U.S. say the decline in union density is bad for the country (60%) and bad for working people (62%). Most young adults (69%), including young Republicans (52%) and young Democrats (82%), view the decline in union density as bad for working people (Van Green 2025).

Benefits of unions

The high favorability of unions in the U.S. makes sense when you consider the benefits unions provide for workers. When workers join together in a union and engage in collective bargaining, their wages, benefits, and working conditions improve. Further, in communities with higher union density rates, working families have higher incomes, greater access to health care, and fewer restrictions on voting. Unions:

• Boost wages. On average, a worker covered by a union contract earns 12.8% more in wages than a peer in a nonunionized workplace (EPI 2025b). Further, in places or industries where unionization is strong, unions also boost wages for nonunion workers by effectively establishing higher standards. This is the union “spillover” effect.

• Narrow racial wage gaps and raise women’s wages. On average, Hispanic and Black workers represented by a union are paid 16.4% and 12.6% more, respectively, than their nonunionized Hispanic and Black peers (EPI 2025c). The wages of women represented by a union are 9.8% higher than those of nonunionized women (EPI 2025d).
• Create healthier and safer workplaces. Unions also improve the health and safety of workplaces by providing health insurance and paid sick time, requiring safety equipment, and empowering workers to report unsafe conditions without fear of retaliation (McNicholas et al. 2025).
• Increase retirement security. More than 9 in 10 unionized workers have access to employer-sponsored retirement plans. Further, union employers are more likely to contribute more toward retirement plans than comparable nonunion employers (McNicholas et al. 2025; BLS 2025).

In the same way that unions give workers a voice at their workplace, the data suggest that unions also give workers a voice in shaping their communities. Research by EPI documents a strong correlation between high-union-density states and a range of measures that promote higher incomes, healthier communities, and a stronger democracy (McNicholas et al. 2025), as reflected in:

• Higher minimum wages. The average minimum wage of high-union-density states is $13.70, compared with low-union-density states’ average minimum wage of $9.30.
• Higher incomes. Median household incomes in high-union-density states are more than $12,000 higher, on average, than median incomes in low-union-density states.
• More spending on education. States with higher rates of unionization spend $22,777 per pupil on education, compared with $15,568 per pupil in low-union-density states. Further, states with higher unionization rates are less likely to have universal voucher programs.
• Greater access to paid sick leave. 70.6% of states with the highest union density have enacted paid sick leave legislation, compared with just 11.8% of low-union-density states.
• Fewer voting restriction laws. Since 2021, low-union-density states have passed 44 voter restriction laws, whereas high-union-density states passed six such laws.
• Stronger protections for reproductive freedom. States with abortion protections have an average union density twice as high as that of states with varying degrees of abortion restrictions and bans (Poydock 2025).

It is clear that unions provide workers with direct benefits. Further, there is an undeniable correlation between higher levels of unionization and stronger economic, community, and democratic outcomes. While these benefits have long been evident, increased recognition of unions’ role in creating a more just economy and society has undoubtedly contributed to the increase in unionization in 2025. Beyond this, unions have provided representation and support to workers targeted and retaliated against by the Trump administration.

Unions are fighting against attacks from the Trump administration

The growth in unionization in 2025 occurred despite President Trump’s relentless attacks on workers and their unions. Since returning to office, President Trump has engaged in a consistent campaign against U.S. workers, making their lives less affordable in the process. From stripping federal workers’ collective bargaining rights to canceling federal collective bargaining agreements, and compromising the independence of the sole federal agency that administers and enforces private-sector workers’ union and collective bargaining rights, Trump has made it known that he prioritizes the interests of employers over working people.

Unions have consistently been a counterforce against Trump’s attacks on workers. When the Trump administration began indiscriminately firing federal workers without cause, unions sued the administration over its efforts to downsize the federal government. Since then, a U.S. District Court judge ruled that the Office of Personnel Management wrongfully directed federal agencies to fire thousands of probationary employees (Heckman 2025). Unions have also helped win reinstatement for thousands of federal workers. In January 2026, nearly 1,000 workers at the National Institute for Occupational Safety and Health, where over 90% of the workforce received layoff notices, were fully reinstated by the Department of Health and Human Services after months of pressure from unions, public health experts, and worker advocates (AFGE 2026).

In addition to legal fights, unions have been key mobilizers in helping pass legislation that reverses harms from the Trump administration. In response to Trump’s executive order that stripped the collective bargaining rights from over 1 million federal workers, unions have shepherded the Protect America’s Workforce Act to reverse the executive order. In December 2025, the bill passed the House with bipartisan support and has moved to the Senate, where it is currently awaiting consideration (AFL-CIO 2025).

Further, as President Trump actively makes life less affordable for workers, unions are winning contracts that are raising workers’ pay. In Georgia, the International Association of Machinists and Aerospace Workers secured a four-year contract for John Deere workers that included general wage increases of at least 2% each year of the contract, a $3,000 ratification bonus, and no increases to insurance premiums during the length of the contract (IAM Union 2025). In Illinois, the Committee of Interns and Residents/SEIU Healthcare won a first contract for 1,000 resident physicians and fellows at the University of Chicago that included a 17% wage increase through the length of the contract (Moreno 2025). The News Guild of New York won a first contract for journalists at the New York Daily News that included salary minimums of $60,000 and additional wage increases of 6% during the first six months of the contract (The NewsGuild of New York 2025). These are just a few of the many examples of unions raising workers’ pay in 2025. In contrast, the Trump administration has put forward an economic agenda that has undermined workers’ wages and eroded their economic security (McNicholas, Poydock, and Bivens 2026).

Policy pathways to help workers win unions

The 2025 rise in unionization shows that workers are winning unions despite legal and political systems largely working against them. The increase is a testament to workers’ desire to have greater agency over their working lives and a more effective voice in shaping the policies that impact their families and communities. Policymakers have long failed to reform federal labor law to deliver the promise of union representation and collective bargaining first guaranteed U.S. workers nearly 100 years ago. This failure has left workers more vulnerable to attacks, as demonstrated by President Trump’s union-busting policy agenda. Still, workers are organizing their workplaces and winning contracts. If nothing else, policymakers should not allow for the passage of bad policies that make it harder for workers to win unions. But if policymakers want to deliver a pro-worker agenda that would help workers organize and collectively bargain, they should enact the following policies:

• Restore collective bargaining rights for federal workers. The Senate should pass the bipartisan Protect America’s Workforce Act, which would repeal President Trump’s executive order that stripped collective bargaining rights for more than 1 million federal workers. President Trump could also rescind his executive orders that stripped federal workers of their collective bargaining rights.
• Pass the Protecting the Right to Organize Act and the Public Service Freedom to Negotiate Act. These bipartisan bills would strengthen private-sector and public-sector workers’ rights to organize and collectively bargain.
• Ensure workers can reach a first contract. Congress should pass legislation that encourages unions and employers to reach a first contract in a timely manner. The National Labor Relations Act requires unions and management to bargain in good faith but does not require that the two sides reach an agreement. As a result, most unions fail to reach a first contract within a year of unionizing. The bipartisan Faster Labor Contracts Act would establish a mediation-and-binding-arbitration process when employers refuse to bargain in good faith.

Further, states have the opportunity to maintain—and even expand—workers’ rights and protections President Trump and Congressional Republicans are trying to roll back. They can:

• Expand collective bargaining rights to public sector, domestic workers, agricultural workers, and app-based/gig workers.
• Eliminate so-called right-to-work (RTW) laws. Twenty-six states currently have anti-union so-called RTW laws, which diminish workers’ collective power by prohibiting unions and employers from negotiating union security clauses into collective bargaining agreements. This makes it harder for workers to join, form, and sustain unions. More states should restore private-sector workers’ full bargaining rights by repealing these anti-union state laws, as Michigan did in 2023.
• Protect workers’ right to opt out of captive audience meetings. Fourteen states have passed legislation that prohibits employers from mandating worker attendance at meetings focused on political or religious matters. This includes mandatory anti-union captive audience meetings, which the National Labor Relations Board ruled were a violation of the National Labor Relations Act in 2024. However, the current NLRB General Counsel has previously voiced opposition toward the 2024 NLRB decision, which makes state action more necessary.

Notes

1. In states without so-called “right to work” laws, private sector workers at unionized workplaces who are not union members may be required to pay “fair share” fees to cover the cost of representation, but they cannot be required to become union members or pay full dues.

2. The figures in this sentence are the authors’ own calculations based on Current Population Survey microdata (EPI 2025a). We rely on our own calculations here in order to construct nonoverlapping race and ethnicity categories. BLS’s published race and ethnicity categories overlap—for example, white Hispanic workers are counted as both white and Hispanic—and therefore do not permit the desired breakdown. Unless specifically noted, all other figures cited in this report are derived from BLS’s published calculations. 

3. The figures in this sentence are the authors’ own calculations based on Current Population Survey microdata (EPI 2025a). We rely on our own calculations here in order to construct nonoverlapping race and ethnicity categories. BLS’s published race and ethnicity categories overlap—for example, white Hispanic workers are counted as both white and Hispanic—and therefore do not permit the desired breakdown. Unless specifically noted, all other figures cited in this report are derived from BLS’s published calculations.

4. Note: We use the U.S. Census Bureau’s Census Regions.

5. This number can be found in Figure B of Ahlquist, Grumbach, and Kochan 2024. It was calculated from the survey data discussed in Diaz-Linhart et al. 2023.

6. Figure B of Ahlquist, Grumbach, and Kochan 2024. 

References

AFL-CIO. 2025. “Labor Movement Delivers Bipartisan Victory as House Passes Bill to Restore Federal Workers’ Union Rights” (press release). December 11, 2025.

Ahlquist, John S., Jake Grumbach, and Thomas Kochan. 2024. The Rise of the ‘Union Curious’: Support for Unionization Among America’s Frontline Workers. Economic Policy Institute, July 2024.

American Compass. 2025. PRO-Tip: Only Some Labor Reforms Are Pro-Worker. May 1, 2025.

American Federation of Government Employees (AFGE). 2026. “Major Union Victory–NIOSH Employees Win Full Reinstatement After Nine-Month Fight” (press release). January 14, 2026.

Brenan, Megan. 2025. “Labor Union Approval Relatively Steady at 68% in U.S.” Gallup, August 28, 2025.

Bureau of Labor Statistics (BLS). 2025. “Table 1. Retirement benefits: Access, participation, and take-up rates, March 2025.” Employee Benefits in the United States. Last modified September 25, 2025.

Diaz-Linhart, Yaminette, Arrow Minster, Dongwoo Park, Duanyi Yang, and Thomas Kochan. 2023. “Bridging the Gap: Measuring the Impact of Worker Voice on Job-Related Outcomes.” MIT Working Paper.

Economic Policy Institute. 2025a. Current Population Survey Extracts, Version 2025.1.6, https://microdata.epi.org.

Economic Policy Institute (EPI). 2025b, State of Working America Data Library, “Union Wage Premium – Union Wage Premium, Average (Regression-Based),” 2025. 

Economic Policy Institute (EPI). 2025c, State of Working America Data Library, “Union Wage Premium by Race/Ethnicity – Union Wage Premium, Average (Regression-Based),” 2025. 

Economic Policy Institute (EPI). 2025d, State of Working America Data Library, “Union Wage Premium by Gender – Union Wage Premium, Average (Regression-Based),” 2025. 

Glass, Aurelia. 2025. “Everybody Likes Unions.” Center for American Progress, November 4, 2025.

Heckman, Jory. 2025. “Court Finds OPM Unlawfully Directed Mass Firings, Tells Agencies to Update Personnel Files.” Federal News Network, September 13, 2025.

IAM Union. 2025. “Big Win at John Deere: Georgia Local 2789 Members Ratify Strong New Contract” (press release). November 18, 2025.

McNicholas, Celine, Margaret Poydock, Heidi Shierholz, and Hilary Wething. 2025. Unions Aren’t Just Good For Workers—They Also Benefit Communities And Democracy. Economic Policy Institute, August 2025.

McNicholas, Celine, Margaret Poydock, and Josh Bivens. 2026. 47 Ways Trump Has Made Life Less Affordable in the Last Year. Economic Policy Institute, January 2026.

Moreno, Julian. 2025. “UChicago Medicine Resident Physicians Pass First-Ever Union Contract.” The Chicago Maroon, November 11, 2025.

The NewsGuild of New York. 2025. “The NewsGuild of New York Reaches Tentative First Contract Agreement with Alden Global Capital for Journalists at the Daily News.” Editor and Publisher, November 10, 2025.

Poydock, Margaret. 2025. “Unions Can Play A Critical Role In Safeguarding Reproductive Freedom.” Working Economics Blog (Economic Policy Institute), August 25, 2025.

Sojourner, Aaron, and Adam Reich. 2025. “Americans Favor Labor Unions Over Big Business Now More Than Ever.” Working Economics Blog (Economic Policy Institute), May 20, 2025.

Van Green, Ted. 2025. “Majorities of Adults See Decline of Union Membership as Bad for the U.S. and Working People.” Pew Research Center, August 27, 2025.

Wilson, Valerie. 2026. “Black Women Suffered Large Employment Losses in 2025—Particularly Among College Graduates and Public-Sector Workers.” Working Economics Blog (Economic Policy Institute), February 10, 2026.

In 2025, Black women’s employment rate fell by 1.4 percentage points to 55.7%. This is one of the sharpest one-year declines in the last 25 years (see Figure A). The decline among Black men and white women was no more than 0.5 percentage points each while employment rose slightly for Hispanic (+0.6 percentage points) and AAPI (+0.4 percentage points) women. At 55.7%, Black women’s employment-to-population ratio (EPOP) was well below the most recent peak of 57.8% in 2023, reflecting employment losses that started in 2024 and accelerated in 2025. These estimates are also available in EPI’s State of Working America Data Library.

Figure A

The decline in Black women’s employment over the last year included exits from the labor force and rising unemployment among remaining jobseekers. Their labor force participation rate dropped from 60.6% in 2024 to 59.7% in 2025 as the unemployment rate rose from 5.8% to 6.7%.

A closer look reveals that college-educated Black women experienced the greatest drop in employment and labor force participation rates. As shown in Figure B, the EPOP for Black women with bachelor’s degrees fell by 3.5 percentage points over the last year—a much larger decline than any other education category, including those who are not college graduates. Similarly, the labor force participation rate declined most for Black women bachelor’s degree holders—down 2.3 percentage points in 2025.

Figure B

Large employment losses and labor force departures among college graduates were a direct consequence of the Trump administration implementing massive federal layoffs and buyouts over the last year, a sector where nearly half of Black workers have a bachelor’s degree or higher. Analysis of Current Population Survey (CPS) microdata further supports this as a driving factor. Figure C presents changes in the number of Black women employed by self-reported sector and industry of employment between 2024 and 2025. Notably, it shows that the overall net loss in employed Black women was driven entirely by public-sector losses, with most job losses in federal government.

While Black women saw a net increase in private-sector employment in 2025—primarily in the growing education and health services industry—there were net losses in six of the 12 major private-sector industries. Among the net losses, 33% occurred in other services, followed by 25% in manufacturing, 21% in financial activities, and 15% in professional and business services. The other services industry includes establishments primarily engaged in repair and maintenance and personal and laundry services, as well as work for private households and religious, grantmaking, civic, and professional organizations.

To put a finer point on the dominant influence of Black women’s employment losses on rising Black unemployment in 2025, Figure C also shows that Black men reported a net gain in the total number employed. Black men had a much smaller decline in federal government employment and relatively fewer industry-specific private-sector losses.

Figure C

While this analysis offers more details about the decline in Black women’s employment, the biggest looming question remains unanswered: Why do federal and private-sector employment losses seem so targeted to Black women? Whether those losses are an early indication of more widespread job losses to come—or casualties of anti-equity backlash in action—could become clearer in the months ahead.

Key takeaways

• Proposed state legislation to extend full, equal collective bargaining rights to all state and local government workers can help Virginia:
  • reduce the state’s large public-sector pay gap
  • improve public services
  • reduce staff vacancies and turnover
  • decrease racial and gender wage disparities
• Strong collective bargaining rights and increased unionization rates are highly correlated with numerous, widely shared benefits including higher wages, more equitable state economies, and healthier democracies.
• Virginia currently has one of the largest public-sector pay gaps in the nation. State and local government employees in Virginia earn, on average, 26.7% less than private-sector peers with similar education and experience.
• The public-sector pay gap varies across states and is largest in states like Virginia where most public employees lack collective bargaining rights. In Virginia, collective bargaining is currently banned for state employees and only recently became permitted for some local government employees.

In 2026, Virginia lawmakers are poised to consider transformative legislation that would extend full collective bargaining rights to public employees at all levels of state and local government. The benefits of comprehensive collective bargaining rights would extend far beyond affected public employees who would enjoy better working conditions. Stronger state collective bargaining laws can help improve the quality of public services and economic outcomes for all Virginians.

Data show that strong collective bargaining laws help states address persistent public-sector pay gaps, reduce staff vacancies and turnover, and lead to higher unionization rates (Morrissey and Sherer 2024). Increased unionization rates are highly correlated with numerous, widely shared benefits including more equitable state economies and healthier democracies (McNicholas et al. 2025).

For Virginia, expanding public-sector bargaining is a critical next step in building an economy that works for all. The expansion will reverse a long history of anti-worker state policies that have suppressed wages and limited workers’ power in the labor market by blocking pathways to unionization. Such policies have resulted in greater income inequality and persistent racial and gender wage disparities (Bivens and Shierholz 2018; Mishel and Bivens 2021). Strong, comprehensive state legislation covering public employees’ labor rights is also especially important at a moment when the federal government has been attacking the jobs, working conditions, and union contracts of over 235,000 federal civil servants residing in Virginia, and threatening long-standing federal protections of all workers’ rights (EPI 2025b; Oakford and Poydock 2025). 

This report examines how public-sector workers with limited or no collective bargaining rights fare compared with public-sector workers with well-established collective bargaining rights. To do so, we estimate pay differences between state and local government workers and private-sector workers with similar education and experience. In this analysis, Virginia is among a minority of states in which state employees have no bargaining rights and only some local government employees have limited bargaining rights. By contrast, 27 states have well-established collective bargaining rights for state and local government workers (Table 1).

The right to bargain collectively over pay is associated with higher unionization rates (union membership as a share of the workforce) in a given state. This report shows that collective bargaining rights and union strength help state and local government workers narrow the pay gap with private-sector workers. We show that the pay gap for public employees is significantly larger when these workers have weak or no bargaining rights, like public employees in Virginia, which has one of the largest public-sector pay gaps in the nation (-26.7%).

Virginia public employees lack collective bargaining rights

Proposed legislation in Virginia would, for the first time in the state’s history, guarantee that all state and local government employees enjoy labor rights similar to those of their private-sector peers (whose rights to collectively bargain are covered under the federal National Labor Relations Act) (HB 1263 and SB 378). The Virginia Assembly passed similar legislation (HB 2764 and SB 917) in 2025, only to have it vetoed by then-Governor Glenn Youngkin (McGinley 2025). 

Virginia is one of a handful of Southern states that for decades explicitly banned public employees and employers from entering into collective bargaining agreements. In 2020, Virginia took an important step toward making collective bargaining newly optional for local governments, but the state’s policies remain out of step compared with most states. Virginia lacks a statewide collective bargaining statute covering all local government employees and still has a ban in place barring state employees from collective bargaining (Borja 2022).

As shown in Table 1, the majority of states and Washington, D.C., already ensure collective bargaining rights for most public employees, including state workers. Many states have had statewide public-sector bargaining statutes in place for decades (Rueben 1996; Sanes and Schmitt 2014). Such laws typically set clear, uniform guidelines for union elections and contract negotiation processes and establish state labor boards charged with fostering productive labor-management relations (including timely contract settlements), ensuring broad awareness of and compliance with statutory guidelines, and mediating or adjudicating disputes as needed.

Table 1

Who are public employees in Virginia?

In 2024, approximately 560,000 Virginians worked in state and local government occupations (BLS-CES 2020–2025). This includes teachers and school staff, firefighters, transit operators, law enforcement, administrative staff, and employees serving the state’s public safety, transportation, health care, judicial, corrections, and higher education systems. As shown in Table 2, 21.2% of Virginia state government employees and 20.4% of Virginia local government employees are Black, and 57.3% of state government employees and 64.5% of local government employees are women. Many public-sector workers in the state are highly educated. Virginia public-sector workers are more than twice as likely to have advanced degrees as private-sector workers and are much less likely to have a high-school level or less education.

Table 2

Anti-union state policies are rooted in racism and harm all Virginia workers

Virginia’s ban on union contracts for public employees is a Jim Crow-era policy with deep roots in the history of slavery and white supremacy. After the passage of federal labor laws accelerated worker organizing in the 1930s, Virginia joined several Southern states in adopting anti-union state laws designed to prevent multiracial union organizing and suppress Black workers’ wages and power (Childers 2023). The Virginia Assembly first took an explicit stance on public-sector bargaining in response to the unionization of Black hospital employees at the University of Virginia in 1946, via a joint resolution declaring it against the public policy of the state to negotiate with public employee unions (a stance later affirmed by state supreme court decisions and codified in statute in 1993). Virginia was also among the first states to adopt anti-union so-called right-to-work legislation in 1947, an anti-labor policy jointly promoted by white supremacist organizations and industry groups intent on slowing the growth of unions to maintain access to cheap labor—especially in Southern states (The Commonwealth Institute 2022; Watts 2021; Pierce 2017, 2018; Sherer and Gould 2024).

As a result of these long-standing anti-union state policies, unionization rates in Virginia for both public- and private-sector workers are well below national averages.

Figure A

Narrowing Virginia’s large public-sector pay gap

Across the country, public-sector employees earn less than their private-sector counterparts, and this pay gap has widened in recent years. In the latest available five-year period (September 2020–August 2025), state and local government employees earned, on average, 17.2% less than private-sector employees with similar education and experience. The size of the public-sector pay gap varies across states and is largest in states like Virginia where most public employees lack collective bargaining rights. Public-sector workers with strong bargaining rights experience a narrower pay gap (-14.3%) than those with weak (-19.6%) or no bargaining rights (-22.5%) (see Table 3).

Virginia currently has one of the largest public-sector pay gaps in the nation. Among all 50 states, Virginia’s -26.7% public-sector pay gap appears to be the second highest, though differences among states clustered at the bottom of the rankings are not statistically significant. (Pay gap statistics are for full-time wage and salary workers ages 18–64, based on the authors’ analysis of pooled September 2020–August 2025 Current Population Survey microdata downloaded from Flood et al. 2025 and EPI 2025a.)

Compensation packages of public employees, on average, include more robust benefits than those of private-sector workers, but Virginia’s public-sector compensation gap remains large, even when factoring in more robust benefits. Benefits are an estimated 32.0% of pay for private-sector workers in the South Atlantic region and an estimated 51.3% of pay for Virginia public-sector workers. Factoring in benefits, Virginia’s public-sector compensation gap shrinks to a still sizable 16.0% (authors’ estimate based on BLS-ECEC 2020–2025 and Public Plans Data 2020–2024; see Morrissey and Sherer 2024 for methodology).1

Table 3

Addressing high staff vacancy and turnover rates in Virginia’s public sector

The growing public-sector pay gap has become a particular concern at a moment when low pay has created serious challenges to recruiting and retaining teachers and other public employees across the country (Cooper and Martinez Hickey 2022; MissionSquare Research Institute 2023; Wething 2024a, 2024b; Martinez Hickey 2025). Virginia has faced particularly acute staffing shortages in public education and in units of state government in recent years (Manzanares 2025; Cantor 2025).

The latest (2025) biennial compensation report from the state’s Department of Human Resource Management notes that “Years without any salary adjustments in the past have made it difficult for state agencies to build a proactive and sustainable approach to addressing compensation, recruitment and retention concerns” (VDHRM 2025). Between 2001 and 2023, low average salary increases for state workers (just 2.9% per year, compared with 3.4% annually in the private sector) have led to high vacancy and turnover rates. As of 2024, roughly 1 in 5 (22.4%) state jobs were unfilled, and the median salary across the state workforce was just $61,305—a full $5,000 less than the median city employee salary in Richmond, which has adopted its own collective bargaining ordinance (McGinley 2025).

Chronic state employee staffing shortages are already having direct impacts on the health, safety, and quality of life of Virginians. To take one example, in 2025 the Virginia Department of Juvenile Justice (DJJ) drew headlines after reporting that inability to adequately staff large facilities for incarcerated youth had led to unsafe conditions, lockdowns, increased restrictions on out-of-cell time, and a lack of rehabilitative services. DJJ directors indicated ongoing difficulty recruiting for open positions, despite participating in job fairs, college and university visits, outreach to military and veteran communities, and offering signing bonuses and referral incentives (Manzanares 2025). The root causes of understaffing identified by Virginia state agencies like DJJ—from burnout and high workloads to low starting salaries, lackluster raises, and difficult or unsafe working conditions—are precisely the topics that a structured collective bargaining process would allow state agencies to address, with direct input from frontline employees.

Addressing racial and gender pay gaps to improve recruitment and retention of workers of color and women

The public-sector pay gap disproportionately affects Black workers and women, who are more likely to be employed in public-sector jobs and who are disadvantaged in the broader labor market (Childers 2025). Strengthening collective bargaining rights for government workers in Virginia therefore promises to narrow the pay gap and reduce racial and gender inequalities in public institutions and across the labor market.

For example, a 2024 RAND report showed that Black teachers nationally receive lower average salaries and pay raises than white teachers do, a difference linked directly to the fact that Black teachers were less likely to live in states where public educators had collective bargaining rights. The inadequacy of pay is one of the main reasons teachers report for leaving the profession, further contributing to the demographic mismatch between teachers and students (e.g., nationwide over half of all students are children of color, but the teaching workforce remains around 80% white) (Steiner et al. 2024; Gopalan 2025). Likewise, data show that in states like Wisconsin where legislators have weakened formerly strong collective bargaining rights in the past two decades, resulting decreases in unionization levels and worker wages have measurably widened public-sector pay gaps and gender pay gaps (Nack et al. 2019; García and Han 2021; Biasi and Sarsons 2022).

Building on success and remedying limitations of current state law that only permits local collective bargaining

In 2020, Virginia partially lifted its long-standing ban on public-sector collective bargaining with legislation creating an “opt-in” system that has allowed local governments to set their own policies on whether and how to bargain with their own employees. While this opening fell far short of creating a consistent statewide framework for collective bargaining, it has resulted in at least 17 of Virginia’s largest cities, counties, and school boards adopting collective bargaining ordinances and creating new pathways to union contracts for substantial numbers of public employees—including, for example, 27,000 teachers and school staff and 12,000 county employees in Fairfax County; nearly 4,000 City of Richmond employees; and others (Borja 2022; Sharma 2022; Khalil 2023; Lukert 2024; Pope 2025; Walter 2026).

The local “opt-in” system was a positive step forward that has already revealed high levels of interest in collective bargaining among Virginia workers. The system resulted in new union contracts covering tens of thousands of frontline educators and civil servants, providing an initial boost to Virginia’s historically low unionization rate.

Significant limitations of the new “opt-in” system have also quickly become clear. As noted above, the major shortcoming of the current law is that it does not ensure equal collective bargaining rights for all public employees. Virginia state employees remain barred from collective bargaining, and in local government where collective bargaining is permitted (but not required), workers continue to lack collective bargaining rights, unless they are able to persuade local officials to adopt and then implement a collective bargaining ordinance. When localities do adopt such ordinances, they may vary in strength and effectiveness (Overman 2023).

As a result, Virginia’s current “opt-in” system for local collective bargaining has generated an uneven patchwork of highly variable (and potentially unstable) collective bargaining policies across the state. Some local governments have continued to block workers’ path to a union contract by rejecting appeals from their own employees to adopt local collective bargaining ordinances (Murphy 2024; Cooper 2025; Lytle 2025; Wilkinson 2025). Because current state law leaves the burden of collective bargaining policy development up to each individual local government, some jurisdictions have expressed interest in or support for collective bargaining while remaining reluctant to invest the necessary time or scarce administrative or legal resources to developing and implementing a local ordinance. Even in larger local jurisdictions with strong collective bargaining ordinances now in place, the “opt-in” system remains fragile and highly vulnerable to instability whenever turnover occurs among elected leaders or administrators with experience necessary to maintain unique local labor-management systems.

Creating a state labor board to provide efficiency and stability for all Virginia public employers and employees

A proposed state labor board equipped to administer a statewide, uniform collective bargaining framework would serve all Virginia state and local government entities and provide consistency, efficiency, stability, and economies of scale. All Virginia public employers and employees would benefit from access to a central, independent state board with capacities to advise public employers and employees about collective bargaining procedures, administer union elections, and mediate contract negotiations. The creation of such state capacities is also especially important at moment when federal labor agencies with similar capacities have been eliminated or rendered non-functional. Indeed, across the country, many states are relying more than ever on their existing state labor boards, and in some cases, are exploring paths to expanding state labor board capacities in order to ensure consistent protections of workers’ rights to unionize and collectively bargain (H.B. 3005; Walter and Madland 2025).

Conclusion

In 2026, Virginia lawmakers should seize the opportunity to enact strong, comprehensive collective bargaining legislation that covers all state and local government workers and creates a state labor board to administer the new system. Under Virginia’s current state law (where collective bargaining is banned for state employees and allowed only for some local government workers), pay for Virginia public employees has lagged far behind that of private sector counterparts with similar education and experience.

Stronger collective bargaining rights can help shrink Virginia’s large public-sector pay gap, reduce racial and gender pay gaps, and improve recruitment and retention of qualified public employees. Removing barriers to unionization for public employees is also a critical step toward reversing the impacts of long-standing anti-worker state policies in Virginia that have for decades suppressed all workers’ wages and contributed to growing income inequality. Lastly, state action to shore up public employee rights is especially important at moment when the federal government is attacking civil servants, public education, health care, and all public services. By extending full collective bargaining rights to historically excluded state and local government workers, state lawmakers can help lead the way to a more vibrant, equitable economy rooted in multiracial democracy in Virginia, the South, and the nation.

Notes

1. If anything, our comparison likely minimizes the public-sector compensation gap in Virginia by comparing benefits for private-sector workers in the South Atlantic region to public-sector workers throughout the country because public-sector data for the South Atlantic region is not available from the Bureau of Labor Statistics. Our comparison does account for the fact that Virginia pension benefits are less generous than public pensions in many parts of the country, though possibly not in two Northern Virginia counties with their own retirement systems. It does not fully account for other differences in benefits between Virginia public-sector workers and their counterparts in other states, though it does account for the fact that public-sector workers in Virginia are covered by Social Security (not true in some states) and adds 1% for public-sector retiree health benefits that are not included in BLS compensation statistics. Finally, it compares all public-sector workers with all private-sector workers, when arguably the better comparison would be between public-sector workers and private-sector workers employed by large employers, who tend to provide more generous benefits than small employers.

References

Biasi, Barbara, and Heather Sarsons. 2022. “Flexible Wages, Bargaining, and the Gender Gap.” Quarterly Journal of Economics 137, no. 1 (February): 215–266. https://doi.org/10.1093/qje/qjab026.

Bivens, Josh, and Heidi Shierholz. 2018. What Labor Market Changes Have Generated Inequality and Wage Suppression? Employer Power Is Significant but Largely Constant, Whereas Workers’ Power Has Been Eroded by Policy Actions. Economic Policy Institute, December 2018.

Borja, Mel. 2022. “How Public-Sector Workers Are Building Power in Virginia.” Working Economics Blog (Economic Policy Institute), February 18, 2022.

Brannick, Priya. 2019. The Janus Impact and Grading of State Public Sector Labor Laws. Commonwealth Foundation, August 2019.

Brannick, Priya M., and Andrew Holman. 2022. The Battle for Worker Freedom in the States: Grading State Public Sector Labor Laws. Commonwealth Foundation, September 2022.

Bureau of Labor Statistics (BLS-CES). 2020–2025. Current Employment Survey, State and Area Employment Data. Accessed January 2026.

Bureau of Labor Statistics (BLS-ECEC). 2020–2024. Employer Costs for Employee Compensation data. Accessed January 2026.

Cantor, Dave. 2025. “Virginia Corrections Department has 2,400 Open Positions.” Virginia Public Radio, August 14, 2025.

Childers, Chandra. 2023. Rooted in Racism and Economic Exploitation: The Failed Southern Economic Development Model. Economic Policy Institute, October 2023.

Childers, Chandra. 2025. “Disinvestment in the Public Sector Undermines Opportunities for Black Women Across the South: Trump Cuts Further Threaten Key Services for Working People Across the Nation.” Working Economics Blog (Economic Policy Institute), July 7, 2025.

Commonwealth Foundation. 2021. “Public Sector Labor Law Database.” Accessed May 9, 2021.

Cooper, David, and Sebastian Martinez Hickey. 2022. Raising Pay in Public K–12 Schools Is Critical to Solving Staffing Shortages: Federal Relief Funds Can Provide a Down Payment on Long-Needed Investments in the Education Workforce. Economic Policy Institute, February 2022.

Cooper, Tracy. 2025. “Portsmouth Workers Frustrated by Private Collective Bargaining Talks.” 13 News Now, July 22, 2025.

Dippel, Christian, and Zachary Sauers. 2019. “Does Increased Union Power Cause Pension Under-Funding in the Public Sector?” (preliminary draft). September 23, 2019.

Economic Policy Institute. 2025a. Current Population Survey Extracts, Version 2025.12.18, https://microdata.epi.org.

Economic Policy Institute. 2025b. How Many Federal Employees Live in Your State? Accessed January 12, 2026.

Flood, Sarah, Miriam King, Renae Rodgers, Steven Ruggles, J. Robert Warren, Daniel Backman, Etienne Breton, Grace Cooper, Julia A. Rivera Drew, Stephanie Richards, David Van Riper, and Kari C.W. Williams. IPUMS CPS: Version 13.0 . Minneapolis, MN: IPUMS, 2025. https://doi.org/10.18128/D030.V13.0.

Frandsen, Brigham R., and Michael Webb. 2017. “Public Employee Pensions and Collective Bargaining Rights: Evidence from State and Local Government Finances.” Hutchins Center Working Paper no. 35, The Brookings Institution, October 2017.

García, Emma, and Eunice Han. 2021. The Impact of Changes in Public-Sector Bargaining Laws on Districts’ Spending on Teacher Compensation. Economic Policy Institute, April 2021.

Gopalan, Maithreyi. 2025. “Why Does Teacher-Student Demographic Representation Matter for Student Success?” HEDCO Institute for Evidence-Based Educational Practice, October 15, 2025.

Han, Eunice S. 2019. “The Impact of Teachers Unions on Teachers’ Well-Being Under Various Legal Institutions: Evidence from District–Teacher Matched Data.” American Educational Research Association 5, no. 3 (August). https://doi.org/10.1177/2332858419867291.

H.B. 1263, 2026 H.D., Reg. Sess. (Va. 2026).

H.B. 2764, 2025 H. D., Reg. Sess. (Va. 2025).

H.B. 3005, 2025 Gen. Assemb. (Ill. 2025).

International Association of Fire Fighters (IAFF). n.d. “Collective Bargaining” (web page). Accessed May 2024.

Khalil, Jahd. 2023. “Hundreds of Richmond City Employees Select Unions.” Virginia Public Media, June 23, 2023.

Lukert, Luke. 2024. “Fairfax Co. Teachers Vote Overwhelmingly for Collective Bargaining Rights.” WTOP, June 11, 2024.

Lytle, Derek. 2025. “Virginia Beach School Board Sits Divided on Collective Bargaining.” 13 News Now, November 11, 2025.

Manzanares, Keyris. 2025. “Virginia Juvenile Justice System Strained by Staffing Shortages.” Virginia Public Media, April 9, 2025.

Martinez Hickey, Sebastian. 2025. “The School Bus Driver Shortage Has Improved Slightly but Continues to Stress K–12 Public Education.” Working Economics Blog (Economic Policy Institute), November 3, 2025.

McGinley, Sophie. 2025. Building a More Equitable Commonwealth: The Case for Collective Bargaining Rights for Virginia State Employees. The Commonwealth Institute, August 2025.

McNicholas, Celine, Margaret Poydock, Heidi Shierholz, and Hilary Wething. 2025. Unions Aren’t Just Good for Workers—They Also Benefit Communities and Democracy. Economic Policy Institute, August 2025.

McNicholas, Celine, Lynn Rhinehart, Margaret Poydock, Heidi Shierholz, and Daniel Perez. 2020. Why Unions Are Good for Workers—Especially in a Crisis Like COVID-19: 12 Policies That Would Boost Worker Rights, Safety, and Wages. Economic Policy Institute, August 2020.

Mishel, Lawrence, and Josh Bivens. Identifying the Policy Levers Generating Wage Suppression and Wage Inequality. Economic Policy Institute, May 2021.

MissionSquare Research Institute. 2023. State and Local Government Employment Trends, 2023 (issue brief). May 17, 2023.

Morrissey, Monique, and Jennifer Sherer. 2024. The Public-Sector Pay Gap Is Widening. Unions Help Shrink It. Economic Policy Institute, August 2024.

Murphy, Ryan. 2024. “Virginia Beach Rejects Collective Bargaining for City Employees.” WHRO Public Media, April 30, 2024.

Nack, David, Michael Childers, Alexia Kulwiec, and Armando Ibarra. 2019. “The Recent Evolution of Wisconsin Public Worker Unionism Since Act 10.” Labor Studies Journal 45, no. 2: 147–165. https://doi.org/10.1177/0160449X19860585.

National Conference of State Legislators (NCSL). n.d. “Collective Bargaining database.” Accessed May 2024.

National Council on Teacher Quality (NCTQ). 2019. “Collective Bargaining Laws database.” Updated January 2019.

National Education Association (NEA). 2020. “Collective Bargaining Laws for Public Sector Education Employees,” November 2020 (unpublished document used by permission).

New Mexico Public Employee Labor Relations Board. 2023. Public Sector Collective Bargaining by State.

Oakford, Patrick, and Margaret Poydock. 2025. “Trump Is the Biggest Union-Buster in U.S. History: More Than 1 Million Federal Workers’ Collective Bargaining Rights Are at Risk.” Working Economics Blog (Economic Policy Institute), September 2, 2025.

Overman, Stephenie. 2023. “In Virginia, ‘Patchwork’ of Ordinances Makes Public-Sector Organizing a Maze.” Virginia Mercury, January 16, 2023

Pierce, Michael. 2017. “The Origins of Right-to-Work: Vance Muse, Anti-Semitism, and the Maintenance of Jim Crow Labor Relations.” The Labor and Working-Class History Association, January 12, 2017.

Pierce, Michael. 2018. “Vance Muse and the Racist Origins of Right-to-Work.” Expert Forum (American Constitution Society), February 22, 2018.

Pope, Michael. 2025. “Fairfax County May Soon Be the Home of the Largest Collective Bargaining Agreement in Virginia.” WVTF, September 10, 2025.

Public Plans Data. 2001–2024. Center for Retirement Research at Boston College, MissionSquare Research Institute, National Association of State Retirement Administrators, and the Government Finance Officers Association. Accessed January 5, 2026.

Rueben, Kim. 1996. “Extended NBER Public Sector Collective Bargaining Law Data Set” [Stata and Excel files]. Downloadable data available at www.nber.org/research/data/nber-public-sector-collective-bargaining-law-data-set (see last paragraph on this web page). Accessed January 12, 2026.

Ruggles, Steven, Sarah Flood, Matthew Sobek, Daniel Backman, Grace Cooper, Julia A. Rivera Drew, Stephanie Richards, Renae Rodgers, Jonathan Schroeder, and Kari C.W. Williams. IPUMS USA: Version 16.0 . Minneapolis, MN: IPUMS, 2025. https://doi.org/10.18128/D010.V16.0

Sanes, Milla, and John Schmitt. 2014. Regulation of Public Sector Collective Bargaining in the States. Center for Economic and Policy Research, March 2014.

S.B. 378, 2026 S., Reg. Sess. (Va. 2026).

S.B. 917, 2025 S., Reg. Sess. (Va. 2025).

Sharma, Rahul Chowdry. 2022. “Where Can Public Sector Employees Collectively Bargain in Virginia? Increasingly, the Commonwealth’s Most Populous Cities and Counties.” Virginia Mercury, July 28, 2022.

Sherer, Jennifer, and Elise Gould. 2024. “Data Show Anti-Union ‘Right-to-Work’ Laws Damage State Economies: As Michigan’s Repeal Takes Effect, New Hampshire Should Continue to Reject ‘Right-to-Work’ Legislation.” Working Economics Blog (Economic Policy Institute), February 13, 2024.

Shimabukuro, Jon O., and Julie M. Whittaker. 2014. Federal Labor Relations Statutes: An Overview. Congressional Research Service (CRS) R42526. Updated September 5, 2014.

Steiner, Elizabeth D., Ashley Woo, and Sy Doan. 2024. Larger Pay Increases and Adequate Benefits Could Improve Teacher Retention: Findings from the 2024 State of the American Teacher Survey. RAND Institute, November 20, 2024.

The Commonwealth Institute. 2022. History of Labor in Virginia: An Interactive Timeline and Map. Accessed January 12, 2026.

Valletta, Robert G., and Richard B. Freeman. 1988. “The NBER Public Sector Collective Bargaining Law Data Set.” Appendix B in When Public Employees Unionize, edited by Richard B. Freeman and Casey Ichniowski. NBER and Univ. of Chicago Press.

Virginia Department of Human Resource Management (VDHRM). 2025. Biennial Compensation Report. November 2025.

Walter, Karla. 2026. Virginia Workers’ Biggest Win in Decades Could Come in 2026. Center for American Progress, January 12, 2026.

Walter, Karla, and David Madland. 2025. Union Trigger Laws 101 How States Can Protect Workers if Federal Labor Law Falls. Center for American Progress, November 19, 2025.

Watts, Parker. 2021. “Labor Day Reflections on Race, Power, and Organized Labor in Virginia.” The Commonwealth Institute, September 1, 2021.

Wething, Hilary. 2024a. “Today’s Teacher Shortage Is Just the Tip of the Iceberg: Part I.”“Today’s Teacher Shortage Is Just the Tip of the Iceberg: Part I.” Working Economics Blog (Economic Policy Institute), October 9, 2024.

Wething, Hilary. 2024b. “Today’s Teacher Shortage Is Just the Tip of the Iceberg: Part II.” Working Economics Blog (Economic Policy Institute), October 16, 2024.

Wilkinson, Nolan. 2025. “Proposal to Allow Frederick City Employees to Unionize Tabled.” The Frederick News-Post, September 25, 2025.

The NLRB is the sole agency responsible for interpreting and enforcing the NLRA for more than 100 million private-sector workers. However, Trump has attacked the agency’s independence, illegally firing Board Member Gwynne Wilcox because he did not like her decisions “disfavoring the interests of employers.” Further, Trump issued Executive Order (EO) 14215 giving himself and the attorney general the authority to issue interpretations of the law that place independent agencies like the NLRB under their control. Congress designed the Board to function as an independent quasi-judicial agency, with board members deciding cases based on the law and evidence. The NLRB’s independence is essential and supported by its legislative history and decades of jurisprudence.

Currently, the Board has only one remaining member. Trump nominated Scott Mayer, the chief labor counsel at Boeing, and James Murphy, a longtime NLRB lawyer, to be members of the Board. If confirmed, they would establish a Republican majority at the Board, but their confirmation would do nothing to address the threat to the agency’s independence. At a recent hearing on their nominations, they stated that, as Board members, they would “follow the law” but failed to acknowledge that Trump’s EO 14215 essentially equates Trump’s position to “the law.” Further, after Scott Mayer faced hard-hitting questioning by Senator Josh Hawley during his nomination hearing and was subsequently dropped from a committee vote, the prospects of a quorum at the NLRB continue to be uncertain.

Even once the government shutdown concludes and regional offices resume case handling, the absence of a quorum and concerns around the agency’s lack of independence will create obstacles for workers who are trying to exercise their rights under the NLRA. By firing Wilcox for “disfavoring the interests of employers,” Trump has created the expectation that future Board members are expected to side with employers over workers, effectively destroying the agency’s independence and robbing private-sector workers of the only forum available to them to protect their organizing and collective bargaining rights.

Despite claiming to be pro-worker, President Trump has consistently put forward policies that benefit employers over workers. If the Trump administration really cared about workers, they would sufficiently fund worker protection agencies. Instead, they have proposed decreasing the budgets of these agencies. If the Trump administration really cared about workers, they would propose regulations that strengthen and expand worker protections. Instead, they have put forward a deregulatory agenda that make workers less safe and more vulnerable to wage theft and pursued an anti-immigration and anti-equity agenda that will make all workers more vulnerable to labor exploitation. If the Trump administration really cared about workers, they would pass labor law reform that would ensure all workers would have the right to organize and bargain collectively. Instead, President Trump has stripped federal workers of their collective bargaining rights and Congress has failed to pass meaningful labor law reform. It is now up to Congress to defend the independence of the NLRB and to protect workers’ rights.

During the last federal shutdown in 2018–2019, the BLS did not suspend its activities and released its employment situation report as normal. In fact, this is the first time in 12 years that an employment situation report was delayed.1 In addition, the BLS is meant to start collecting data for the October employment report next week. If the shutdown continues, it’s possible that, for the first time in at least six decades, there will be a full month gap in data about jobs and unemployment in the U.S. economy. While nongovernment datasets can provide some limited insights into employment levels, none can replicate the supply side of the labor market, which is particularly important as immigration flows have slowed dramatically. In short, the shutdown (and potentially the attempted politicization of key government data-collection agencies) could leave policymakers flying blind just as the economy encounters real turbulence.

Fortunately, there is one government dataset—collected at the state level—that still offers a useful and up-to-date read on one key angle of the labor market: unemployment insurance claims records. Every week, the Department of Labor’s (DOL) Unemployment Insurance (UI) Weekly Claims News Release tells us how many people filed for unemployment insurance (initial claims) and how many people received unemployment insurance benefits (continued or insured unemployment).2 These data are reported separately for regular state programs, federal programs, and other smaller categories. Because of the government shutdown and ceased activities, DOL has stopped releasing the Weekly Claims News Release (the last one was on September 25). However, each state’s labor department has continued to collect the information and by and large these data are available on the DOL website for researchers to access.3 Therefore, we here at EPI have continued to analyze the present the data on EPI’s Unemployment Insurance Claims landing page.

The fingerprints of Trump policy decisions are most clearly found in the distinct rise in federal claims—claims filed specifically by workers laid off from federal agencies. However, we are also seeing troubling trends in UI claims in regular state programs, particularly in the Washington, D.C., metropolitan area. Figure A illustrates continued (insured) unemployment insurance claims for federal workers now compared with the same week in the prior year. The latest data show significantly higher continued unemployment insurance claims for federal workers than this time last year: Nearly 8,500 claims the week ending September 20, 2025, compared with only about 4,000 claims the same week in 2024. Claims are more than double what they were a year ago. The figure clearly shows when the divergence in trend began.

Figure A

Not surprisingly, those federal layoffs and subsequent federal UI claims are felt more acutely in the Washington, D.C., metro area. For these numbers (as shown in Figure B), we construct four-week moving averages, compared with the same four weeks in the prior year, to smooth out some volatility in the data. In D.C. proper, federal continued claims increased over 1,000% from the same time last year. In nearby Maryland, federal claims are up over 500% and federal claims in Virginia are double compared with the same period in 2024.

Figure B

With thousands of workers leaving federal payrolls on September 30, we expect these numbers to continue to climb in the coming weeks. According to Office of Personnel Management (OPM) Director Scott Kupor, 2025 will end with 300,000 fewer federal workers. There are some signs that economic weakness has extended beyond the federal workforce. In the latest jobs report released, payroll employment growth has slowed dramatically, the hires rate has softened, and Black and young adult unemployment rates have ticked up over the last several months.

So far, the continued regular state claims (excluding federal workers) are only up slightly from last year. Over the last three months, continued claims have averaged 90,000 higher than those the same period last year (about a 5% increase), but that’s not unusual so it remains more an indicator to watch rather than anything alarming at this point in time. Figure C shows continued UI claims now compared with the same time last year. Given seasonality in these data, it’s useful to compare year over year to identify trends. If the level of claims continues to break away from last year, it will mean we may be heading toward an even weaker labor market.

Figure C

While the national numbers of continued UI claims are not yet showing up as recessionary, there are clearly pockets of this country that are experiencing greater labor market weakness. For example, year-over-year percentage increases in continued claims for the District of Columbia, Virginia, and Maryland are 53%, 29%, and 25%, respectively. These states represent three of the five highest year-over-year increases, with Connecticut (47%) and Oregon (27%) being the other two states according to the latest data for the week ending September 27, 2025.

UI claims are essentially a signal about the pace of layoffs in the labor market. Increased layoffs would obviously signal a deteriorating labor market, but there are clearly ways for labor markets to weaken substantially even before large increases in layoffs. For example, if firms largely avoid layoffs but significantly reduce new hiring, then unemployment will rise as new labor market entrants fail to secure employment. Hence, as valuable as UI data are, they only give us one angle of potential labor market weakness. For the 360-degree view of the labor market needed to make informed policy decisions, the federal statistical agencies need to come back online and be allowed to do their work with ample resources and free of any political interference.

All the data above and more will be updated weekly every Thursday on EPI’s new UI claims landing page. UI data will continue to play an important role throughout the government shutdown and serve as one of the timeliest indicators of the labor market moving forward. Hopefully, vital BLS workers will be called back to work as soon as possible to collect and process data for the monthly jobs report so we don’t miss an entire month’s worth of essential complementary labor market data.

Notes

1. During the October 2013 federal shutdown, the September employment situation report was delayed 18 days and was released six days after the shutdown ended. The subsequent October report was released seven days late due to delays in data collection. During the 1995–1996 federal shutdown, the December report came out 14 days late on January 19, 1996. These are the only three occurrences of delays in the BLS employment situation report due to federal shutdowns.

2. Unemployment insurance receipt should not be confused with a count of the unemployed, which is measured as workers without a job who are actively seeking work through a separate BLS survey. To be counted among those with continued (or insured) unemployment insurance, a claim has to be filed and approved. The recipiency rate— the insured unemployed in regular programs as a percentage of the total unemployed—is only 27% nationwide, which means the count of workers receiving unemployment insurance misses most unemployed workers.

3. There have been some minor exceptions and minor delays in reporting. For instance, Massachusetts and Arizona were released with a delay two weeks ago, but then the data was eventually filled in. For last week’s data, Massachusetts was still missing but we were able to input the data straight from the MA Department of Economic Research website. Hawaii and Virgin Islands also had missing data for the latest release so we imputed using data from the prior week. Our state analysis is done on a four-week moving average to smooth out some volatility so this imputation is likely not a large assumption to the trends we are seeing.

Summary:

• From 1916–1970, 6 million Black Americans fled the violence and economic oppression of the rural South. Among the legacies of this Great Migration is the concentration of Black Americans in urban areas.
• Today, 10 metro areas—New York, Atlanta, D.C., Chicago, Dallas, Houston, Philadelphia, Miami, Los Angeles, and Detroit—have the largest Black populations in the country and are home to 38.6% of the Black labor force.
• This analysis finds evidence of relative economic prosperity and hardship across and within these 10 metro areas, demonstrating huge stakes associated with federal budget and job cuts, anti-equity backlash, and growing concerns of a self-inflicted recession.
• Since taking office, Trump has pushed an anti-equity agenda that rolls back the clock on hard-won federal policies establishing equal employment and core labor standards and protections for Black workers. The passage of those laws was pivotal in expanding rights and opportunities sought across the decades of the Great Migration and Civil Rights Movement.
• Mass firings of federal employees and budget cuts will have harmful consequences for Black Americans across class lines.
  • Given the large share of the state’s federal workers in metro Atlanta (51% of GA total), D.C. (60% of combined D.C., MD, VA & WV total) and New York (63% of combined NY & NJ total), Trump’s attack on the public sector threatens what has historically been a pathway to better, more equitable jobs for Black Americans—thanks to robust anti-discrimination policies and public-sector collective bargaining.
  • Although these cities anchor metro areas with some of the highest Black median household incomes in the nation, federal grant funds provide critical support to under-resourced inner-city communities. Many of those federal investments in low-income and working-class communities were cut in the Republican-led budget reconciliation bill.
• In addition to his attacks on equity and workers’ rights, Trump’s policy path leads straight to recession—jeopardizing Black workers’ labor market gains in recent years, including historically low unemployment and faster wage growth.
• Based on 2023 estimates from the American Community Survey, metro area Black unemployment was lower than the Black national average in Atlanta, D.C., Dallas, Miami, and Philadelphia.
• While overall real median household income declined 1.1% between 2019 and 2023, Black median household income grew by 2.8%.
• In 2023, Black median household income exceeded the national median of $53,927 in all but two (Chicago and Detroit) of the metros observed. It was highest in the D.C. ($89,912) and Atlanta ($70,969) metro areas.
• In the face of federal rollbacks of civil and worker’s rights and growing concerns about recession, state and local governments should act to maintain and strengthen basic protections, like minimum wage and unemployment insurance, while continuing local efforts to advance racial equity and justice. However, local leaders in red states, like Florida and Texas, face state-imposed obstacles to passing progressive economic and racial justice policies. 

The concentration of Black Americans in urban areas is one of the legacies of the Great Migration—the period between 1916 and 1970 when 6 million Black Americans fled the violence and economic oppression of the rural South in search of safety and better job opportunities in cities throughout the Northeast, Midwest, and West. But even in non-Southern U.S. cities, many continued to face poor working conditions as well as employment and pay discrimination, leaving them just marginally better off than in the places they fled. Rather, significant gains in economic status only became possible through sweeping changes to federal labor and civil rights laws born from years of protest and political pressure during the decades of the Great Migration and beyond. While landmark federal labor laws passed during the 1930s improved working conditions for most white workers, many Black workers were initially excluded from the right to organize unions under the National Labor Relations Act of 1935, or minimum wage and overtime pay protections under the Fair Labor Standards Act of 1938. The steady demand for equal protection under these and other laws led to the passage of the Civil Rights Act of 1964, prohibiting segregation at all places of public accommodation and discrimination by employers and labor unions based on race, color, religion, or national origin. These federal labor and civil rights laws set a national standard for fair working conditions and equal treatment that some state and local governments have enhanced to varying degrees based on local political and economic conditions. In many cities with large Black populations, policy decisions and local economic conditions yield both positive and negative results for Black Americans.

The diverse experiences of Black people across metro areas1 exemplify the notion that Black America is not a monolith. The unique political and economic dynamics in each place produce relative economic prosperity and hardship that make up the collective economic experience of Black Americans. However, even areas once sought as places of refuge and economic opportunity are now contending with a president whose actions undermine federal laws establishing equal employment and other civil rights, as well as core labor standards and protections.

Since taking office, Trump has pushed a revisionist version of history that erases any acknowledgement of the racism, violence, and oppression that created persistent racial inequities and forever changed the demographic composition of U.S. cities. This includes issuing a barrage of executive orders that roll back the clock on hard-won federal policies that have helped Black Americans attain many of the opportunities sought through the Great Migration and Civil Rights Movement of the 1950s and 1960s. Instead, Trump’s anti-diversity, equity, and inclusion (DEI) rhetoric centers white men as the primary victims of discrimination and calls into question the “merit” or qualifications of almost anyone else. He has used those false narratives to justify eliminating the use of disparate impact liability and redirecting enforcement priorities at the Equal Employment Opportunity Commission and Office of Federal Contract Compliance Programs—severely weakening the two agencies responsible for making sure employers comply with anti-discrimination law. Trump’s anti-equity agenda—along with efforts to decimate the federal workforce, cut services and programs that working families and low-income communities rely on, and attacks on labor standards and workers’ union and collective bargaining rights—are just some of the many harmful actions that hurt workers and put the economy at risk (McNicholas et al. 2025).

As a benchmark for assessing what’s at stake under Trump’s harmful economic policies and anti-equity agenda, we explore economic conditions for Black Americans in 10 U.S. metro areas with the largest Black populations. This list includes nine of the country’s largest metros overall—anchored by the principal cities of New York, Atlanta, Washington, D.C., Chicago, Dallas, Houston, Philadelphia, Miami, and Los Angeles—as well as Detroit. Today, these 10 metro areas, including four in Southern states, are home to 38.6% of the Black labor force and 26.9% of the total labor force. Each of these metro areas account for at least one-third of their respective state’s Black labor force. Additionally, Black Americans are the largest demographic group in the principal cities of Detroit (75.9%), Atlanta (46.4%), Washington, D.C. (40.9%), and Philadelphia (39.5%) and represent over one-fifth of the population in all but Los Angeles (8.5%) and Miami (14.1%).

We examine unemployment rates, median household income, the size of the federal workforce, and federal grant dollars awarded to these places in 2023. Our analysis compares economic outcomes for Black Americans across metro areas and relative to national and state averages and considers some of the factors contributing to those differences. This cross-metro analysis allows us to go beyond a simple categorization of economic conditions as good versus bad or equal versus unequal. Instead, it raises important questions about why conditions are better in some places and worse in others. Finally, we explore the potential for state and local policy to provide a buffer against damaging federal actions that increase the risk of recession, harm workers, and exacerbate racial inequities.

Metro area unemployment rates and income reveal relative economic prosperity and hardship among Black Americans

The chaotic and harmful actions of the second Trump administration have raised the risk of recession for the otherwise strong and resilient labor market Trump inherited. One of the greatest casualties of a completely self-inflicted recession would be the labor market gains experienced by Black workers in recent years, including historically low unemployment and faster wage growth (Cid-Martinez, Maye, and Marvin 2025).

According to official estimates from the Bureau of Labor Statistics (BLS), the average annual Black unemployment rate in 2023 was a record low (5.5%), compared with an overall national unemployment rate of 3.6%. This analysis compares estimates of national, metro, principal city, and state unemployment rates for Black workers using data from the American Community Survey (ACS). ACS provides better coverage of metro area and principal city Black unemployment rates, but 2023 national estimates are higher than those reported by BLS due to differences in the survey reference periods.2

As shown in Figure A, in 2023, five of the 10 metro areas—Washington, D.C., Miami, Atlanta, Dallas, and Philadelphia—each outperformed the ACS-estimated national average of 7.2% for Black Americans. Across all 10 metro areas, Black unemployment ranged from a low of 5.6% in metro Atlanta to a high of 10.4% in the Chicago metro area.

Figure A

Figure B reveals that metro area Black median household income exceeded the national median of $53,927 in all but two of the metros observed. The exceptions were the Midwestern metro areas of Chicago and Detroit—the same places where Black unemployment was highest in 2023. Although incomes of Black residents in metro Chicago and Detroit were lower relative to the national median and other metros, their incomes were higher than the median Black household in the states of Illinois and Michigan. Median Black household incomes in those states were also the lowest among the states observed for this analysis.

Figure B

At the opposite end of the scale, Black median household income was highest in the D.C. ($89,912) and Atlanta ($70,969) metro areas. Notably, metro D.C.’s Black median household income was also significantly higher than the overall national median of $77,719. Black households in the New York ($65,758) and Dallas ($63,376) metro areas also had substantially higher median incomes than the typical Black household nationwide.

Relatively higher incomes and lower unemployment in metro D.C. and Atlanta are consistent with the fact that these places also had the largest shares of highly educated Black workers. The share of Black college graduates in the D.C. (40.8%) and Atlanta (36.2%) metro areas is well above the share of Black college graduates nationally (26.2%) and at least as high as the share of all college graduates nationwide. In contrast, the Detroit metro area had the lowest share of Black college graduates (20.8%). As we will discuss later, the high concentration of federal employment and related professional job opportunities in metro D.C. is a likely factor in attracting Black college graduates to the area.

The strength of the 2023 labor market and rise in employment among Black Americans also contributed to the growth in median Black household income. As shown in Figure C, while overall real median household income declined 1.1% between 2019 and 2023, Black median household income grew by 2.8%. The spike in inflation during this period generally muted real income growth; however, increased employment of Black workers managed to counteract the negative impact of inflation on income (Moore and Maye 2023). Black median income growth also outpaced total income growth in six of the 10 observed metro areas—Miami, Atlanta, Chicago, Detroit, Philadelphia, and Dallas. In places where real incomes declined, the decline was smaller among Black Americans.

Figure C

Echoes of the Great Migration

Across all the observed metro areas, there is a clear distinction in the average economic status of Black Americans in the principal city compared with the broader metro area, which includes surrounding suburbs. We characterize these consistent place-based differences as echoes of the Great Migration. One of the factors contributing to these differences was “white flight”—the mass relocation of white people from urban centers to suburbs in response to the rising Black population in cities during the Great Migration. More than just a demographic shift, white flight initiated a draining of economic resources away from cities that continued as more affluent Black families moved to suburbs following the passage and enforcement of fair housing laws.

Across all 10 metro areas, Black unemployment was higher in principal cities compared with the broader metropolitan statistical area (MSA) and the state. Referring again to Figure A, in 2023, Black unemployment in the city of Atlanta (8.4%) was 2.8 percentage points higher than metro Atlanta where Black unemployment was lowest and closest to the overall national average. Similarly, the Black unemployment rate was more than 3 percentage points higher in the cities of Washington, D.C. (9.9%) and Miami (9.7%), relative to the respective metro areas. In Chicago (12.3%) and Detroit (11.7%), Black unemployment was nearly 2 percentage points above metro area rates that were already at least 2 percentage points above the Black national average. Recession-level Black unemployment rates in the Midwestern cities of Chicago and Detroit are also reflected at the state level for Illinois and Michigan. For Detroit, in particular, a second wave of white flight followed the post-1980s decline in manufacturing jobs and union density, once critical sources of Black economic mobility in the region (Scott et al. 2022). 

Similarly, Black median household income was substantially lower in principal cities than the metro area and the state. Figure B shows that across all 10 metro areas, Black median household income was at least $6,400 lower in the principal city than in the metro area. The largest gap was in the D.C. metro area, where there was a difference of nearly $30,000 between Black median household income in the principal city of Washington, D.C., and the broader metro area. In other metro areas with relatively high Black median incomes, like metro Atlanta and Dallas, the difference was $17,066 and $14,849, respectively. However, even in the Detroit metro area where Black incomes were lowest, there was a gap of more than $10,000 between households in the principal city and those in the broader metro area.

Federal grants are critical to filling resource gaps in urban areas

Federal grants are critical to filling the resource gaps in principal cities since those funds are often directed toward poorly resourced communities. Table 1 provides a summary of federal grant dollars flowing to each city in recent years based on data available at USAspending.gov.3 The grant amounts include funds from block, formula, project, and cooperative agreement grant obligations, and encompass COVID-19-related obligations from the American Recovery Plan Act.

As shown in Table 1, D.C. and New York received the most in federal grant funds (an annual average of more than $6 billion each over fiscal years 2022–2024) followed by Atlanta. However, when adjusted for population size, D.C. and Atlanta had the highest per capita averages ($9,158 and $6,769 per person, respectively).

Although these cities anchor metro areas with some of the highest Black median household incomes in the nation, federal grant funds are directed toward the needs of less advantaged residents. For example, over the last three years, Atlanta’s largest federal grants were from the Department of Education to support students from low-income families in Title I schools. The largest federal grants to Washington, D.C., were from the Environmental Protection Agency, authorized through the Inflation Reduction Act to reduce greenhouse gas emissions and other pollutants and to bring green projects to low-income and disadvantaged communities. Most of the federal grant dollars going to the city of New York were from the Department of Housing and Urban Development (HUD) to support public housing.

The Department of Health and Human Services (HHS) was a major source of federal grants awarded in nine of the 10 cities. While the agency is most often associated with Medicaid funding for states, HHS funds programs like Head Start, HIV emergency relief, cancer treatment, and children’s hospitals at the city level. Across all 10 cities, the Departments of HHS, HUD, and Transportation were commonly among the top three awarding agencies, representing critical investments in health and well-being, housing, and transportation infrastructure in urban areas.

Table 1

However, due to the upside-down priorities of the current Congress, many federal investments in low-income and working-class communities have been cut to give tax cuts that overwhelmingly benefit the wealthy. In July 2025, Congress passed the Republican-led Budget Reconciliation Bill (or H.R. 1) which guts Medicaid and slashes the Supplemental Nutrition Assistance Program (SNAP), while also eliminating clean energy tax credits established under the Inflation Reduction Act, potentially putting over half a million jobs at risk (Seeburger et al. 2025). The bill results in 16 million fewer people having health coverage through 2034 and places approximately 11 million individuals at risk of losing SNAP benefits. Medicaid cuts alone could depress local spending enough to force the loss of 850,000 jobs (Bivens 2025). Overall, the Congressional Budget Office estimates that annual income for households in the lowest decile would decline by about $1,600—highlighting the devastating impact this bill will have on vulnerable families and the added strain it would place on state and local budgets (CBO 2025).

The city of Washington, D.C., was placed in a uniquely precarious position when the House’s reconciliation bill reverted D.C. to its 2024 budget. That decision slashed the city’s 2025 budget by more than $1 billion, an impossible deficit to close without laying off many city employees and severely cutting public programs and services. At of the time of this report’s publication, the House had yet to vote on an unanimously passed Senate fix that would reverse the budget cuts, needlessly placing the city’s budget in limbo. In response to House’s inaction, the mayor of D.C. proposed a 2025 supplemental budget that cuts services and freezes hiring to cover the budget gap while avoiding layoffs. Combined with federal job cuts, these actions represent a major blow to the area’s economic base and fiscal autonomy that would be especially tragic for Black Americans across class lines in the D.C. metro area.

Federal jobs cuts threaten relative economic security for the Black middle class

For Black Americans, public-sector employment has historically been a pathway to better, more equitable job opportunities. Through executive actions and legislation introduced in the 1960s and 1970s, the federal government once led in adopting anti-discrimination and affirmative action practices that increased the number of Black workers in the federal government. In the decades that followed, federal jobs have provided stable employment, excellent benefits, and opportunities for career advancement that supported a robust Black middle class. Public-sector collective bargaining has also helped to maintain the quality of these jobs through labor contracts that foster transparency through clearly defined policies and pay structures. This plays a critical role in reducing discrimination and providing workers with critical protections and recourse against other forms of exploitation or mistreatment.

That history stands in sharp contrast to the Trump administration’s efforts to dismantle the public sector, beginning with workers in DEI departments within federal agencies. Trump’s attacks on the federal workforce also include attempts to limit the approval of collective bargaining agreements with federal workers. The targets of such actions include skilled and often highly educated Black workers who typically experience less employment volatility, even during economic downturns. Nationally, Black federal workers average 12.3 years of service and 45.3% hold at least a bachelor’s degree (compared with 26.2% overall) (Maye and Marvin 2025).

While federal jobs losses will obviously have an impact in the D.C. metro area, over 90% of federal workers are employed outside the nation’s capital (McNicholas and Oakford 2025). The ripple effects from large-scale job cuts are expected to show up in higher unemployment and the disruption of critical public services and government functions throughout the nation. Table 2 shows the number of federal workers who live in each of the 10 metro areas, as well as the metro’s share of total federal jobs in the state. For metro areas that cross state lines, including metro D.C., Chicago, New York, and Philadelphia, we calculate metro area jobs as a share of the combined state totals. Over 300,000 federal workers reside in the D.C. metro area, accounting for 60% of all federal workers in the District of Columbia and surrounding states of Virginia, Maryland, and West Virginia. The second largest number of federal workers (over 100,000) are in the New York metro area, representing 63% of all federal workers in New York and New Jersey. Among the single state metro areas, Atlanta is home to over half (51%) of Georgia’s federal workforce and 47% of Michigan’s federal workers are in metro Detroit.

Table 2

While metro-level federal employment numbers by race are unavailable, EPI analysis of state-level data from the Office of Personnel Management (OPM) reveals that 43.8% of Georgia’s federal workers are Black—the largest share in the country (Wilson 2025). The District of Columbia, Maryland, and Virginia each have larger numbers of federal workers than Georgia, and Black workers are just over one-fourth of the federal workforce in each those states—28.8% in D.C., 27.9% in Maryland, and 26% in Virginia.

Between January and July of 2025, BLS reported a loss of 84,000 net federal jobs but the full impact and consequences of those job losses are yet to be revealed. Though thousands of fired federal workers were reinstated by court orders in February 2025, the Supreme Court later sided with the Trump administration when it lifted a lower court’s block on mass federal layoffs, clearing the way for the Trump administration to proceed with planned large-scale cuts to the federal workforce. However, DOGE’s lack of transparency and the Trump administration’s broader data erasure efforts make it difficult to keep track of whether job cuts fall disproportionately on certain groups of workers.4

Troubling changes at the EEOC stifle equity and would be harmful to economic growth

As a large independent federal agency, the Equal Employment Opportunity Commission (EEOC) is relatively small compared with many cabinet level agencies experiencing job cuts. Headquartered in Washington, D.C., the EEOC operates 53 district and field offices across the country,5 including locations in each of our 10 featured cities with large Black populations. For 60 years, the EEOC has been integral to the enforcement of U.S. anti-discrimination laws—efforts that helped reduce employment discrimination and boost average living standards by an estimated $493 to $1,233 per person since 1960 (Maye and Wilson 2025). However, troubling changes to the structure and priorities of the agency paralyze some of the commission’s key functions and weaken enforcement against racial and gender discrimination—the most common types of discrimination claims filed (Mark, Gurley, and Rein 2025).

Instead, the Trump administration has redirected the EEOC’s priorities to focus more on investigating so-called DEI-motivated race and sex discrimination and anti-American national origin bias and discrimination (DOJ 2025; EEOC 2025). Trump also issued an executive order designed to end the use of disparate impact liability, a legal standard that works to prevent otherwise “race-neutral” policies and practices from perpetuating racial inequities (EPI 2025b). This restructuring of priorities threatens to turn the mission of the EEOC on its head by framing equity efforts intended to remedy decades of documented employment discrimination as discriminatory.

Just as the presence of EEOC offices in these cities signaled the federal government’s nationwide vigilance over employment discrimination, efforts to undermine the agency signal that employment discrimination—particularly against racial, ethnic, sexual, or religious minorities—will go unchecked. The impact of those changes extends beyond the millions of Black Americans working in and around these 10 cities alone and erodes workplace equity writ large.

State and local policy levers

As the Trump administration pushes the federal government toward a more anti-worker and anti-equity stance, decisions made by state and local policymakers will determine what kinds of protections workers in their states and cities will retain. Table 3 presents a sample of state and local policy positions related to workers’ rights for the ten metro areas featured in this analysis. These positions represent the relative progressivity of those state and local governments which could indicate their propensity to provide some buffer against harmful federal actions that raise the risk of recession, weaken labor standards, and exacerbate racial inequities. These policies include unemployment insurance (UI), minimum wage, paid leave, state preemption of local minimum wage or paid leave policies, and right-to-work laws. As a measure of the likelihood that state and local leaders will fight to maintain or strengthen equity efforts, we also include the number of Black mayors elected in each city and the existence of state or local reparations initiatives.

A basic scan of state and local policies reveals that while there is some variation in the generosity of UI benefits across states, the need for expanded federal support will once again be essential for recovery from the next recession. The scan also shows that local leaders in red states face state-imposed obstacles to passing progressive economic and racial justice policies.  

Table 3

Unemployment insurance

Unemployment insurance benefits are among the most efficient sources of support to families and the economy during a recession. Since they are targeted at individuals whose income falls due to a job loss, UI benefits provide direct income support to eligible unemployed workers while also helping to stabilize aggregate demand, the largest driver of economic growth. Estimates suggest that each dollar in UI benefits can generate nearly $2 in local spending (Evermore 2024). Despite the efficiency of UI benefits, they are often the target of austerity politics fueled by exaggerated and frequently debunked claims that overly generous benefits suppress employment (Martinez Hickey and Cooper 2021). 

While adequate federal action and support for expanding UI during a recession are critical to a quick recovery, state policymakers have some flexibility in determining how their UI programs are structured and resisting the austerity impulse. As a joint state and federal program, each state can adjust its own eligibility requirements, length of time for available benefits, and maximum weekly benefits in coordination with federal guidelines. Among the states represented in Table 3, Florida and Michigan are the only two that currently cap the number of weeks benefits can be received at less than 26 weeks. However, the maximum weekly benefit for unemployed individuals varies from a high of $605 per week in Pennsylvania (Philadelphia) to a low of $365 per week in Georgia (Atlanta).

The COVID-19 pandemic revealed the potential for major federal reforms to boost UI as a macroeconomic stabilizer by enhancing the duration, generosity, and eligibility of UI benefits (Bivens and Banerjee 2021). The pandemic also exposed administrative and fiscal inadequacies in state UI systems. Federal funds were allocated by the American Rescue Plan Act (ARPA) to improve UI systems administration, prevent fraud, and increase equitable access (DOL n.d.). However, few states took steps to strengthen severely underfunded state UI systems long term by increasing their taxable wage base (Sawo and Sherer 2022). UI reform advocates recommend increasing the taxable wage base to half of the taxable maximum for Social Security (Bivens et al. 2021). The increase would result in employers paying state unemployment taxes on a larger percentage of higher wage earners’ pay, generating more revenue and sustaining more fairness, equity, and administrative efficiency over time. Among the states considered, only New York and Illinois have a taxable wage base above $10,000, but still far below the much higher recommended base of $88,500 needed to address underfunding.6

In red states, a city’s ability to enact pro-worker policies is often at the mercy of state preemption

Several states and localities across the country have established minimum wage ordinances that exceed the federal standard. Since the federal minimum wage has remained stuck at $7.25 for over 15 years, failing to keep up with rising costs and inflation, this is a critical policy lever for supporting workers and their families’ right to a livable wage (Payne-Patterson and Maye 2023). Rasing the minimum wage supports all workers, but especially Black workers who are overrepresented in low-wage occupations.

Currently, 19 states and Washington, D.C., have passed laws raising their own minimum wage to at least $15 an hour by 2027, including several cities listed in Table 3 with local minimum wages well above the federal minimum (Hickey 2024; EPI 2025a). Washington, D.C., New York, Los Angeles, and Chicago all have a minimum wage standard of at least $15 an hour and Detroit’s minimum wage increased to $12.48 in 2025.

Sadly, four cities with large Black populations—Atlanta, Dallas, Houston, and Philadelphia—have not raised their minimum wage above the federal level. In June, the Pennsylvania state House passed a bill that would raise Philadelphia’s minimum wage to $15 an hour after years of failed attempts to increase the state’s minimum wage to that level (Huangpu 2025). The House proposal now awaits approval by the state Senate. For relatively progressive cities that also happen to be in red states, state preemption laws are a major barrier to passing a higher local minimum wage. In Atlanta, workers not covered by the Fair Labor Standards Act are paid a minimum of $5.15 an hour—$2.10 below the already insufficient federal minimum wage (GDOL n.d.). While local governments are prohibited in establishing a higher city-wide minimum wage, Dallas, Houston, and Atlanta have each passed increases for city, county, or contract workers (Cooper 2024; Barrera and Heilman 2025). Apart from preemption, right-to-work laws in these states also present barriers that limit workers’ collective bargaining rights, resulting in lower wages and benefits for all workers.

While raising the minimum wage can raise living standards for low-wage hourly workers, paid family leave enables workers to avoid the difficult tradeoff between income stability and caring for family. There is no federal law that guarantees paid family or medical leave to workers; up to 12 weeks of unpaid leave are available to eligible employees under the Family and Medical Leave Act (FMLA). However, as of 2025, 13 states and Washington, D.C., have passed their own paid family leave laws (Williamson 2024). Of the states listed in Table 3, only California, New York, and the District of Columbia currently have paid leave policies on the books. In D.C. and New York, eligible employees receive up to 12 weeks of paid leave (DCPFL n.d., NYSPFL n.d.). In California, eligible employees receive up to eight weeks of paid time off (EDD n.d.). All three policies allow workers to use this leave for caring for a loved one, bonding with a child, or military assistance. In New York, employees taking paid family leave receive 67% of their average weekly wage, while in California, workers can receive about 70–90% of wages earned five to 18 months before the claim start date. D.C. Paid Family Leave provides wage replacement of 90% of wages up to 1.5 times D.C.’s minimum wage and 50% of wages above 1.5 times D.C.’s minimum wage (DCPFL n.d.).

Will local steps toward racial reckoning withstand the rising tide of federal and state anti-equity backlash?

Every city and town in the United States has its own complicated racial history to reckon with. That history is infused in local policy and politics and shapes social and economic outcomes. As is true at the national level, decisions made by local elected leaders can either widen or narrow racial disparities. Leadership also reflects and sets the tone for how a city acknowledges, confronts, and seeks to resolve current and historic racial injustice. As measures of perceived racial progressivity, we consider the number of Black mayors elected in the principal city for each metro area and whether any local reparations initiatives have been introduced since 2020. While these are admittedly imperfect metrics, we interpret them as signals of the local political will to advance racial equity and defend current efforts. However, it is uncertain how much local efforts will be jeopardized by legal challenges triggered by aggressive federal and state anti-equity policies.

Table 3 shows that among the 10 cities observed, all except Miami have elected at least two Black mayors. The cities with the longest history of Black leadership are Washington, D.C., and Atlanta, having had seven and six Black mayors, respectively. Five Black Americans have served as mayor of Detroit. Since Black Americans are the largest demographic group in each of these cities, the larger number of Black mayors elected in these cities reflects city demographics and perhaps the degree of influence Black Americans wield in local elections. A more comprehensive analysis of city management and the policy priorities of individual mayors would be needed to assess their direct impact on Black economic outcomes or racial equity.

While little progress has been made to advance the issue of reparations at the federal level, since 2020, several state and local governments have taken initiative in addressing their own histories of racial and economic injustice against Black Americans. Reparations initiatives exist in all except the three cities in red states whose governors have aggressively pushed anti-DEI legislation: Miami in Florida, and Dallas and Houston in Texas. In most places where a reparations initiative exists, activity has been at the city or county level. However, both city- and state-level initiatives exist in California and New York. Current state and local reparations efforts range from the appointment of a task force to study the issue, to exploring plan options, approving legislation, and implementing a plan. While there are open questions about whether local plans are truly reparative or will have any measurable economic effect on closing the racial wealth gap, they are at least a signal of willingness to confront and seriously consider government accountability for eliminating racial inequities (Moore 2023).7

Conclusion

The strong and stable economy Trump inherited withstood months of his administration’s harmful and chaotic policy actions before clear signs of a softening labor market became evident in the July jobs report. Large downward revisions to May and June payroll employment estimates signaled a weaker labor market than originally reported, bringing average three-month job growth down to just 35,000 net new jobs compared with 127,000 over the preceding three months. Rather than taking this sobering news as a sign that he should reconsider the current policy path, Trump misrepresented the news as a politically motivated personal attack and fired BLS Commissioner Erika McEntarfer. Such careless actions unjustifiably erode confidence in one of the world’s most respected statistical agencies and endangers sound economic decision-making.

If the Trump administration and Congress continue along the current path, there is a very real risk of a recession in the coming months—and a lot at stake for Black Americans who typically suffer higher rates of unemployment and take longer to recover lost jobs and income from a downturn. In recent years there have been economic gains that should be protected and expanded. Five metro areas in this analysis had Black unemployment rates below the national average in 2023 and the median Black household income was above the national median in eight metros. At the same time, there is evidence of persistent inequities and economic hardship that demand a commitment to long-term solutions and investment in underserved communities. Two metro areas were below national measures of Black unemployment and income, but across all 10 metro areas, principal city residents had higher unemployment and lower incomes compared with the broader metro area which includes surrounding suburbs. Trump’s anti-equity, anti-worker agenda undermines both of those objectives by decimating the federal workforce and attacking public sector unions; cutting the federal budget for Medicaid, SNAP, and other programs that benefit low-income families; weaponizing civil rights enforcement to discourage diversity, equity and inclusion; and weakening core labor standards and protections.

State and local governments have some policy levers at their disposal for improving worker protections, but the effect those policies can have on the economic well-being of Black Americans varies by place, and in some cases is conditional on federal or state actions. For example, while cities and states have some capacity to increase their minimum wage or pass paid leave policies, preemption is a major barrier for local leaders seeking to pursue more progressive policies in red states. The law allows states some flexibility to adjust the duration and amount of unemployment insurance benefits, one of the most efficient sources of income support during a recession. Yet severe underfunding of state systems due to a far too low state taxable wage base starves their capacity to make substantial improvements in the fairness, equity, or generosity of benefits without federal funding. Moreover, in a recession, there is little any state can do to expand benefits and speed recovery without increased federal support—a step we can’t assume to be a priority of the current Congress or president. Finally, while many of cities we observe could be considered more racially progressive than the country as a whole, federally led anti-DEI backlash raises the possibility of legal challenges against local policies in support of equity and racial justice.

Black America is not a monolith. That statement is an assertion of the right to self-determination and individual expression that racism denies Black Americans. It is also a reflection of the varied experiences shaped by differences in local policy, economic conditions, political influence, and culture. Still, history shows that the pursuit of collective freedom, justice, and equity for Black Americans has always required decisive national actions that raise the standards for fair and equal treatment of all people in this country. The Trump administration’s denial of that history and lowering of those standards is not just several steps backwards for Black Americans, but moves all of the United States in the wrong direction.

Notes

1. A metro area is a region that includes a principal city and surrounding cities and towns with economic and social ties to the urban core.

2. The labor market statistics produced by BLS are based on data collected in the Current Population Survey (CPS). CPS interviews are conducted in a single designated week each month and annual averages align with the calendar year, whereas respondents answer the ACS at times that vary throughout the month and year and annual figures are averaged over the prior 12 months.

3. USAspending.gov is the official open data source of federal spending information, including information about federal awards such as contracts, grants, and loans. Since annual grant totals can change as data are updated on a rolling basis, we use a three-year average to minimize the sometimes substantial effect updates can have on a single year’s grant total. A downloaded transaction summary as it existed at the time of our analysis is available upon request.

4. The OPM data used to report the share of Black federal workers are no longer publicly available.

5. Workers can call or visit EEOC field offices to ask questions about potential employment discrimination or to directly file an individual complaint. Field offices may also recommend charges for EEOC Commissioners to pursue against specific employers.

6. The $88,500 corresponds to half of the 2025 taxable wage limit for Social Security, which was $176,100, up from $168,600 in 2024.

7. In May 2025, FirstRepair and Decolonizing Wealth Project launched a mapping tool that documents state and local reparations initiatives across the United States. See: FirstRepair and Decolonizing Wealth Project, “Mapping the U.S. Reparations Movement” (web page), https://www.reparationsresources.com/.

References

Barrera, Daniela, and Greg Heilman. 2025. “New Minimum Wage in Texas for 2025: These Cities Will See an Increase.” Diario AS, January 3, 2025.

Bivens, Josh. 2025. “House Budget Bill Would Kick 15 Million People Off Health Insurance and Damage Local Economies.” Working Economics Blog (Economic Policy Institute), June 3, 2025.

Bivens, Josh, and Asha Banerjee. 2021. How to Boost Unemployment Insurance as a Macroeconomic Stabilizer: Lessons from the 2020 Pandemic Programs. Economic Policy Institute, October 2021.

Bivens, Josh, Melissa Boteach, Rachel Deutsch, Francisco Diez, Rebecca Dixon, Brian Galle, Alix Gould-Werth, Nicole Marquez, Lily Roberts, Heidi Shierholz, William Spriggs, and Andrew Stettner. 2021. “Section 2. Financing.” In Reforming Unemployment Insurance: Stabilizing a System in Crisis and Laying the Foundation for Equity. A joint report of the Center for American Progress, Center for Popular Democracy, Economic Policy Institute, Groundwork Collaborative, National Employment Law Project, National Women’s Law Center, and Washington Center for Equitable Growth. June 2021.

Cid-Martinez, Ismael, Adewale A. Maye, and Stevie Marvin. 2025. “Workers of Color Made Historic Gains Over the Last Five Years, but Trump’s Anti-Worker and Anti-Equity Agenda Threatens To Reverse This Progress.” Working Economics Blog (Economic Policy Institute), March 27, 2025.

Congressional Budget Office (CBO). 2025. Letter to U.S. House of Representatives Members Brendan F. Boyle and Hakeem Jeffries. June 12, 2025.

Cooper, Tori. 2024. “Atlanta Mayor Signs Legislation to Increase City Employee Pay.” Atlanta News First, August 20, 2024.

DC Paid Family Leave (DCPFL) (website). n.d. Accessed June 17, 2025.

Department of Labor (DOL). n.d. “American Rescue Plan Act UI Modernization Grants Map” (web page). Accessed June 13, 2025.

Department of Justice (DOJ). 2025. “EEOC and Justice Department Warn Against Unlawful DEI-Related Discrimination” (press release). March 19, 2025.

Economic Policy Institute (EPI). 2025a. “Minimum Wage Tracker” (web page). Last modified March 1, 2025.

Economic Policy Institute (EPI). 2025b. President Trump Moves To End Disparate Impact Liability That Protects People from Discrimination. April 2025.

Employment Development Department (EDD). n.d. “Paid Family Leave Benefits and Payments FAQs” (web page). Accessed June 13, 2025. 

Equal Employment Opportunity Commission (EEOC). 2025. “EEOC Acting Chair Vows to Protect American Workers from Anti-American Bias” (press release). February 19, 2025.

Evermore, Michele. 2024. “Unemployment Benefits for Striking Workers Would Have Low Costs and High Rewards.” Commentary (The Century Foundation), February 28, 2024.

FirstRepair and Decolonizing Wealth Project. 2025. “Mapping the U.S. Reparations Movement” (web page). Accessed June 13, 2025.

Georgia Department of Labor (GDOL). n.d. “Minimum Wage” (web page). Accessed June 13, 2025.

Hickey, Sebastian Martinez. 2024. “Nearly Half of U.S Workers Will Live in States With at Least a $15 Minimum Wage by 2027.” Working Economics Blog (Economic Policy Institute), December 9, 2024.

Hickey, Sebastian Martinez, and David Cooper. 2021. “Cutting Unemployment Insurance Benefits Did Not Boost Job Growth.” Working Economics Blog (Economic Policy Institute), August 24, 2021.

Huangpu, Kate. 2025. “Minimum Wage Would Be $15 in Big Counties, $12 in Smaller Ones Under Novel Bill Passed by Pa. House.” Spotlight PA, June 11, 2025.

Mark, Julian, Lauren Kaori Gurley, and Lisa Rein. 2025. “Trump Moves To Fire Members of EEOC and NLRB, Breaking With Precedent.” Washington Post, January 28, 2025. 

Maye, Adewale A., and Stevie Marvin. 2025. “Trump Attacks on Federal Agencies Have Steep Implications for Black Workers.” Working Economics Blog (Economic Policy Institute), April 10, 2025.

Maye, Adewale A., and Valerie Wilson. 2025. “Trump Is Making it Easier for Employers to Discriminate. This Stifles Equity and Hurts Economic Growth.” Working Economics Blog (Economic Policy Institute), May 27, 2025.

McNicholas, Celine, and Patrick Oakford. 2025. “A Snapshot of the Federal Workforce That Is Now Under Attack from the Trump Administration.” Working Economics Blog (Economic Policy Institute), February 21, 2025.

McNicholas, Celine, Samantha Sanders, Josh Bivens, Margaret Poydock, and Daniel Costa. 2025. 100 Ways Trump Has Hurt Workers in His First 100 Days. Economic Policy Institute, April 2025.

Moore, Kyle K. 2023. “Five Principles for Making State and Local Reparations Plans Reparative.” Working Economics Blog (Economic Policy Institute), February 15, 2023.

Moore, Kyle K., and Adewale A. Maye. 2023. “Despite a Strong Labor Market, the Choice to Allow Pandemic-Era Public Assistance Programs to Expire Increased Poverty Across All Racial Groups in 2022.” Working Economics Blog (Economic Policy Institute), September 18, 2023.

New York State Paid Family Leave (NYSPFL). n.d. “New York Paid Family Leave Updates for 2025” (web page). Accessed June 13, 2025.

Payne-Patterson, Jasmine, and Adewale A. Maye. 2023. “A History of the Federal Minimum Wage.” Working Economics Blog (Economic Policy Institute), August 31, 2023.

Sawo, Marokey, and Jennifer Sherer. 2022. “Strong and Equitable Unemployment Insurance Systems Require Broadening the UI Tax Base.” Working Economics Blog (Economic Policy Institute), May 6, 2022.

Scott, Robert E., Valerie Wilson, Jori Kandra, and Daniel Perez. 2022. Botched Policy Responses to Globalization Have Decimated Manufacturing Employment with Often Overlooked Costs for Black, Brown, and Other Workers of Color. Economic Policy Institute, January 2022.

Seeberger, Colin, Andrea Ducas, Lily Roberts, Shannon Baker-Branstetter, Kennedy Andara, and Kyle Ross. 2025. “The Devastating Harms of House Republicans’ Big, ‘Beautiful’ Bill by State and Congressional District.” Center for American Progress, May 2025.

Williamson, Molly Weston. 2024. The State of Paid Family and Medical Leave in the U.S. in 2024 (fact sheet). Center for American Progress, January 2024.

Wilson, Valerie. 2025. Black Federal Workers by State (fact sheet). Economic Policy Institute, April 2025.

Unfortunately, many in the U.S. fail to recognize how central the public sector is to their daily quality of life. Further, these workers and the public sector generally are often maligned by lawmakers seeking to undermine public agencies and the workers that staff them. This facilitates disinvestment in the public sector. Over the last few decades, public-sector wages have failed to keep up with the cost of living, retirement benefits have been cut, and workloads have steadily increased as workers have left or been pushed out of these jobs. These declines in public-sector job quality across the South have led to higher turnover rates, understaffed agencies, and a decline in the quality of public services. 

The decline in public-sector job quality across the South disproportionately harms Black workers, especially Black women, their families, and communities. Black workers have historically faced widespread racial discrimination in the private sector in hiring, job assignment, and pay. The situation was even worse for Black women who faced sexism in addition to racism. This often meant Black women were limited to the most menial jobs, most commonly finding work as domestic workers in private households and as agricultural laborers. 

Legislative and executive actions taken in the 1960s and 1970s made the public sector—especially at the federal level—a crucial source of employment opportunities for Black workers. Today, the public sector continues to provide significant economic opportunities for Black women.

Table 1 shows that both nationally and across the South, Black women are disproportionately represented among public-sector workers compared with their share of the total workforce. This disproportionate representation is greatest across the South: Black women are 9.7% of the total workforce and 9.0% of the private sector but make up 13.2% of federal, 15.5% of state, and 12.8% of local government workers. 

Table 1

Table 1 shows Black women’s representation across those Southern states with adequate sample sizes. Black women make up more than one in five local government workers and more than one in four state government workers in Mississippi, Georgia, Louisiana, and Maryland. They also make up 22.5% of the federal workforce in Georgia, 18.5% in Maryland, and 11.5% in Texas. 

The most highly educated Southern Black women work in the public sector

These Black women are some of the most highly skilled and educated Black women in the workforce. Table 2a shows the educational attainment of Southern Black women by sector. Overall, just 7.8% of Southern Black women have less than a high school diploma, just over one in four have only a high school diploma, while roughly one in three have either some college education (35.3%) or a bachelor’s degree or more (31.2%.) Among Southern Black women working in the public sector, 43.8% of those in federal government and roughly half working in state (49.3%) and local (50.9%) government have at least a bachelor’s degree compared with just 26.3% of those in the private sector.

Table 2a

Table 2b shows how Southern black women at each level of education are distributed across employment sectors. As Black women’s educational attainment increases, so does their representation in the public sector. For example, 78% of all Southern Black women work in the private sector but among those with less than a high school diploma, 89.8% are in the private sector. 

Table 2b

Conversely, among Southern Black women with a bachelor’s degree or more, just 65.8% work in the private sector. In fact, Black women across the South with a bachelor’s degree or more are at least twice as likely as Southern Black women with only a high school diploma to work in federal (8.4% vs. 4.2%), state (10.5% vs. 4.3%), and local (15.3% vs. 6.6%) government. 

Southern Black women in the public sector disproportionately serve the public as managers, educators, and professionals

Black women in the public sector disproportionately fill jobs in “management, business, and financial operations” (management) and “professional and related occupations” (professional).

Table 3 shows Black women’s occupational distribution across broad occupational groups by sector. The single largest occupational group for Black women in the private sector is sales and office occupations (31.4%), followed by service occupations (25.5%), and then professional and related occupations (19.3%).

Table 3

In the federal workforce, Black women are also disproportionately employed in “sales and office occupations” (31.2%). Most women in these jobs work in office occupations but a small percentage work as supervisors of sales workers, cashiers, retail salespersons, and other sales and related jobs. However, more than half of Black women in the federal workforce are employed in management (25.1%) and professional (25.5%) occupations. In state and local government, more Black women work in professional occupations (41.9% and 49.0%) than any other profession. Table 3 shows they work predominantly in education and in community and social service jobs—jobs that provide critical direct services to the public. 

Public-sector cuts hurt everyone

Efforts by the Trump administration and congress to cut the federal workforce, cut funding to states, and ongoing state-level efforts to cut public services and attack public-sector workers will harm the Black women who hold many of these jobs. Many of the state and local public-sector workers who have been pushed out by declining job quality and the more than 260,000 federal workers estimated to have either been fired, taken a buyout, or to have retired are facing increasing economic hardship as they are faced with a labor market with declining prospects. 

The impacts of public-sector job cuts are not limited to the workers themselves but can cause potentially irreparable harm to communities across the nation. At the most basic level, the rapid rise in unemployed workers can cause ripples through local labor markets as the ability of these workers to patronize private-sector businesses falls. 

Workforce cuts across the public sector will also mean fewer workers available to administer basic services such as social security benefits or to address the concerns of social security recipients facing longer wait times. It means declining care for veterans and for geriatric and autistic patients. It means a lack of disaster preparation. And it could mean the loss of federal child care centers and other supports that families rely on. 

While the contributions of public-sector workers are often overlooked, their absence will certainly be felt by all of us.