Patrick Jones: The federal workforce in Spokane has been shrinking compared to our economy

“Unaccountable bureaucracies,” “waste,” “buildings filled with bloat,” “spending out of control.” With these justifications, Elon Musk’s DOGE has up to now enjoyed a blank check from the new administration to dismiss a large chunk of the federal workforce … with little evaluation of actual waste.

It is not easy to evaluate claims of waste and bloat. There are no published measures of productivity for government services, as we find for the private sector. To do that, we would first need to establish government’s “output.” And the federal government hardly produces one good or service. A quick list of outputs of regional interest includes: maintaining national defense; ensuring air travel safety; facilitating the transportation of goods and people; reducing poverty; limiting deaths from epidemics; developing new products from agricultural research; providing insights from weather forecasting; assuring reliable power and flood control; fighting forest fires; and monitoring air and water quality.

In fact, the outcomes we expect from the federal government could run many columns. Suffice to say, most outputs of government are not something that the private sector can easily provide. Consequently, valuing these largely nonmarket services is tricky.

Inputs to government services are easier to measure. They might be denominated in headcount, or as in most economic analysis, costs. Without understanding the connection between inputs and the outputs of government, it is impossible to calculate productivity.

Not hard to evaluate, however, is the size of the federal government in the local economy. As the largest metro area between Seattle and the Twin Cities, Spokane has always been a regional center of federal agencies and activities. In terms of a physical footprint, consider the downtown federal building, the VA medical campus, and, of course, Fairchild Air Force Base.

In 2023, the most recent year with available data, the federal government accounted for about 2% of the county workforce. This places Spokane slightly below the share of federal workforce in the state economy, which was 2.1%. These counts do not include active-duty military.

Yet the federal footprint here has been shrinking, on a relative basis, long before the current administration started its mass firings. To be sure, the estimated numbers of federal workers here have climbed a bit: from 4,470 in 2014 to 4,950 in 2023. That represents an approximate 11% cumulative increase over the decade.

But the overall county economy, net of these workers, grew much faster. Sans the federal component, the cumulative growth rate of the local workforce from 2014 to 2023 was approximately 18%. Those differential growth rates translate into a federal headcount share of 2% today, versus 2.2% a decade ago.

This result holds, by the way, for the state of Washington as well. The share of federal workers in 2014 was 2.3%; today, as noted above, it is about 2.1%.

For a variety of reasons, federal jobs here pay well, considerably above the overall county average. The total federal payroll, or “wage bill,” amounted to about $436 million in 2023. This represented a 51% increase over the prior decade, an approximate gain of 5% per year.

Yet the overall wage bill of the Spokane County economy, net of the direct federal footprint, climbed considerably faster. In 2023, it stood at nearly $14.3 billion. This represents a 73% cumulative increase from 2014. As a result, the share of the federal government in the overall county wage bill declined from 3.3% to 2.9%.

The shrinking federal footprint here, whether measured by relative headcount or relative payroll, counters the narrative of the federal government expanding without limits. It is easily imaginable that the federal footprint would continue to shrink in the absence of DOGE.

Whether the firings are justified from the perspective of our country’s ability to afford federal government services isn’t part of this column. That discussion should address both costs and revenues. In any debate over the size of government, it is my hope that a robust discussion of governmental “outputs” is high on the agenda.

In closing, it is worth noting that federal transfer payments to the county are approximately $7.4 billion, or about 17 times as large as the federal wage bill. Here and elsewhere, the flow of federal transfer payments is dominated by three programs – Social Security, Medicare and Medicaid – in that order.