The Rise and Fall of Washington D.C. as a Company Town
In 2008, during the Great Recession, I witnessed firsthand the devastating impact of layoffs across America while reporting on Barack Obama’s presidential campaign. Cities like Kokomo, Indiana, and Lorain, Ohio, were hit hard by factory closures, leaving them reeling. Yet, as I returned to my home in Alexandria, Virginia, I noticed a stark contrast. The Washington, D.C., metro area, with its high concentration of government jobs, seemed insulated from the economic pain gripping the rest of the country. In fact, the region prospered as federal stimulus dollars flowed in, benefiting Beltway contractors and maintaining the area’s economic stability.
By 2009, my growing family and I moved to a larger home in Northern Virginia, where housing prices continued to rise even as they plummeted elsewhere. This prosperity came at a time when other parts of the country were suffering deeply. It wasn’t until years later, with the relentless cuts imposed by Elon Musk’s Department of Government Efficiency (DOGE), that the tables turned. Washington, D.C., and its surrounding areas are now facing significant layoffs, with unemployment claims skyrocketing and predictions of up to 40,000 job losses in the District over the next few years. This represents a 21% reduction in the city’s workforce, which could cost the city more than $1 billion in revenue.
The Fallout Spreads Beyond the Beltway
The economic fallout from these cuts is far-reaching, affecting not just Washington, D.C., but also Maryland and Virginia—the DMV region—where nearly 10% of jobs are tied to the federal government. The ripple effects extend to contractors, consultants, and other industries that rely on federal spending. The signs of distress are evident. Highly educated professionals are flooding LinkedIn with résumés, young people are desperate to find others to take over their apartment leases, and families are quietly leaving the city. Even the physical landscape is changing, with government buildings once bustling with activity now standing vacant or underused.
The Trump administration has added fuel to the fire by labeling many federal properties, including those housing major departments like Justice, Labor, and Health and Human Services, as “non-core” assets slated for sale or repurposing. This raises the specter of iconic federal buildings standing empty, a haunting echo of the abandoned factories in postindustrial cities across America. The question arises: Could Washington, D.C., a city long shielded by its status as the government’s company town, suffer a fate similar to Detroit or other struggling American cities?
A Tale of Two Americas: Prosperity and Resentment
The economic divides that have long defined America are starkly evident in the contrasting fates of Washington, D.C., and other regions. While the capital prospered during the Great Recession, cities like Middletown, Ohio, grappled with the opioid epidemic and economic decline. By 2012, seven of the 10 wealthiest counties in the U.S. were in the Washington metro area, with high-net-worth households increasing by 30% since 2008. Meanwhile, communities in the Midwest and elsewhere were struggling to recover. This disparity has bred resentment, particularly among those who feel the federal government has prioritized its own interests over the needs of the rest of the country.
This resentment has only intensified in recent years. Federal workers were slow to return to the office after the pandemic, a trend that has contributed to the desolation of downtown Washington and fueled perceptions of a disconnected and privileged bureaucracy. Irony abounds as the Trump administration’s return-to-office order has brought some life back to the city’s streets, even as the region faces an existential economic threat.
The Winners and Losers of Washington’s Economic Shift
While the cuts from the Department of Government Efficiency have sent shockwaves through the region, not everyone in Washington, D.C., is feeling the pain equally. The city’s true economic elite—lobbyists, consultants, and defense contractors—continue to thrive. These industries are well-insulated from the cuts, with lobbyists even seeing increased demand as other sectors seek to influence policy decisions. The region’s soulless highways remain lined with consulting firms and national security contractors, symbols of the enduring power of the Beltway’s influence industry.
The real targets of these cuts are the more modest workers who form the backbone of the federal workforce: career civil servants, security guards, office cleaners, and administrative staff. These individuals, many of whom could have earned higher salaries in the private sector, are now scrambling to find new jobs or considering leaving the region altogether. The cuts also disproportionately affect the region’s Black residents, who have long relied on federal employment as a path to the middle class. This is a story of inequality, where the most vulnerable workers are bearing the brunt of the economic upheaval.
A Glimpse into the Past: Pittsfield, Mass., and the Lessons of Company Towns
As I watch Washington, D.C.’s struggles unfold, I am reminded of my hometown, Pittsfield, Massachusetts, another company town that once thrived under the leadership of General Electric (GE). At its peak, GE employed over 13,000 people in a county of just 130,000, sustaining a vibrant, prosperous community. By the late 1980s, however, GE began scaling back its operations under CEO Jack Welch, leaving Pittsfield on a downward spiral. Today, the city’s population has fallen by a quarter since 1970, and only a fraction of the once-thriving GE workforce remains.
While Washington, D.C., is unlikely to suffer such a dramatic decline—its economy is far more diversified than Pittsfield’s ever was—the parallels are striking. When a regions’ largest employer falters, the effects are wrenching, leaving behind empty storefronts, lost opportunities, and shattered dreams. The experience of Pittsfield and other company towns serves as a cautionary tale, reminding us of the fragility of economies built around a single industry—or, in Washington’s case, a single employer.
The Bigger Picture: Why America Should Care
The struggles of Washington, D.C., may seem distant to the rest of the country, but they offer a critical lesson about the risks of over-reliance on a single employer or industry. The city’s story is part of a broader narrative about economic inequality, resilience, and the consequences of policy decisions. As the federal government continues to wield its budget-cutting scythe, it is not just individual workers or neighborhoods that suffer—it is the very fabric of a community that is at risk.
It is easy to dismiss Washington, D.C., as a place of privilege and power, but the pain being felt by its residents is real and deserving of empathy. The story of the nation’s capital in this moment is a microcosm of America’s larger economic challenges: the decline of stable, middle-class jobs; the increasing concentration of wealth; and the fragility of communities built on a single industry. As Washington absorbs its blows, it is a reminder that, for all its unique status as the seat of federal power, it is still a city of people, families, and neighborhoods—just like any other.
