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Cutting the Debt – and Federal Jobs – as Unemployment Rises

A look inside the Denver International Airport control center; photo by John Moore/Getty Images

After months of squabbling and coming to the brink of national default, Democrats and Republicans finally came together in the end to produce a debt-ceiling agreement that at its heart simply says “more to come.”

That’s the big political reality of 2011: Everyone wants to cut Washington spending. The fight is over how much. But as unemployment lingers as a major problem, as we reported last week, there is a huge economic reality to consider as well: those cuts will ultimately hit at the nation’s largest employer, the federal government.

There are about 2 million federal employees and 85 percent of them work outside the Washington, D.C., metro area. And as Patchwork Nation looks at the scatter of employees across the national map, it sees some serious issues, particularly in small-town rural America.

In short, when federal job cuts eventually come, they will likely fall all over. When you look at federal jobs per capita, they are spread all around Patchwork Nation’s 12 county types. (The below map comes from data obtained through the Freedom of Information Act by Eye on Washington, a Washington lobbying firm in DC.)

But, as we have noted in more in-depth reporting, some of those places, like the small town Service Worker Centers, as well as many of the Minority Central and Emptying Nest counties, lack the educated and skilled population to bring in new private-sector employers to pick up the slack. They are also often located in more remote areas.

In other words, if those federal jobs leave town there may be some big holes to fill in those local economies.

What Cuts?

Of course, even talking about government cuts is a guessing game at this point. Most of the agreed-upon $2 trillion in reductions is going to come from recommendations from a select congressional committee that has yet to even be formed.

But if Washington is serious about cutting money at some point it will have to talk about cutting jobs or even agencies, and looking at where the federal jobs are located offers some insights.

Community Type Total Federal Jobs Total Labor Force Federal Jobs %
Monied ‘Burbs 458,112 36.9 million 1.24
Minority Central 76,955 5.8 million 1.33
Evangelical Epicenters 39,546 6.7 million 0.59
Tractor Country 17,464 1.2 million 1.46
Campus and Careers 54,665 7.1 million 0.77
Immigration Nation 122,931 1 million 1.2
Industrial Metropolis 486,378 26.7 million 1.82
Boom Towns 414,412 31.7 million 1.31
Service Center 143,853 15 million 0.96
Empty Nests 32,952 6.2 million 0.53
Military Bastions 188,637 4.2 million 4.51
Mormon Outposts 24,887 875,968 2.84
Nationwide 2.1 million 125.7 million 1.35

Source: U.S. Office of Personnel Management via Eye on Washington LLC with Patchwork Nation analysis

As one might expect the largest number of civilian federal jobs are in the nation’s most densely populated counties, the big city Industrial Metropolis. But breaking down the percentage of jobs based in the federal government changes the picture a lot.

The Military Bastions, places in and around military installations, have large numbers of civilian federal employees who handle the non-soldiering jobs around those places. Those jobs would be on the table in this round of cuts and there are a lot of them – more than 4 percent of the jobs in those counties come from the federal government.

Look at Christian County, Ky., on the map, a Military Bastion that includes Fort Campbell. It holds more than 1,900 federal jobs, but the unemployment rate there is already over 11 percent.

But the fact is the federal government is an important player in most of our 12 county types. In nine of them, about 1 percent or more of the jobs are from the federal government. In specific counties that number is much higher.

In some of those places, like the big city Industrial Metros and Monied Burbs, losing those jobs would hurt, but the relatively high education and skill levels in those places might help them offset the government losses eventually – though there would be hardship in the short term.

An even bigger concern, however, are those sparsely populated, less-connected counties.

Rebuilding From Scratch

As Patchwork Nation heard last week in Lincoln County, a Service Worker Center on the Oregon coast, when jobs leave those places it’s hard to get them back. “It’s tough in rural America,” said Mayor Dick Anderson. “There aren’t a lot of choices when an industry goes bad.” And in many of these places the federal government is a big “industry.”

Yes, only about 1 percent of jobs in Service Worker Centers come from the federal government, but in some places it is much more. Look at places like Williamson County, Ill., a Service Worker Center with about 1,500 federal jobs largely from a federal prison and a Veterans Administration office. That pattern is repeated in counties like Preston County, W.Va. (555 jobs), Dickinson County, Mich. (658 jobs), or Pittsburg County, Okla. (1,936 jobs).

In those places, it is military, prison or veterans affairs institutions keeping people at work. If you take those jobs away, those counties generally aren’t the kinds places private companies are itching to set up shop. They tend to have lower-than-average median household incomes and education levels and their more remote locations mean longer travel to and from bigger cities.

That’s already the case to some extent. As we have noted often on this blog, those Service Worker Centers and other small-town communities have been hit especially hard in the recession.

And as the new move to government austerity takes hold, that is worth keeping in mind.

Beyond the deficit, the argument for reducing government is fairly straightforward: Taking money out of the government’s hands and putting it in the hands of the private sector is a smart move because the private sector handles money better. Competitive pressures force private companies to be smart and efficient.

That argument, pushed forward by the GOP for the last few decades, will be a big part of the 2012 campaign.

But it appears there is a broader point in the government-cutting game as well. It may be that cutting money form the public sector ultimately means moving money from rural, remote locations to bigger urban areas.

The result? Any austerity plan has the potential to deepen the growing divide between places that are winners (more urban) and losers (generally more rural) in the new economy – something we wrote about this April in The Atlantic. And remember the cutbacks associated with the debt-ceiling deal are reportedly just the beginning — a down-payment on many more cuts to come.

Those cuts and where they fall will be a high-stakes game for many communities. They won’t be easy. And acrimony may just be starting.

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