The greater Washington, D.C., region has long been a magnet for talent.
Young, ambitious workers flock to the region, drawn by the promise of career-building government work and the bustling private sector that supports it.
But economist and public policy professor Dr. Terry Clower, director of the George Mason University Center for Regional Analysis, has noticed a shift in recent years. Today, the picture is a little less vibrant, he said. Plus, the collision of remote work, housing affordability, artificial intelligence and amped-up political vitriol all factor into a new trend:
“We are not the destination for investment that we used to be, and that’s reflected in job growth and job availability,” he said.
While young workers are still attracted to the area, those in the prime of their careers — typically ages 30-50 — don’t seem to be staying as much as before. According to recent Census Bureau data, Northern Virginia saw a net outflow of 43,000 people from the previous year.
“Anecdotally, most of them are young families,” Clower said.
The labor market also reflects this trend. Northern Virginia boasts around 100,000 open positions and a low regional unemployment rate of 2.3%. But the challenge isn’t the availability of jobs — it’s finding workers to fill them.
“The workers simply aren’t here,” Clower said. “It’s a real challenge. We are not growing as fast as we used to. We are not as competitive as we used to be.”
Federal employment, a long-standing staple of the region’s workforce, has seen stagnant growth. There are currently 373,000 direct federal jobs in the area — a slight dip from the 385,000 positions available at the end of the Great Recession.
Housing Market Trends
The region’s economy is still growing, but slower than the national average, he said. It’s a stark change for an area once known as a hub where young professionals built careers and stayed long term, raising families and taking on leadership roles.
“Government hiring managers have difficulty finding people willing to relocate to Washington, D.C., for a federal wage given the cost of living,” Clower said.
A lack of affordable, family-friendly housing is driving the exodus, Clower said, as current home-building trends don’t meet the needs of many residents. The area mostly builds condos and one- or two-bedroom apartments, but families want larger spaces, creating a housing mismatch that impacts the labor market.
“From a broader public policy perspective, much of the region’s tax base, tax policies and housing policies overall are driven to benefit homeowners, not renters,” he said, adding that this could further discourage younger families from settling down.
Political Polarization and the AI Impact
In addition to a high cost of living, political polarization has affected the federal workforce, he said. Clower said staffers increasingly face the same divisive rhetoric once reserved for politicians.
“They are no longer immune to the extreme rhetoric that we have coming out of differences over political stuff now,” he said. “I can’t help but wonder if that is telling in talent attraction and retention within the federal sector.”
Depending on election outcomes, there is potential for an administration that could favor plans to relocate significant portions of the federal workforce and convert civil service roles to political appointees, potentially disrupting employment across the region, Clower said. If the federal sector eventually dwindled by 100,000 workers, that would mean sweeping change.
Technology is another major factor driving change in the region, Clower said. Advances in AI are reshaping federal and private sector jobs with new automation applications. He believes AI, especially generative AI, is often overhyped, though he acknowledges machine learning can greatly improve efficiency in rule-based tasks. Over time, this tech shift may mean some retirees aren’t replaced, though its full impact is still unclear.
A 21st-century Approach
Clower’s career began back in the 1980s as he completed his undergraduate degree in marine transportation learning how to sail ships. For almost 10 years, he worked in transportation distribution management in the private sector, which led him gradually toward public policy as his responsibilities later included researching where best to place U.S. distribution centers.
With new responsibilities, he returned to school for a master’s in applied economics at the University of North Texas, focusing on economic development. He stayed at UNT for over 20 years, starting as a graduate assistant at the Center for Economic Development and Research and eventually becoming an associate professor and the Center’s director. In 2014, he moved to George Mason University, succeeding noted regional economist Stephen Fuller at the Center for Regional Analysis.
As the future of the region’s economy continues to unfold, Clower’s research and observations underscore a need for adaptability with an eye toward understanding how federal decisions impact the workforce.
With so many pressures, Clower said, the region must adapt to remain competitive and consider a holistic approach that factors in housing, work environments, transportation, social supports and even repurposing vacant buildings left empty by the work-from-home shift.
“We need to reshape our built environment in this region for what needs to be done in the 21st century,” he said.