The single largest industry sector in the Washington, D.C. metropolitan area is not the federal government. That distinction belongs to professional, scientific, and technical services, as Richard Florida writes in The Atlantic Cities. But the federal government still explains a huge portion of the economic activity in the greater D.C. area — and a huge number of jobs beyond its baseline public-sector employment, including a large portion of jobs in professional services.Indeed, the impact of the federal government on Washington, D.C. goes well beyond even the multiplier-effect jobs that ripple through the metro.
Florida asked EMSI to analyze the D.C. economy to estimate the portion of all jobs that could be explained by the federal government. Besides the three federal government sectors — civilian jobs, the U.S. Postal Service, and the military — we included jobs in the industries that supply the federal government, i.e., jobs in the federal government’s supply chain, both direct and indirect jobs. We also included the local resident-serving economy; these are jobs induced by the spending of income earned in government and its supply-chain industries.
It’s not hard to find further impacts, though. Washington is known for the private-sector lobbyists, trade associations, government policy experts, and others who have located in D.C. to be close to the elected officials and regulatory agencies of the federal government. We might call these “proximity jobs,” highlighting their location near the federal government. We get a rough approximation of their numbers by tallying “export employment” in sectors that likely fall into this category using EMSI’s input-output model. Export jobs are those that are funded by money that comes from outside the regional economy. Some examples of proximity industries include:
Offices of lawyers
Professional organizations and business associations (separate industries that employ lobbyists)
Labor unions and other similar labor organizations
Public relation agencies
Administrative management and general management consulting services
And for all the usual reasons, we also included jobs in the supply chain of the proximity industries, and jobs in the local resident-serving economy, i.e., the jobs induced by the spending of income earned in the proximity industries.
The sum of the federal government jobs, the proximity jobs, and the associated multiplier-effect jobs might be properly viewed as jobs in the federal government cluster. The table below shows the breakdown: 52% of all jobs in D.C., more than 1.7 million, can be explained by the federal government.
2013 JobsDirect JobsIndirect JobsInduced JobsTotal Fed Govt. Cluster JobsFederal Government467,266136,56647,295537,5231,188,650Export Jobs in Proximity Sectors238,20181,67922,661209,662552,203Total1,740,853Total Washington, D.C. Metro Employment (Including Self-Employed)3,325,150Share of Total with Proximity Sectors and Their Multiplier Jobs52%Source: EMSI 2013.4 Class of Worker and Input-Output Model (2012)
We might note that the above numbers exclude several items that might be just as easily included. A small business owner travels to Washington with his or her attorney to meet with a local regulatory agency. The money spent on lodging, food, transportation and the like is a result of the federal government, and might be included. The same holds true for a research team presenting a grant application, or the attendees of a political rally. And, for that matter, tourism in general, which in the case of D.C. is mainly aimed at federal government attractions, monuments, museums, Congress, and the White House itself. The jobs generated by serving the total of this activity would be much harder to estimate, but would still be arguably part of the impact of government.
And as large as the government’s share is, we’re confident the federal government would account for a greater portion of total employment if we included only the District in our analysis, instead of the metro area (which includes Arlington County, Va., the city of Alexandria, Va., as well as other counties in Virginia, Maryland, and West Virginia).
Still, the Washington, D.C. metro is clearly driven by the government, just as Seattle is driven by its tech and aerospace clusters and Houston is driven by oil and gas industries (our recent industry driver map outlines these and other drivers for the 100 largest metros). And to the extent that D.C. has the thriving knowledge-based economy that Florida emphasizes, the government is the clear driver of that, too. For evidence of that, check out the final table in his piece, or the chart below: Most of the most-concentrated occupations in the D.C. metro (measured by location quotient) can be tied back to the government in one way or the other.
The greater D.C. area has 24.6 times the national share of political scientists and 12.6 times the share of economists. If these workers aren’t directly in the government sector, they’re likely in one of the many other industries located in Washington based on their proximity to the federal government.
The result of all of this economic activity is the nation’s largest, and in many ways only, true federal government cluster.
Data shown in this post comes from Analyst, EMSI’s web-based labor market data and analysis tool. Contact Josh Wright (email@example.com) for more. Follow Wright on Twitter (@ByJoshWright) and EMSI (@DesktopEcon).