“Unaccountable bureaucracies,” “waste,” “buildings filled with bloat,” “spending out of control.” With these justifications, Elon Musk’s Department of Government Efficiencies 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.

For sure, 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. We first need to establish government’s “output.”

Several measures come to mind: national protection, air travel safety, flow of goods and people, poverty reduction, limiting deaths from epidemics, new products from agricultural research, knowledge from weather forecasting, flood control, irrigation systems construction and management, monitoring of air and water quality, and many more.

The outcomes we expect from the federal government could run many columns of this size. Suffice to say, most output of government is not something that the private sector could easily provide. Consequently, valuing these largely non-market services is very tricky indeed.

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

Not hard to evaluate, however, is the place of the federal government in the local economy. It has historically been large here, dating back to World War II, when it clearly dominated all activities.

Currently (as of 2023), it accounts for about 9% of the local workforce in the two-county economy. That figure includes an estimate for Pacific Northwest National Laboratory as well as for companies involved in the Hanford cleanup. Compare that to the share of federal workforce in the state economy, at somewhere in the 2.2% to 2.3% range. While not quite the dominant presence of the 1940s, the federal and near-federal workforce is outsized here.

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 number of workers in these categories in the two counties climbed to 12,270 in 2023, up from 11,520 in 2014. That represents a 6.5% cumulative increase over the decade.

But the overall economy, net of these workers, grew much faster. Cumulative growth, sans the federal footprint, of the workforce in the two counties from 2014-23 was about three times as large, at approximately 22%. Those differential growth rates translate into a federal and “near federal” share of 9.1% today versus 10.3% 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%. These calculations do not include the uniformed military.

It is well-known that the federal and near federal jobs here pay well, above the overall average. Consequently, the total “wage bill” of these groups amounted to about $1.6 billion in 2023, and represented a 33% increase over the prior decade. (Roughly a 3.3% gain per year.)

Yet, the overall wage bill of the greater Tri-Cities economy, again net of the direct federal footprint, climbed much faster. In 2023, it stood at nearly $7 billion. This represents a 78% cumulative increase from 2014. As a result, the share of the federal and near federal wage bill slipped from about 24% to 19% over the decade.

What to make of these trends? First, the efforts to diversify the two-county economy are clearly succeeding. The various economic development organizations in the greater Tri-Cities should take a couple of bows for those efforts.

Second, the shrinking federal footprint here, whether measured by relative headcount or relative payroll, counters the narrative of recent federal expansion out of control. Whether the firings are justified from the perspective of our country’s ability to afford federal government services will not be taken in this column. If the community does engage in discussion around the topic, it is my hope that a robust discussion of the governmental “outputs” plays a central role in the dialogue. 

In closing, it is worth noting that federal transfer payments to the greater Tri-Cities are about twice as large as the federal and near 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.

D. Patrick Jones is the executive director for Eastern Washington University’s Institute for Public Policy & Economic Analysis. Benton-Franklin Trends, the institute’s project, uses local, state and federal data to measure the local economic, educational and civic life of Benton and Franklin counties.