District of Columbia
D.C. exhibits host dependency like a tapeworm: 24.6% of jobs are federal, and DOGE's 300,000 workforce cuts drove 112% more unemployment claims than 2024.
Washington D.C. reveals the vulnerability of economies built around a single host. Federal employment comprises 24.6% of the District's workforce—compared to 1.8% nationally—and this concentration created the nation's highest median household income at $90,800. But 2025 exposed the fragility: the Department of Government Efficiency (DOGE) cut approximately 300,000 federal workers nationwide, with D.C. projected to lose 40,000 positions—a 21% reduction in federal employment.
The economic shock propagates through interconnected channels. Initial unemployment claims in D.C. surged 112.2% compared to 2024, far exceeding Maryland's 19.7% and Virginia's 32.7% increases. Revenue forecasts dropped $342 million annually as declining employment reduces income and sales tax receipts. Real GDP growth slowed to 0.9% in FY 2025 against the national rate of 2.4%, with economists projecting a mild recession in FY 2026 with GDP contracting 1.9%.
Yet D.C.'s economy demonstrates hub dynamics that persist regardless of administration. K Street lobbying firms pay senior lobbyists $150,000-$350,000 and top partners $500,000-$2 million because proximity to power retains value even as federal employment shrinks. The question facing D.C. is whether it can diversify beyond federal dependency—a goal explicitly identified by city planners—or whether its geographic purpose as the national capital will forever tether its economy to decisions made by whoever occupies the offices around the National Mall.