Washington D.C. is facing its highest unemployment rate since 2015, excluding the pandemic, due to massive federal job cuts initiated by the Trump administration. Highly qualified professionals, including former USAID staff and those with advanced degrees, are struggling to find work, facing 'overqualification' rejections, and often forced to take significant salary cuts or leave the city. The crisis has severely impacted the local economy, with job postings down 30% from pre-Covid levels and numerous businesses, especially in the service sector, closing down.
Alicia Contreras was in Tunisia, working as the deputy country representative for Libya for USAID, when she received the news: she was fired. The Trump administration had ceased the cooperation agency’s operations and terminated most overseas staff. What she didn’t expect back then was that after a double major, an MBA and 17 years of experience as a public servant, she wouldn’t be able to find a job back at home. Contreras moved back to the Washington DC area last September and immediately started her job search. She looked for positions in both the public and private sectors, in-person, hybrid and remote. She focused her search mostly on the US capital city and its two nearby states, Maryland and Virginia, because of her family commitments: she has two children, ages three and six. Six months later, none of her close to 100 applications have been successful. “The job market is pretty bad here. I got a request to do like an AI video interview, but other than that, most of it has been rejections,” she said. “I feel like it’s saturated.” Hers is not an isolated case. Washington DC’s unemployment rate is now the highest since August 2015, excluding the pandemic, according to the most recent data. More than 300,000 jobs have been cut from the federal government, the region’s largest employer, since 2024. The cuts came after Donald Trump led a purge of federal employees, a move he said was meant to “eliminate waste” and a task he assigned to Elon Musk and his “department of government efficiency” (Doge). By January, federal public employment had fallen to its lowest level in at least a decade, affecting many other businesses and sectors. As a result, DC now has the highest unemployment rate in the country (6.7%), followed by California (5.5%). And the experts don’t believe the situation will improve in the short term. According to data from Indeed, the job listings website, job openings reflect this situation. “If you look at our most recent data, DC job postings are 30% below where they were pre-Covid, and that is the softest among all states in the US,” said Laura Ullrich, Indeed’s director of economic research. “And it’s broad-based, especially if you compare it to some other states. In South Carolina, for example, we’re 28% above pre-Covid. There are still some sectors that are below pre-pandemic levels, but not many of them. In DC, there’s a pretty broad group of sectors.” The federal government reduced funding for grants, generating a big fall in jobs in scientific areas and other sectors. Also, the administration’s efforts to shrink the federal government led to widespread termination of federal contractors. As a result, an employee of a consulting firm, who requested his name not be used, was fired in January last year, along with another 75 colleagues, representing 85% of the total workforce. “At the beginning, I got zero, nothing, not even a bite, not even a phone call. I was like: ‘What the hell is happening?’ But I was talking to a lot of people and a lot of friends, and they were all the same,” he said. A year and two months later, he’s had about 15 interviews, but nothing has landed. “It’s been a very, very difficult process … especially with all of that education and training now being in this position”. He went to Bates College, a top-tier, small liberal arts college in Maine, and to the also top-tier private Georgetown University in DC, where he obtained a master’s in science and international development. Something interviewees for this article mentioned is that many of their former colleagues or friends are having a hard time not only finding a new position, but finding something that offers equivalent pay to what they had before. Consequently, many are taking salary cuts, or are going from high-level senior positions to junior or mid-level positions. “I’ve been told ‘you’re overqualified’ many times,” said Felipe Mendy, an Argentinian veterinarian and first-time father of a three-month-old who’s been unemployed for two years. “Firstly, I thought it was a matter of language or culture. I thought that maybe I needed a US degree … but then I started meeting many who went to very prestigious universities and also couldn’t find a job. Many highly qualified people with experience at organizations such as the Organization of American States or the World Bank are working at coffee shops.” He experienced that himself. Mendy lived in Washington for the past six years, where he and his wife moved because of her job as an economist. After he lost his job in a US company specializing in animal nutrition, he helped coach a rugby team and walked neighbours’ dogs while applying for jobs that matched his qualifications, which include an MBA. He did some consulting for a small recruitment firm too, where he clearly saw what was happening in the job market: he would publish a job position, and hundreds of people applied, something the firm had never seen, and which affected its business. “Many had nothing to do with the job, but applied.” At a certain point, many of their clients decided that they didn’t need help recruiting and the firm had to let him go. A month ago, the couple decided to stop his job search and go back to Argentina, where he quickly found a position at a Danish multinational firm. “With just one salary, we couldn’t live in that city, it wasn’t viable. And we downsized, tightened our belts, but at a certain point we thought: ‘For what?’ After my US experience, I’m a lot more valuable back home.” Affordability is a big issue for those searching for a position. DC is one of the most expensive cities in the US, where the average rent for a two-bedroom apartment is $3,100, according to the online rental marketplace Apartments.com. The high cost of living makes staying in the city while unemployed an expensive privilege. “We’ve had to budget a lot. My husband is working three jobs. He has no choice, because he has to make up for my salary, and we have to pay for childcare, our mortgage and food,” said Contreras, who feels lucky that her family is able to get healthcare through her husband’s job so they don’t need to pay for insurance out of pocket. That budgeting and, therefore, spending cuts, also affect the city’s private sector, particularly services used by workers, from cleaners to gyms and restaurants, that hadn’t recovered from the pandemic in part because many people continued to work remotely. José Andrés, a Spanish chef and owner of many local restaurants, wrote in a recent X post that restaurants in DC are closing at a higher rate in 2025 than in 2024. “What we need is stability … Tariffs, tourism, Ice etc are affecting negatively the economy …” he wrote. According to the Washington Post, 123 private companies in the DC area announced job cuts in 2025, affecting more than 13,000 workers, the highest annual total since the pandemic. But besides affordability, overqualification and their futures, many also struggle with the impact of the Trump administration’s decisions and, in particular, the erosion of institutions that have played important roles. For that reason, Contreras has decided to run for the Maryland house of delegates, the state legislature, representing her district. “Most of my life I’ve been a public servant, and I want to continue to serve people and help our communities. That’s why I decided to do it. I want to make sure that I’m not just standing around and watching things fall apart. I need to fight back.”
