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Federal Hiring Boom Would Benefit Washington Region

By V. Dion Haynes
Washington Post Staff Writer
Tuesday, September 8, 2009

If projections bear out that the federal government will hire up to 120,000 people for jobs in the region over the next few years, the Washington area economy could be on its way to a rebound faster than most of the nation.

Such a hiring boom would have widespread benefits, economists who study the region's employment and housing patterns said. It could reduce the region's unemployment rate, now at 6.2 percent, if jobless people here are hired, and it could revive stagnant home sales if people outside the area are hired. Moreover, as agencies expand to accommodate more workers, they could opt to lease space, boosting the moribund commercial office market.

Partnership for Public Service, a nonprofit that helps find candidates for federal jobs, released a report last week that listed projected hires for hundreds of agencies between now and 2012. In total, the government is expected to hire 600,000 people, including 19,071 nurses at the Department of Veterans Affairs, 9,800 Border Patrol agents, 3,774 criminal investigators for the Labor Department, 6,282 contract representatives at the Treasury Department, and 3,500 claims assistants and examiners at the Social Security Administration.

The report, called "Where the Jobs Are," focuses on 273,000 "critical needs" positions that are necessary for the operation of the agencies -- 45,000 of which would be located in the Washington area. Federal spending represents 33 percent of the region's economy, and a surge in hiring "is important for the economic foundation of this area," said Max Stier, president and chief executive of the partnership.

The hiring is intended to replace retiring employees and fill positions created as agencies expand to oversee new initiatives, such as economic stimulus programs.

Even before the report was published, some experts were projecting that employment in the region would pick up next year, with net job losses becoming net job gains.

By the end of the year, the area is expected to experience a net loss of 21,000 jobs, said John McClain, senior fellow at the Center for Regional Analysis at George Mason University. But in the next few years, McClain added, the region is expected to see net gains in jobs: 23,900 in 2010; 34,900 in 2011; 42,000 in 2012; 47,600 in 2013; and 53,300 in 2014.

"We will recover somewhat in 2010," McClain said, adding that his forecast does not take into account the dramatic hiring projected by the report. "In 2012 and '13, we're back to our long-term average growth."

"Our metropolitan economy will be first for having positive job growth. We will recover before the rest of the country," he said, adding that he thinks the federal government will hire less than 120,000 because it doesn't have the infrastructure for such mass hiring.

To what extent the hiring boom benefits the region depends on whether a substantial proportion of new jobs would be created and whether many of them would be filled by jobless people in the region, scenarios that would reduce the unemployment rate. Officials at some of the agencies said they are recruiting in the region and around the world. But even an influx of hires relocating here could help by spurring demand for houses and apartments.

Officials at the U.S. Agency for International Development said they plan to hire 1,690 people over the next few years, 550 of whom would work at the Washington headquarters. Most of the overseas and local positions are new, officials said, as the agency is doubling its foreign service staff who work on construction and diplomacy in developing countries.

In addition to the civil service staff in Washington, "one-third of our foreign service workforce is stationed in Washington at any given time" for three years, said Ron Daniels, special projects officer for the agency. Many, he said, would be in the rental market "in short-term or long-term leases."

The Nuclear Regulatory Commission plans to fill more than 459 positions, largely to replace workers expected to retire in the next few years, said Miriam Cohen, deputy director of the agency's human resources department. The bulk of the hires, she said, would be made for jobs at the agency's headquarters in Rockville and a satellite office in Bethesda.

"We need engineers who would be involved in the construction of new reactors," Cohen said.

Analysts said they expect the new jobs to drive demand for housing in the region, accelerating recovery of the market. July housing sales in the region were up 12.6 percent from the same month in 2008, according to the Center for Regional Analysis, and inventory shrank to 6.2 months in July from 11.5 months in January.

"The job growth in D.C. will bring new people into the labor force and drive demand for apartments and houses," said Frank Nothaft, chief economist at Freddie Mac. "That will have a ripple effect in [boosting interest in new houses] and creating construction jobs."

Gregory H. Leisch, chief executive of Delta Associates, a real estate and economic research firm in Alexandria, said several agencies, including the Justice and Treasury departments, have recently signed leases in the commercial office market to accommodate growth. He said he expects that trend to accelerate with the federal hiring, which could reduce the 47 million square feet of vacant space in the region.

The hiring "will translate into 2 to 3 million square feet of office absorption" by the federal government, he said.

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