The ongoing federal shutdown, now on its 16th day, is creating a looming existential economic crisis for El Paso’s economy. Together with the Trump Administration’s firing of federal workers, the longer the shutdown continues and the more federal workers being fired, the loss of federal income will impact El Paso’s economy significantly.
It is not only the loss of federal paychecks, but the reduction in federal contracts along with the loss of federal paychecks that will significantly impact El Paso’s economy. Trying to understand the amount of impact is difficult because there an accurate count of federal workers in El Paso and how many are being dismissed from their jobs by the Trump Administration is not yet known.
However, in February we analyzed publicly available to data to ascertain what percentage of El Paso’s workforce is comprised of federal employees. Our analysis found that there are an estimated 13,600 federal workers in El Paso. Our analysis found that almost 20% of El Paso’s workforce is tied to government work, including city, county, state and federal workers. This excludes the school districts, which account for another two percent of the city’s workforce.
Much of El Paso’s economy has not shown a significant economic impact because of the shutdown and firing yet because of unemployment benefits. According to a recent notice posted online by the Texas Workforce Commission, federal workers who are on furlough or are essential workers working without pay are considered by the Commission to be “laid off.” This means that El Paso’s federal workers can begin receiving unemployment benefits from the time the federal shutdown began on October 1.
However, once the shutdown ends, any federal retroactive payments received by the worker will require them to repay any benefits they received. The open question is, will backpay be made to the federal employees and how many of El Paso’s federal workforce will still have a job once the shutdown is over? Although it was initially assumed that federal workers would receive their backpay once the federal shutdown is over, a White House reinterpretation of the 2019 law guarantying their back pay has put backpay for furloughed employees in limbo as now the federal government argues that backpay must be “explicitly” added to legislation that ends the shutdown.
To better understand the potential impact the federal shutdown and the firing of federal workers will have in El Paso we looked at the data compiled by the Workforce Solutions Borderplex, a Texas public workforce development board.
There are 28 local workforce development boards in Texas. They are tasked by Texas legislation to create plans for coordinating business and job opportunities in the regions they serve.
The Workforce Solutions Borderplex serves the El Paso, Hudspeth Culberson, Jeff Davis, Presidio and Brewster counties along the U.S.-Mexico border in west Texas.
Our initial analysis found around 13,600 employees working for the federal government. The Borderplex Labor Market reported 13,700 employees for August 2025, down 100 from the previous month, and 300 from August 2024.
Both of our counts were very similar. But to check our accuracy we tested the numbers against two other reports. The U.S. Office of Personnel Management (OMB) is the “chief human resources agency” for the federal government. In 2014 and again in 2017 they published reports showing how many federal workers are deployed across the nation. The 2017 report is the latest one available.
Their employee counts do not include postal workers or military personnel. Postal workers are paid by the postal service, which is an independent self-funded agency. According to the 2014 OMB report there were 9,910 full-time federal workers in El Paso, and nearby federal worksites. The OMB labels them Core Based Statistical Areas. For 2017, the number of federal workers in El Paso was 9,972, according to the OMB.
Based on the three data points, it can be confidently assumed that the number of federal paychecks in El Paso is likely between 13,600 and 13,700. We will use the figure 13,600 for our analysis.
The 13,600 may not seem significant compared to El Paso’s workforce of around 400,751 in August 2025 at first glance, but when the value of federal dollars is factored in, the potential impact of federal changes becomes noticeable.
The Borderplex graph shows El Paso’s GDP by job sector. Although the graph uses GRP, it was likely a typographical error and should have been GDP. Data from the Bureau of Economic Analysis matches the Borderplex’s $10.9 billion for the value of the federal sector.
Looking at the graph, it can readily be observed that the governmental sector in El Paso is a significant component of the city’s economy.
The three other data sets from the Borderplex data that is important to see are the job losses in overall government work, as well as federal, local and state employees. According to the Borderplex, except for job increases of 1% between July and August at the city, the others, federal and local workers, experienced job decreases of 0.7% and 1.6%, respectively. Overall, the government sector has shed 1.1% of its workforce from last year.
These figures are before the government shutdown and the White House layoffs recently announced.
More significant is when one looks at the top 20 employers in El Paso.
Of El Paso’s top 20 employees, only seven – ADP, Alorica, Dish, El Paso Electric, HCA Healthcare, Spectrum and Walmart – are not government-related. It is important to note that the graph includes information from the six Texas counties it covers. However, looking at who the top 20 employers are, it can be surmised that the counts are mostly for El Paso.
Of the 35,922 employees of the top 20 employers, those in the public sector number only 5,591, or 16%.
This shows that any disruption in government work can affect around 84% of El Paso’s workforce working in the top 20 employers.
Even if the shutdown were to end soon, large numbers of federal workers are not fired, and they get backpay, the danger to El Paso does not end there. Additional cuts in federal funding can end local and state contracts that El Paso depends on. Housing, emergency management, and health care costs are some of the benefits that will see more pressure in the coming months. The debate over extending healthcare subsidies that led to the shutdown will significantly increase health insurance costs to El Pasoans, if the Republicans do not agree to extend them. This will add more pressure to the community in healthcare costs.
And none of this includes the draw down of school workers because of diminishing student populations. School jobs are a significant part of El Paso’seconmy.
The loss of federal paychecks and federal contracts negatively impacts local businesses because there is less income available. The loss of wages also impacts the housing market as mortgage and rent payments are missed, while lowering sales taxes and property tax revenues for El Paso, and increasing the demand for social services like food pantries and emergency housing.
Other than to issue a press release about forgoing her paycheck during the shutdown on October 10, El Paso’s congresswoman, Veronica Escobar, has been conspicuously silent saying only that the Republicans are to blame.
Escobar has yet to publicly address how a prolonged government shutdown and the firing of federal workers is an existential threat to El Paso’s economy.