Labor Day is a day to celebrate workers, but high costs coupled with low wages, federal interference, and chronic racial inequities are hurting many District workers. Current and former federal employees are still reeling from massive cuts to the federal workforce and an uncertain job future. For Black workers—who already experience lower median wages and a higher unemployment rate than white workers—the decline in federal jobs cuts off a long-standing pathway to the middle class. At the same time, a surge of heavy-handed federal immigration enforcement has made it difficult for immigrant workers to make a living.
The decline in federal jobs has driven up DC’s unemployment rate, which is the highest in the country at 6 percent for June. Although the rate has declined steadily since January, that’s not necessarily a sign of an improving economy. Instead, a shrinking labor force has been the main driver behind the decreasing unemployment rate, with about 5,300 people leaving DC’s labor force from January to June 2026—whether because of becoming discouraged, moving out of the District, or other reasons.
Decisions that District policymakers made have caused further harm to workers. In 2025, the DC Council rolled back Initiative 82, which was supposed to gradually raise the minimum wage of tipped workers to the full minimum wage—despite DC voters’ overwhelming support for the initiative. In the most recent budget, Councilmembers rolled back provisions of DC’s paid leave program, including decreasing the maximum weekly benefit and the maximum number of weeks of leave for medical and family caregiving, though these reductions were an improvement over Mayor Bowser’s proposed one-year pause in medical and family leave.
While facing a weak job market, DC workers are also getting hit by high costs for necessities like housing, childcare, groceries, and energy, which are some of the highest in the country. This problem is two-sided. Yes, prices are high, but also many residents—especially Black residents—earn too little to afford these costs. A new analysis from DC Fiscal Policy Institute shows that 61 percent of Black DC households don’t earn nearly enough to maintain an adequate standard of living, as measured against the Economic Policy Institute’s Family Budget Calculator.
These current challenges for Black workers come on top of chronic racial disparities. Black DC residents have long had worse outcomes by every employment measure due to systemic racism. Black DC workers are disproportionately clustered in lower wage jobs and consistently have lower median wages than white workers. Employment is more precarious for Black workers, with chronically high unemployment and underemployment rates that persist even during strong economies.
Mayor Bowser has failed to meaningfully reduce these racial disparities. Her 2023 Comeback Plan set a goal of increasing the median household income for Black residents by $25,000 by 2028. However, since then, the mayor has been quiet about this goal and has not publicly announced a plan to reach it. Meanwhile, the median income for Black DC households has not significantly budged in the initial three-year period of this goal.
At the same time, federal interference is making it even harder for the District to enact policies that support workers. Last fall, the Council passed temporary legislation to decouple some of DC’s tax code provisions from recent federal changes and use the additional revenue to enact a new DC Child Tax Credit (CTC) and expanded Earned Income Tax Credit (EITC). But Congress tried to overturn that legislation, leaving DC lawmakers reluctant to permanently decouple at the same scale and resulting in no funds to implement the CTC and expanded EITC. And recently, a House committee advanced legislation that would require Congressional approval for any DC tax increases.
It’s clear that DC workers, especially Black residents and those with low incomes, are hurting. So, what needs to happen for these workers to have more to celebrate on future Labor Days? First, DC policymakers should create and expand policies that boost workers’ incomes and increase career opportunities, such as creating a youth jobs guarantee. Second, they should take steps to ensure workers can afford to live in DC by increasing investments in deeply affordable housing and increasing childcare affordability. Policymakers should also mitigate the harm from federal cuts to food assistance and Medicaid, which help residents navigate tough times.
To achieve these goals, DC policymakers need to create a more equitable tax system that will produce adequate revenue to meet the needs of workers and other residents. They can start by passing the Wealth Proceeds Tax. Finally, the District needs autonomy, and ultimately statehood, to be able to pass legislation without federal interference. That’s why we recently launched Together for DC, a campaign led by DC residents that is mobilizing Americans across the country to join the call for DC autonomy and statehood. Together, we can fight for a DC that celebrates workers not just on Labor Day, but every day, through policies and practices that truly value their contributions.
