Feeling the economic shockwaves of government layoffs

Summary

Marketplace Morning Report: Feeling the Economic Shockwaves of Government Layoffs
Release Date: February 28, 2025
Host: Sabri Beneshore

---

Introduction

In this insightful episode of the Marketplace Morning Report, host Sabri Beneshore delves into the ripple effects of recent federal government layoffs, exploring their widespread impact on workers and the broader economy. The episode also examines the rising trend of consumer boycotts aimed at challenging corporate and political power, and the burgeoning investments in quantum computing by tech giants like Amazon, Microsoft, and Google. Through interviews and expert analysis, Sabri provides a comprehensive overview of these critical issues shaping today’s economic landscape.

---

Government Layoffs and Personal Impact

The episode opens with a poignant look at the ongoing layoffs within the U.S. Agency for International Development (USAID). Sabri Beneshore reports from Washington, D.C., where current and former USAID workers are gathering at the headquarters to pack their belongings—a stark symbol of the federal government's workforce reductions.

Patricia Gross: A Personal Story
Marketplace reporter Nancy Marshall Genzer introduces us to Patricia Gross, a 47-year-old independent government contractor based near Tulsa, Oklahoma. Gross has been writing federal grant applications for nonprofits since 2018, primarily securing funds from agencies like USAID and the Agriculture Department. However, as these nonprofits lose contracts, Gross finds herself out of work, leaving her family reliant solely on her husband's income.

Notable Quote:
Patricia Gross shares her concerns: “I think like right now we're okay, but I mean it's concerning. Last year I did really well and we bought a house last summer based on my income, you know, increasing our family income” (01:28).

Gross's side gig, assisting with resume writing, barely cushions the financial blow, earning her only about $1,000 in 2024. The scarcity of available jobs exacerbates the situation, with Gross recounting her recent job search frustrations: “Apologies, the position's been canceled” (02:12).

---

The Power of Consumer Boycotts

Transitioning from individual layoffs to broader economic implications, Sabri explores how the U.S. consumer-driven economy—accounting for nearly 70% of GDP—is influenced by collective consumer actions.

The People's Union USA Initiative
Mitchell Hartman reports on a recent social media initiative by the People's Union USA, an activist group advocating for a complete boycott of consumer spending to protest corporate and political influence. The campaign seeks to harness the historical power of consumer boycotts, reminiscent of those from the 1950s and 60s civil rights movement.

Expert Insights:

• John Schwartz, founder of People's Union USA, discusses the movement’s realistic expectations: “I don't expect most Americans to boycott all retail today” (03:02).
• Andrew McAfee, a management professor at Northwestern's Kellogg School, adds skepticism about the effectiveness: “Lots of consumers will say they're going to boycott. Very few consumers do” (03:09). He argues that even a 5% participation rate might not significantly impact revenues.

However, Sociologist David S. Meyer of UC Irvine sees potential beyond immediate economic effects: “A national consumer boycott could still make a difference. It gives people something to do, like get involved” (03:17). Meyer emphasizes that boycotts can drive political engagement and highlight various societal grievances.

---

Investments in Quantum Computing

Shifting gears, the report addresses the surge in private sector investments in quantum computing, highlighting Amazon’s recent unveiling of its first quantum computing chip—a trend mirrored by Microsoft and Google.

Daniel Ackerman’s Investigation
Daniel Ackerman explores why major tech firms are pouring resources into quantum computing despite its current lack of commercial viability. Quantum computing promises unparalleled computational power by utilizing qubits, which can exist in multiple states simultaneously, unlike traditional binary bits.

Technical Challenges and Potential:

• Andrew McAfee of MIT illuminates the complexities: “A quantum computer runs on quantum bits, or qubits, and these qubits harness the behavior of subatomic particles, which... can make them a pain to work with” (06:21).
• Heather West, a research manager at IDC, explains the extreme conditions required: “You have to kind of coax them into being, and you've got to wrangle them in these very weird conditions” (06:36).

Despite these challenges, the potential applications of quantum computing are vast, including advancements in drug discovery, material science, and risk pricing in the insurance industry. However, Amy Webb, CEO of Future Today Institute, cautions that “it could take years to get there” (07:34). The long development horizon necessitates sustained investment, which may strain companies seeking quicker returns.

Long-Term Viability:
Andrew McAfee remains optimistic, asserting that quantum computing will ultimately become invaluable: “Quantum computing is likely to become so valuable... it makes sense for tech firms to spend on it now” (08:05). He highlights that firms with substantial resources can afford to invest in this transformative technology, anticipating substantial future rewards.

---

Conclusion

Sabri Beneshore wraps up the Marketplace Morning Report by weaving together the threads of government layoffs, consumer activism, and technological innovation. The episode underscores the interconnectedness of individual economic struggles, collective consumer actions, and strategic investments in cutting-edge technology. As the U.S. navigates these complex dynamics, the insights shared by Marketplace’s reporters and experts offer a nuanced understanding of the forces shaping the economy.

---

For more in-depth analysis and updates, subscribe to the Marketplace newsletter at Marketplace.org.

---

Timestamps:

• 01:03 - Sabri Beneshore introduces the topic of government layoffs.
• 01:28 - Patricia Gross discusses her financial situation.
• 02:12 - Gross talks about her job search challenges.
• 03:02 - John Schwartz on the boycott movement.
• 03:09 - Andrew McAfee on the effectiveness of boycotts.
• 03:17 - David S. Meyer on the broader impact of boycotts.
• 06:21 - Andrew McAfee explains qubits.
• 06:36 - Heather West on the conditions needed for qubits.
• 07:34 - Amy Webb on the timeline for quantum computing.
• 08:05 - Andrew McAfee on the value of investing in quantum computing.

---

Produced by Marketplace
Host: Sabri Beneshore
Reporting by Nancy Marshall Genzer, Mitchell Hartman, and Daniel Ackerman

Transcript

[Advertiser Voice]

This is a message from sponsor Intuit. TurboTax Taxes was getting frustrated by your forms. Now Taxes is uploading your forms with a Snap and a TurboTax expert will do your taxes for you. One who's backed by the latest tech, which cross checks millions of data points for absolute accuracy. All of which makes it easy for you to get the most money back, guaranteed. Get an Expert now on TurboTax.com, only available with TurboTax Live full service. See guarantee [e-mail] guarantees.

[Sabri Beneshore]

The slow economic shockwaves of government layoffs From Marketplace, I'm Sabri Benishore in for David Brancaccio. Current and former workers at the U.S. agency for International Development are being allowed into USAID headquarters in Washington, D.C. today for a second day for 15 minutes to pack up their belongings. But the federal government's layoffs are being felt across the country, not just in D.C. marketplace's Nancy Marshall Genzer talked to a USAID contractor in Oklahoma about what's happening there.

[Nancy Marshall Genzer]

47 year old Patricia Gross has worked as an independent government contractor, a gig worker, since 2018. She, her husband and three young sons live just outside of Tulsa, Oklahoma. Nonprofits hired her to write applications for federal grants, mostly from USAID and the Agriculture Department. Now the nonprofits are out of work and so is Gross. So the family is dependent on her husband's salary.

[Advertiser Voice]

I think like right now we're okay, but I mean it's concerning. Last year I did really well and we bought a house last summer based on my income, you know, increasing our family income.

[Nancy Marshall Genzer]

Gross says she made about $75,000 last year. She has a side gig helping people write their resumes. She only made about $1,000 doing that in 2024. Now former resume clients are back. They're federal workers or contractors who are also Gross says her heart breaks for them, but there's no time to waste.

[Advertiser Voice]

The advice I've been giving my clients is that people are mourning now and if you wait a month, everybody is going to start really looking for a job. And there's not that many jobs out there.

[Nancy Marshall Genzer]

Gross herself applied for a few jobs last weekend on LinkedIn, but she got messages back telling her, sorry, the position's been canceled. I'm Nancy Marshall Genzer for Marketplace.

[Sabri Beneshore]

The US is a consumer driven economy. Consumers account for almost 70% of US GDP. And when enough consumers agree on something, they have been able to turn that economic power into social or political power, most famously with boycotts. Boycotts gained fame in the US in the 50s and 60s as part of the civil rights movement. One campaign that's gained some traction on social media recently calls for an economic blackout today a total boycott of all consumer spending by Americans to protest the influence of billionaires, corpor and political parties. The idea originated with a little known activist group called the People's Union usa. Marketplace's Mitchell Hartman has more.

[John Schwartz]

People's Union founder John Schwartz posted on Instagram that he doesn't expect most Americans to boycott all retail today.

[Andrew McAfee]

The majority of them are still going to shop on this Friday. That's not the point. The point is that those who don't.

[John Schwartz]

Are choosing to stand together and build momentum against big corporations and the politicians who support them. But, says management professor Braden King at Northwestern's Kellogg School, lots of consumers will say they're going to boycott. Very few consumers do. King says boycotts rarely have a lasting economic impact. Even if, let's say, 5% of consumers are going to boycott, that would be a huge number. They'll probably, you know, if they need to buy something, just go and do it the following day and so it wouldn't really show up the revenue numbers. A national consumer boycott could still make a difference, says sociologist David S. Meyer at UC Irvine. It's an opportunity to talk about a whole variety of grievances and it gives people something to do, like get involved. People who decide to boycott are more likely to call their congressional representative, go out to a demonstration, and vote against politicians who back social and economic policies they don't like. I'm Mitchell Hartman for Market.

[Sabri Beneshore]

If you want to be savvy about the economy, the Marketplace newsletter is just what you need. Every Friday you'll get explainers and analysis that makes sense of everything from the moving markets to grocery prices. No jargon, no hype, just smart takes delivered to your inbox. Sign up [e-mail] subscribe.

[Netspy Voice]

Trust is earned and drops, but lost in buckets Are you confident that your business is truly secure from cyber risks? With all your most important assets online, netspy is your company's ally in the battle for trust. With the full force of the netspy team in your corner, you can navigate rapid innovation with confidence. Whether it's pen testing as a service, external attack surface management breach and attack simulation, or cyber asset attack surface management, netspy helps you prioritize the risks that matter most to your business. And you won't find another team like the Net Netspy agents. These experts are as sharp as they come, ensuring you work with the A team every time. Netspy is trusted by nine of the top ten US banks, four of the top five cloud providers, four of the five largest healthcare companies, three FAANG companies, seven of the top ten US e commerce companies, and many Fortune 500. Ready to experience the Netspy advantage for yourself? Schedule a [e-mail] to see the security solution in action.

[Sabri Beneshore]

That's netspi.com Amazon yesterday unveiled its first ever quantum computing chip. This follows similar announcements from Microsoft and Google. Research into quantum computing used to happen mostly at academic labs, but private sector investment in quantum computing has grown tenfold in the past decade. Marketplaces Daniel Ackerman looked into why tech firms are spending so much on a technology that hasn't yet actually proven its commercial viability.

[Andrew McAfee]

Your everyday computer runs on bits. A quantum computer runs on quantum bits, or qubits, and these qubits harness the behavior of subatomic particles, which, says MIT research scientist Andrew McAfee, can make them a pain to work with.

[Heather West]

You have to kind of coax them into being, and you've got to wrangle them in these very weird conditions.

[Andrew McAfee]

For instance, he says, MIT has a quantum computing lab on campus that is the coldest place, period.

[Heather West]

In other words, down closer to absolute zero than any other place in the universe we know about. And the reason is to kind of convince qubits to hang around a little bit longer and come together in ways that that we can harness.

[Andrew McAfee]

On the most basic level, an ordinary computer bit is like an on, off switch. It either represents 1 or 0. Qubits work differently, says Heather West, a research manager at idc.

[John Schwartz]

Qubits rely on quantum properties that allow.

[Advertiser Voice]

Them to hold the values of 0, 1, or any value in between, she says.

[Andrew McAfee]

Quantum processors could do calculations that are functionally impossible with today's computers.

[Advertiser Voice]

That will allow for scientists and engineers in the long run to be able to solve complex problems that have eluded them.

[Andrew McAfee]

Quantum computers could speed up things like drug discovery, material science, or the pricing of risk in the insurance industry. But Amy Webb, CEO of Future Today Institute, says it could take years to get there.

[Nancy Marshall Genzer]

This is a field that really has a very long horizon ahead of it in terms of research and development, scaling.

[John Schwartz]

And getting these concepts into market.

[Andrew McAfee]

And that can be tricky for companies seeking investor dollars because investors have ever.

[Advertiser Voice]

Shortening expectations for when they're going to see a return.

[Andrew McAfee]

But quantum computing is likely to become so valuable, says Andrew McAfee of MIT. It makes sense for tech firms to spend on it now, at least the firms with deep enough pockets that allows.

[Heather West]

Them to extend their timeline beyond you know, next quarter or what? We're going to put in the annual.

[Andrew McAfee]

Report next year because McAfee says for whoever manages to scale quantum computing, the returns will be there eventually. I'm Daniel Ackerman for Marketplace.

[Sabri Beneshore]

And in New York, I'm Sabri Ben, ashore with the Marketplace morning report.

[Andrew McAfee]

From.

[Sabri Beneshore]

8Pm American Public Media.