Reflecting on Workforce Shifts, Government Funding, and a Bit of History

Lately I’ve been reflecting on the recent reductions in the federal workforce and the elimination or restructuring of key departments. This isn’t a political statement, just a look back at my own path and where I believe things may be heading for those of us who work alongside government systems.

I began my career in workforce development and nonprofit leadership during the Engler administration in Michigan. At the time, there were plenty of stereotypes about what it meant to be a “state worker.” The popular image was of someone who was lazy, difficult, and waiting around for a golden pension. But anyone who has worked in or with a government agency knows the truth is far more complicated. What often slows things down isn’t the people, it’s the process. The rules, regulations, and layers of compliance that come with federally funded programs tend to create delays and frustration that feel personal, even when they’re systemic.

I know this from experience. I was a young single mom who had just been laid off from a seasonal job. When my employer failed to complete the required unemployment paperwork, my eligibility hung in limbo. Every week I showed up at my scheduled check-in, and every week I left empty-handed. It wasn’t the worker behind the desk who failed, it was the slow-moving, paper-dependent system we were all stuck in.

By 1996, negative portrayals of government employees had become common rhetoric. Michigan’s governor at the time pushed for widespread privatization. One of the most significant changes was the dismantling of the Michigan Employment Security Commission. Unemployment insurance and employment services were split, and nonprofits like the one I worked for were suddenly tasked with delivering programs that had historically been managed by the state.

This is where I began writing grants—submitting proposals to keep those employment services operational while a lawsuit determined who had the legal authority to provide them. The federal Wagner Peyser Act had originally mandated that employment services be delivered by “merit staff,” meaning qualified individuals who were free from political influence and employed by government or academic institutions.

Eventually, the courts upheld that interpretation. The lawsuit was settled in favor of merit staffing, and the full decision is explained in detail by The Century Foundation in this article Merit Staffing in State Employment Service and Unemployment Insurance Programs: Putting the Toothpaste Back into the Tube.

Still, that era opened the door for nonprofits to step in and deliver publicly funded services, often under greater scrutiny and tighter margins than their government predecessors.

Fast forward to today and the narrative feels familiar. Federal employees and nonprofit staff are once again being regarded as inefficient, bureaucratic, and unaccountable. But I’ve spent my career in NGO executive leadership, and I can tell you from firsthand experience that the level of accountability required when you accept government funding is staggering.

Every dollar must be tracked. Every purchase must pass all four cost principles. Every transaction must be justified, documented, and filed—request, approval, order, packing slip, invoice, receipt, proof of payment. You may be reimbursed, or you may be asked for more backup. You will be monitored, audited annually, and if your grant is large enough, subjected to a single audit by a third-party firm. And in the worst case, you may get the call for an Office of Inspector General audit. I’ve had one of those. You need documentation for everything going back ten years.

Now we’re seeing lawsuits play out as departments shrink, payments are delayed, and nonprofits bear the weight of unreimbursed work. In many cases, nonprofits are winning in court—but the damage may already be done. Staff have moved on. Departments have been stripped. Trust has been eroded. Programs have paused or vanished altogether.

This moment feels eerily similar to the 1990s. I believe we are once again at a turning point. As government capacity shrinks, the private sector is beginning to step into the vacuum. What began with outsourcing specific programs may grow into full-scale delivery of taxpayer-funded services by private companies. I am not saying whether this is good or bad—but I have seen this road before.

Digging for receipts in our storage facility, Beattyville, KY. May 2017.