DOGE’s $455 Million in Labor Savings Carry Costs for US Workers

Trump administration plans to save $455 million by cutting Labor Department contracts, grants, and office leases will cost American workers and reduce efficiency, former agency officials say.

Elon Musk’s Department of Government Efficiency aims to cancel grants from the DOL’s Bureau of International Labor Affairs for a savings of about $237 million. The subagency works to improve labor rights oversees.

It also seeks to shutter 87 DOL offices nationwide to save an estimated $23 million and terminate at least 96 agency contracts for trainings, software, and other services worth about $192 million, according to a Bloomberg Law analysis of the DOGE website.

All together, the potential savings could make it harder for the agency to enforce laws protecting workers’ safety, pay, and ability to compete in the global economy, former DOL officials and grant recipients said. In the case of the Occupational Safety and Health Administration, for example, office closures and the potential for staff cuts could slow agency enforcement and oversight designed to prevent on-the-job illnesses and injuries.

“What you’re going to see is lower inspection numbers for the same amount of work, less innovation, less proactive activity,” said said Doug Parker, who led OSHA during the Biden administration. “And unfortunately, in time, you’re going to see more workers getting killed and injured, because the deterrent effect will be lessened.”

As part of President Donald Trump’s mandate for “cost efficiency” in the federal government, agencies like the DOL are combing through their work with the goal of reducing overall spending or reallocating funds to advance the administration’s agenda. That could also include workforce reductions.

DOGE’s site has been updated multiple times and faced criticism for inaccuracies. Among all other agencies, it ranks the DOL No. 7 for most cost savings on an “efficiency leaderboard” posted there.

“I’ve instructed my team here at labor to find more opportunities to save you money. I’ll keep fighting to put the American worker first by getting rid of waste, fraud and abuse,” said Labor Secretary Lori Chavez-DeRemer in a video on the DOL’s cuts.

Office Closures

Office closures could impact enforcement of more than a dozen laws that require employers to maintain safe workplaces, pay minimum wages and overtime, and provide job-protected family and medical leave, among other basic employment protections, former DOL officials say.

The 87 offices slated to have their leases expire span the country from Baltimore, Md., to Tacoma, Wash. Of that amount, 37 belong to the Wage and Hour Division and OSHA.

The full impact of the closures will be more fully seen once the administration decides what to do with the staff at the locations, said Paul DeCamp, a former wage and hour administrator under former President George W. Bush, now a management-side attorney at Epstein Becker & Green PC.

“The real measure of whether the agency will suffer in terms of its enforcement is the head count, not the office footprint,” DeCamp said, because most of the day-to-day work of wage division investigators takes place at worksites they are inspecting. “There can be a lot of good reasons why it makes sense to terminate a lease,” he added.

While it’s unclear whether workers at these shuttered offices will be absorbed by other agency outposts, former DOL officials say the physical distance between offices will slow down investigations at both OSHA and WHD.

If the offices are not replaced, that could increase the time workplace safety investigators spend traveling to and from worksites, resulting in less time spent on actual investigations and longer case processing times.

The impact of the closures will also be more acute in areas that have high-risk industries or weak labor enforcement at the state level, like in Baton Rouge, La., where the only OSHA office in the state is slated to close. Louisiana doesn’t have a state workplace safety agency, and relies on that sole federal OSHA office to ensure workers are safe on the job, in particular for its large refinery and chemical plant industries.

“That would leave no OSHA presence in Louisiana,” Parker said. “You can’t expect an effective response when you leave gaps in the country literally 500 miles wide without effective OSHA coverage.”

Another former wage official also said these offices serve as access points for workers and employers to the federal government. Their purpose isn’t only as a workplace for investigators, but also to intake complaints and serve as a resource to both employers and workers for information about the numerous laws the agency enforces.

Jessica Looman, the former WHD administrator during the Biden administration, said closing these offices “would result in less access to the protections and services that the Wage and Hour Division provides for millions of workers.”

Canceled Grants

DOGE’s cuts to grants have largely hit the agency’s international labor affairs office, which has a mission to ensure US workers “have a level playing field” by enforcing trade agreements and supporting high labor standards abroad.

“Americans don’t want their hard-earned tax dollars bankrolling foreign handouts that put America last,” said DOL spokesperson Courtney Parella " That’s why we’re focused on improving oversight and accountability within this program – and across the entire department – while prioritizing investments in the American workforce.”

Recipients of those grants dispute the characterization by the Trump administration that these programs weren’t benefiting US workers. They say that programs to improve job quality in other countries like Mexico and Bangladesh ensured that forced labor and illegal child labor wasn’t undercutting American workers and products in the global economy.

The programs “reflect long-standing bipartisan commitments to strengthen labor standards and fight against trafficking, child labor, and exploitative ‘cheap labor,’” the Solidarity Center, a non-profit and recipient of multiple ILAB grants targeted by the cuts, said in a statement, “so that American workers and businesses are not competing with countries that break the rules.”