Planned cuts to federal agencies could disproportionately impact Black workers in South Dakota and neighboring Plains states, according to data released by the Economic Policy Institute.
Why These Cuts Matter to South Dakotans
For South Dakota residents, these cuts extend beyond government statistics to real-world impacts on communities across the state. With three VA hospitals and nine clinics serving the state’s 65,000 veterans, staffing reductions could mean longer wait times for medical appointments and delays in processing benefit claims for those who served.
The economic ripple effects could hit small communities particularly hard. In places like Hot Springs, where the VA Medical Center (part of the VA Black Hills Health Care System) is a major employer, job losses could affect local businesses, housing markets, and tax revenues that support schools and public services.
For Black South Dakotans, who face an unemployment rate nearly twice the state average according to the U.S. Department of Labor, the loss of stable federal jobs with good benefits represents a significant setback for economic equity in a state where such opportunities are already limited.
“When we lose these positions, we’re not just cutting government payroll—we’re potentially dismantling career ladders that have historically provided economic mobility for underrepresented groups,” said Valerie Wilson, author of the Economic Policy Institute report, in a statement accompanying the data release.
Black federal employees, many of whom are veterans, face an uncertain future as the Trump administration pushes forward with plans to reduce the federal workforce by tens of thousands of positions.
While Black workers comprise just 1.2 percent of South Dakota’s federal workforce—about 142 employees–they represent larger portions in neighboring states—4.1 percent in Iowa, 5.4 percent in Nebraska, and 2.1 percent in North Dakota. According to the Economic Policy Institute, Black federal employees account for 5.3 percent of the total federal workers in Minnesota.
According to the U.S. Bureau of Labor Statistics, as of December 2024, South Dakota had approximately 11,800 federal employees. However, subsequent layoffs initiated by the Trump administration have altered this figure. The exact number of jobs lost in South Dakota remains unclear. According to South Dakota Searchlight and SDPB, state agencies have not confirmed a total.
Veterans Affairs Bearing Brunt of Reductions
Veterans’ advocates in South Dakota are voicing concerns about staffing cuts at the Department of Veterans Affairs. Marty Pennock, director of the South Dakota Department of Disabled American Veterans in Sioux Falls, told South Dakota Searchlight the cuts make his “blood boil” and expressed concern about impacts on services and veterans who lost jobs.
The VA operates hospitals in Sturgis, Hot Springs, and Sioux Falls, plus nine regional clinics, two veteran help centers, and three national cemeteries. Eve Derfelt, a VA public affairs deputy director, told South Dakota News Watch, “The VA facilities in South Dakota dismissed a small number of probationary staff.”
“This decision will have no negative effect on veteran health care, benefits, or other services,” Derfelt added.
According to the South Dakota Department of Veterans Affairs, state-provided veterans benefits and staffing will not be impacted by the federal cuts. Public affairs officers with the Sioux Falls and Rapid City VA offices did not respond to South Dakota Searchlight’s requests for comment.
Scale of Cutbacks Raises Alarms
Federal data analyzed in early 2025 by the National Partnership for Women & Families shows veterans are especially likely to work in government positions. Nearly one in five federal workers have military service backgrounds, compared to fewer than one in twenty workers.
According to workforce estimates reported by Reuters and The Washington Post in March, about 25,000 workers across U.S. government agencies have been fired, and another 75,000 have accepted buyouts from the total 2.3 million federal civilian workforce.
According to Veterans Affairs Secretary Doug Collins, plans call for reducing staffing levels at the VA alone to fiscal 2019 numbers—from the current 470,000 employees to approximately 398,000, a reduction of about 72,000 positions.
Administration Defends Efficiency Measures
Collins defended the cuts in a video posted to social media.
“The federal government does not exist to employ people. It exists to serve people,” Collins said in the video. He noted that doctors and nurses providing direct care are not being terminated.
VA spokesperson Pete Kasperowicz told The Guardian the agency is “not talking about reducing medical staff or claims processors” but targeting inefficiencies and “bureaucracy getting in the way of customer service.”
Collins stated in his video message that he’s “happy to partner with them to find things we need to get rid of so we can put the money where it belongs… back with our Veterans,” highlighting the administration’s position that restructuring aims to improve veteran services.
Some Republican lawmakers support the restructuring effort despite concerns. Rep. Greg Murphy, R-N.C., who sits on the House Veterans Affairs Committee, told The Hill that while there would be “short-term pain,” the purpose is to make government more efficient.
South Dakota Delegation’s Response
Rep. Dusty Johnson, R-S.D., has attempted to reassure veterans.
“Despite the claims of some, Congress won’t cut VA benefits as part of this year’s appropriations process,” Johnson told South Dakota Searchlight. Johnson added that any saved dollars “will be reinvested in the system to improve care.”
Sen. Mike Rounds, R-S.D., downplayed concerns about potential benefit reductions, also telling South Dakota Searchlight that recent Congressional Budget Office reports only offer options where cuts could be made.
“None of those have been presented as a proposal to be voted on,” he said.
Veterans Voice Opposition
However, some veterans at recent protests have expressed frustration with South Dakota’s congressional delegation. Bruce Watts, an Army veteran who served in Korea, told South Dakota Searchlight to “Step up and protect veterans’ rights” during a March 14 protest at the Sioux Falls VA Medical Center.
Impact on the Plains States
The Department of Veterans Affairs employs many Black federal workers across the Plains states. According to the April 9 Economic Policy Institute report, 46.5 percent of Black federal employees work at the VA in South Dakota, approximately 70 employees. In neighboring states, the numbers are similarly high—46.3 percent in Iowa, 27.4 percent in Nebraska, and 45.8 percent in North Dakota.
According to the April 9 report, black federal workers nationwide average about 12.3 years of service, reflecting long-term career commitments that widespread cuts could now disrupt.
The Path Forward?
As federal agencies implement these workforce reductions, the impacts will likely be felt unevenly across South Dakota communities. While administration officials promise improved efficiency and maintained service levels, veterans’ advocates and affected workers remain skeptical.
The Economic Policy Institute’s Wilson warns that these cuts could reverse decades of progress in creating pathways to middle-class stability for Black workers.
“Public sector employment has historically provided better, more equitable job opportunities for skilled and often highly educated Black workers compared with available private-sector jobs,” she noted in the April 9 report.
For South Dakota’s small towns and rural communities where federal facilities serve as economic anchors, the coming months will reveal whether the promised efficiencies materialize or whether essential services deteriorate as experienced workers depart.
