USDA's plan to relocate research agencies to the Midwest unleashes a brain drain

Two critical federal research agencies are being gutted after workers were asked to relocate from Washington to the Midwest.

Starting Monday, new and relocating employees can begin reporting to temporary offices in the Kansas City region, the U.S. Department of Agriculture said. But more than half the workers from the Economic Research Service and the National Institute of Food and Agriculture have declined to relocate or even respond to transfer assignments, creating a brain drain.

The move was announced in June by USDA Secretary Sonny Perdue, beating out more than 100 other proposals. The USDA didn't name which state would house the new headquarters but said a cost-benefit analysis showed a $300 million savings over the course of 15 years, which will help to fund more research, get researchers closer to stakeholders in agriculture and save taxpayer dollars. Perdue added that state and local governments offered "generous relocation incentives packages" totaling more than $26 million. The governors of Kansas and Missouri declined to specify what the incentives were.

The relocation comes at the cost of existing talent. In total, 72 ERS workers agreed to relocate to Kansas City, while 99 had declined, the USDA said last week. At NIFA, 73 accepted and 151 declined. (The number of workers reported as declining included employees who never responded to relocation requests.) Just under 100 jobs for both agencies will remain in the D.C. region. The USDA said 91% of its more than 100,000 employees are outside Washington.

President Donald Trump, left, greets Sonny Perdue, U.S. secretary of agriculture, on stage during the 100th American Farm Bureau Federation Convention in New Orleans, Louisiana, U.S., on Monday, Jan. 14, 2019.

Kathleen Flynn | Bloomberg | Getty Images

"We expect these numbers may fluctuate until Sept. 30, the report date to the Kansas City region for relocating employees, as employees are free to change their status until that date," a USDA spokesperson said. "These anticipated ranges were taken into account in the department's long-term strategy, which includes both efforts to ensure separating employees have the resources they need, as well as efforts to implement an aggressive hiring strategy to maintain the continuity of ERS and NIFA's work."

Pushback on relocation

The move has been met with criticism from congressional Democrats, watchdog groups and workers' unions, which complained about the short time employees were given to decide. Others stressed that separating scientists from other collaborators in Washington would hinder their ability to work and produce research on a range of topics. They've also cited the agency brain drain, since experienced workers are declining to relocate.

"This is not a choice between Kansas City and Washington, D.C.," said Kevin Hunt, acting vice president of American Federation of Government Employees Local 3403 and a 10-year employee of the USDA. Hunt works in the ERS and said even though he is from Missouri, he declined relocation. "We are being asked to relocate to be closer to stakeholders, but we are a national policy-focused agency. This is about people's lives and the amount of time we are being given."

Others balked at the idea of the USDA holding a competition for relocation. Greg LeRoy, executive director of Good Jobs First, a watchdog group that promotes accountability in economic development, called it reminiscent of Amazon's nationwide search for its second headquarters.

"This is Uncle Sam imitating Jeff Bezos," LeRoy said. "Except that these are federally funded taxpayer jobs. The residents of Kansas and Missouri already pay federal taxes, why should they also give a handout to the USDA because the secretary of Agriculture wants to move some jobs there?"

Ending the economic border war

Outside of the Beltway, state and local officials in the Kansas City region have cheered the move. The relocation comes as Kansas and Missouri look to put an end to the economic border war that has long plagued the two states — something previous governors were unable to do. Research from the Hall Family Foundation shows some $335 million has been spent over the past decade by both states luring companies back and forth over the border. The joint proposal to house the USDA had separate state presentations as part of a regional bid.

Missouri's Republican governor, Michael Parson, just signed a bill that would end offering incentives for companies to cross state lines for jobs, and Democrat Gov. Laura Kelly of Kansas has pledged to do the same. Both governors told CNBC that landing the jobs would be a win for their respective state, but no matter where they wind up, the Kansas City region winds up benefiting.

"I think every day you are trying to sell your state, and I am sure the governor of Kansas is trying to sell her state over there too — it's always competitive and that's a good thing," Parson said. "But at the end of the day, I want to stress, it's a win for both states."

Kelly agreed.

"Clearly it would be a tremendous economic boom for us to be able to capture 500 new, very well-paying jobs, bringing in some of the best and brightest in agricultural research from across the country — it would do wonders not only for our communities, but the state as a whole," Kelly said. "But quite honestly, whichever side they end up on, it works for the Kansas City metro area and the state of Kansas."

As for critics who take issue with incentive packages, Parson said it's important to keep the boost to the economy in mind.

"With these packages you always have to look 10 or 20 years down the road — the effect that has of 500 good-paying jobs coming to the region — that is going to be a benefit to the economy," he said.

— CNBC's Lori Ann LaRocco contributed to this report.

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