Last Updated on February 26, 2026 by Chicago Policy Review Staff
When lawmakers debate anti-LGBTQ+ legislation, the conversation is often framed as a cultural or moral dispute. House floor speeches and twitter fights are often centered on medicine, children, sports, and freedom of speech. It is effective for grabbing attention, to the point where people have built entire careers around anti-trans rhetoric. But this framing obscures what is becoming increasingly obvious: these laws are also an act of economic self-sabotage. By narrowing who can safely and freely participate in the workforce, anti-LGBTQ+ policies shrink the talent pool, contribute to a demographically homogenous workforce, and weaken the very economic capacity they claim to fight for. Nowhere is this clearer than in the federal government itself.
In late 2024, House Speaker Mike Johnson instituted a trans bathroom ban in the United States Capitol. In 2025, President Donald Trump followed up with a federal bathroom ban via executive order. Across federal property, and a growing number of state property, it is functionally impossible for transgender government employees to work safely in their own workplaces. The choice for a trans civil servant is essentially to either subject themselves to the embarrassment, humiliation, and potential victimization of using the wrong bathroom or place their employment in jeopardy by using the bathroom that aligns with their gender identity. This intense risk calculus must be conducted every time nature calls, so it makes sense why only around 0.6% of the federal workforce identifies as transgender. The result is not simply discomfort, but exclusion. People leave. People never apply. And an institution that already struggles to recruit and retain talent loses a whole segment of skilled workers, often in highly specialized fields.
This labor-market shock is a cost that policymakers have chosen to ignore. The federal government is the largest employer in the country, responsible for everything from disaster response to scientific research to national security. When the government chooses to exclude nearly 3 million Americans from their workforce — some of whom are not just being excluded, but driven from their jobs — it loses institutional knowledge, training investments, and long-term capacity.
That loss does not stay contained to one or two people walking (or running) away from their jobs. It ripples outward and has lasting effects. For those who choose to stay working, their work performance decreases. Research shows that unhappy workers slow agencies, degrade service delivery, and overall decrease the quality of work produced. Not to mention the mental and physical toll that being denied basic humanity takes on the individual. This substantial cost to the federal workforce is backed by no evidence that transgender people pose a risk to cisgender people in public bathrooms. In fact, it’s the opposite.
What makes this moment especially dangerous is the illusion that some institutions can absorb the damage while others “hold the line.” As Alex Wagner has argued in the context of the military, this is a fantasy. Institutions do not float above politics; they are shaped by it. When political pressure makes exclusion cheaper than inclusion, even powerful institutions bend.
“We’ve watched universities, media companies, and other institutions shift their tune on rights when their bottom line is at stake,” Wagner warned. That same dynamic now confronts the federal workforce. If exclusion becomes normalized, agencies will adapt by narrowing who they recruit, who they promote, and who they expect to stay. Over time, that adaptation hardens into structure. What begins as a bathroom policy becomes a pipeline problem.
Lawmakers also fail to consider the long-term implications. A workforce that no longer reflects the diversity of the society it serves becomes less responsive, less innovative, and less legitimate in the eyes of the governed. Research consistently shows that diverse teams positively impact the upward mobility of the demographics they represent. When the government narrows who is allowed to be in the room, it loses these advantages at exactly the moment it faces mounting complexity and pressures from issues both domestic and international.
The paradox is stark: lawmakers who frame anti-LGBTQ+ policies as a defense of order are actively undermining the state’s ability to function.
There is also a broader signaling effect. Young Americans — especially those with high levels of education and mobility — are paying attention. When otherwise apolitical civil service workers see that public service comes with the risk of exclusion, they choose other paths. That choice compounds over time, hollowing out the next generation of civil servants until every suit in Washington looks, thinks, and governs the same way. The result is a government less equipped to govern, staffed by fewer people willing to endure political hostility for the sake of service. In short, it is an America that fails.
Anti-LGBTQ+ legislation is often defended as symbolic politics, but symbols matter precisely because they shape behavior, and we’ve seen it before. The lesson from history is simple: exclusion is expensive. It always has been. Societies that turn away talent in the name of a bigoted ideology pay for it in stagnation, inefficiency, and decline. The United States is not immune to this rule, and the federal government is not insulated from it.
If policymakers truly care about economic strength, institutional resilience, and national competitiveness, they cannot treat LGBTQ+ inclusion as a side issue. It is central to the health of the workforce that undergirds the entire state. And as Wagner reminds us, it cannot be left to a single institution to hold the line while others retreat.
An economy cannot thrive if its government cannot staff itself. And a government cannot staff itself if it tells whole communities they are not welcome to show up.
Image source: “Queer in Tech” free stock photos from Mapbox. Shot By: Dom Brassey