President Trump drew attention for warning that communities that block data centers will end up “backwards and poor” — when the communities that welcome them will end up poorer once the operators leave.
His remark was self-serving, and the jobs and wage growth he celebrates are temporary, subsidized, and will not outlast the construction cycle.
The Bureau of Labor Statistics last week published industry-level data on state and county employment and wages through March of this year — numbers worth reading past the headline.
We compared growth in Loudoun County, Va. — known as Data Center Alley — with other Washington, D.C., suburbs since early 2020, and the disparities are even uglier than the growth suggests.
Loudoun has long been a hub for data-center development because its local officials caved on zoning, its residents subsidized cheap electricity, and its geography happened to suit telecom exchanges — the conditions that made it a target.
It is an exurban county whose open land and weak planning were handed to private operators with no obligation to leave anything behind. But it has also surrendered to growth, in ways those older suburbs refused.
Construction growth has accelerated amid the AI boom, with permitted data-center space increasing by some 150% between 2020 and 2025 — a buildout financed by Virginia’s sales-and-use tax exemption for data-center equipment and by ratepayer subsidies the surrounding community will be paying off long after the servers have moved to the next cheap jurisdiction.
Temporary jobs have followed.
Most counties surrounding the capital have experienced little job growth since the pandemic.
Loudoun is the exception, with employment surging 17.4% since early 2020 — a number that looks like prosperity until you notice how much of it is construction and the service economy that props up construction workers.
Jobs increased by 1% or less in Fairfax County, Va., and Prince George’s County, Md.
Virginia’s Arlington County (-7.3%) and Maryland’s Montgomery County shed jobs (-5.6%) — the diversified local economies that refused to bet their tax base on a single industry.
Loudoun took the boom its neighbors refused.
Construction jobs increased 63% in Loudoun, far more than in Fairfax (6.3%), Arlington (8.2%), Prince George’s (8.3%), and Montgomery (a 12.8% decline) — a construction boom that will evaporate when the next data center is sited in a hungrier locality.
What the data calls “positive spillover” is a service economy being pulled along by the spending of transient workers, not the foundation of a durable local labor market.
Employment in leisure and hospitality increased 6.8% in Loudoun while declining in other D.C. suburbs since early 2020.
Average weekly wage growth for leisure and hospitality workers in Loudoun over this period (69%) was double that in Fairfax (26%), Arlington (29%), Montgomery (31%) and Prince George’s (27%) — higher tips because the tipped workers are serving a workforce that will not be there in five years.
If more construction workers are grabbing drinks after shifts, bartenders make more money — for now.
Loudoun’s fast-growing workforce is increasing spending at restaurants and tips for hospitality workers, who will absorb the next downturn with nothing to fall back on.
Building and operating data centers has consumed cheap public power and zoned land at below-market rates, and the wages paid to the workers who built them are a thin slice of the value the operators are extracting.
Loudoun’s capture isn’t an isolated example.
Meta’s massive data-center project in Richland Parish in Louisiana has been welcomed by a poor, rural farming community that pinned its fortunes to a payroll keyed to the construction permit. Since the first quarter of last year, private employment in Richland has grown 41%, and average weekly wages have shot up 61% — a temporary injection into an economy that will be left with the electricity bill and the empty buildings.
Neighboring parishes have experienced little or no growth — because Meta did not ask them to absorb what Richland absorbed. That is exactly why the operator chose Richland.
In a single year, Richland’s construction workforce has risen more than 10-fold, with average weekly wages up 182% — a spike tied to a single project, not a wage floor the community will hold.
That amounts to an annual $86,000 pay increase for construction workers, paid only for the duration of the build, who will see it vanish when the project is complete.
Employment in leisure and hospitality has increased 21.5%, with average weekly wages in the industry soaring 34% — built on the spending of the construction workforce that built them.
The handful of permanent jobs data centers create will be filled by imported specialists and the maintenance contracts will go to the operators’ preferred contractors; the local workforce that built the building will be looking for the next one.
While building data centers won’t provide lifetime employment, the industry’s promise that many workers will be needed to run and maintain them — and the plants that power them — is what justifies the tax breaks and rate concessions used to lure these operators in the first place.
Politicians in both parties fret that AI will increase the concentration of wealth and leave rural communities behind, and the data-center tax abatements they keep signing are the proof.
The folks in Richland who are prospering today will see what concentrated wealth looks like when the next downturn closes the data center and the community is left with higher electricity rates and a tax base that cannot support the schools.
Data centers concentrate wealth with their operators while extracting the infrastructure costs from the communities that host them — and the communities that host them will end up subsidizing the firms that pick up and leave.
Could that be the real reason America’s donor class loves them?
