This is completely true. Let's also not forget that these employees quickly become unemployable in any other sector. They are literally trapped in the region, because most of these jobs are simply a part-time task for a single worker in the private sector, or completely automated. This further drives up home prices, because even if you hate the area, you're going to buy whatever you can afford since you know you aren't going anywhere.
DC: The weather of Philadelphia, the home prices of the Bay Area, the traffic congestion of Honolulu, the hostile to newcomers attitude of Seattle, and the not-so-bright but got rich off the system anyway culture of Wall Street.
What a place.