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This paper critically engages and builds bridges between the comparative welfare state and spatial inequality literatures. The comparative welfare state literature tends to focus on national level efforts and policies and, too often, treats the United States as an aberrant case that is not fully comparable to other advanced capitalist democracies. The spatial inequality literature has examined in detail disparities across U.S. regions and localities and has documented widening inequality in recent decades. But, with notable exceptions, the spatial inequality literature has not fully engaged the comparative welfare state literature and has displayed little concern for social policies that might impede or ameliorate the effects of inequality. To challenge and build bridges between these two important literatures, this article disaggregates public employment (federal, state and local) by U.S. county. Providing support for arguments advanced by Kenworthy and Hicks, our research finds that public employment impedes inequality, lessens poverty and boosts median household income. This corroborates prior research documenting that inequality is uneven, as are the impacts of neoliberal retrenchment. As such, research must take into consideration the rich and complex variation across regions and locales. Conversely, even as these findings challenge the welfare state literature’s tendency to over-emphasize national policies, they lend support to arguments that public policy can be consequential in the realm of social inequality and well-being. Our empirical findings offer a reminder that the welfare state and its impact are not restricted to national-level policies and protections. To fully understand the welfare state, especially large and heterogeneous federal polities such as the United States, it will be necessary to develop measures, methods and theories that capture a distributed and heterogeneous welfare state.