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BREAKING NEWS

Shutdown Effects: Economic costs far from DC

Shutdown Effects: Economic costs far from DC
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WASHINGTON - For many Americans, the idea of a "government shutdown" brings to mind empty desks and hardship in Washington D.C., but a month into this latest round of the government furloughs, there are serious impacts far beyond the Beltway.

The data around the shutdown tell the story.

At the most basic level, there are the government employees themselves. There are a lot of federal workers in the greater Washington area, more than 350,000. But the federal government is a massive employer, with more than 2 million civilian workers nationally - excluding the postal service. That means most work and live, elsewhere.

The current shutdown affects only about 800,000, 40 percent, of those 2 million civilian federal employees, but that is a still a lot of people in states all across the country - many of them far from DC.

Outside of the DC area, the largest number of federal employees impacted per resident are in Alaska, Montana, New Mexico, South Dakota and Wyoming.
Outside of the DC area, the largest number of federal employees impacted per resident are in Alaska, Montana, New Mexico, South Dakota and Wyoming.

Apart from Washington D.C., Maryland and Delaware, the largest number of federal employees impacted per resident are in Alaska, Montana, New Mexico, South Dakota and Wyoming. Those states have many employees who work for the Department of Agriculture and Interior as well as Health and Human Services.

That means relatively large numbers of people in those states having to cut back on spending. Even if they eventually will get back pay, they don't have the money now to pay for groceries or gas or housing.

A Zillow analysis shows federal workers who are not being paid owe $438 million in mortgage and rent payments for this month alone.

And data show that many of the unpaid federal workers do not occupy the rarified air of the six-figure salary. In fact, more than 110,000 earn less than $50,000 a year, according to the Washington Post.

Those figures have an added weight when you look at data on how little many Americans have saved for tough times - even a missed paycheck.

A survey found that only 40 percent of Americans could use their savings to pay for a $1,000 unexpected expense.
A survey found that only 40 percent of Americans could use their savings to pay for a $1,000 unexpected expense.

A survey from Bankrate found that only 40 percent of Americans could use their savings to pay for a $1,000 unexpected expense, such as an emergency room visit or a car repair. Others said they would have turn to credit cards, borrowing from friends, a personal loan or something else.

But beyond the impact to federal employees, there are the lost services those workers supply. Farmers are having a hard time getting loans processed (this week many Department of Agriculture workers were called back to work, without pay). The Food and Drug Administration has reduced its food inspections.

And Native American Communities are especially hard hit. There is no money flowing to the Indian Health Service, which is at a standstill. That's 730 physicians, 2,300 nurses, 750 pharmacists and 40 hospitals in 37 states. Many of those doctors and facilities are based in remote areas where there are no good alternative providers.

The shutdown's impacts are also being seen and felt in the broader economy away from government employees and programs.

The shutdown\'s impacts are also being seen and felt in the broader economy away from government employees and programs.
The shutdown\'s impacts are also being seen and felt in the broader economy away from government employees and programs.

Bloomberg estimates that overall federal contractors could be losing as much as $200 million a day in lost or delayed revenue. Delta Airlines says it has already lost $25 million in revenue largely due to lost government flights.

Using the broadest possible economic measure, Kevin Hassett, the chairman of the Council of Economic Advisers, calculates that the shutdown reduces quarterly economic growth by 0.13 percentage points for every week that it lasts. Standard and Poor's estimates that if the shutdown persists one more week, it will have cost the U.S. economy $7.1 billion in lost value.

That's a lot of money - more than the $5.6 billion President Trump was seeking for the wall on the Mexican border - and it's being lost all over the country.

In other words, the shutdown is much more than a Beltway problem or issue. You can read stories about it in the local media everywhere, from Duluth, Minnesota to El Paso, Texas. It is causing real pain for real people across the country.

A month into the standoff, the real question may be, is there a point where all those local voices get loud enough to force Washington to act.