The government shutdown began amid a fight Republicans picked over health care reform, but as it drags on, it draws attention to the wider interconnectedness of government work and the general economic health of the nation. When hundreds of thousands of government workers can’t work or are made to work without pay, nearby businesses lose hundreds of thousands of customers. When public lands close, nearby communities lose millions of dollars’ worth of economic activity from tourism. In the end, it seems likely that it will end up costing jobs at a time of stubbornly high unemployment.
One economist estimates from previous shutdowns that the Washington, D.C. area loses 0.02 percent of its jobs each day the government remains closed. Communities like Colorado Springs, CO, Virginia Beach, VA, and Honolulu, HI, are each more dependent on the federal workforce than D.C., and thus potentially subject to worse jobs impacts from a shutdown. About a third of contractors in one survey say they are delaying hiring and nearly 60 percent say the shutdown negatively impacts their businesses. More than a quarter-million private sector contractor employees will be affected in some way — possibly including layoffs.
There are small businesses across the country that are suddenly running short of customers. Nevada’s $15 billion per year outdoor industry is faced with canceled tours, threatening layoffs for some of the 148,000 Nevadans who work in the industry. One restaurant in Maryland, where over a third of the state economy is tied to federal spending in one way or another, saw just three diners for lunch on Friday compared to the 100 that normally come from a federal building across the street. A nearby landscaping business laid off all but four members of a 32-person work crew after receiving a stop work order for federal properties it maintains.
Sandwich shops in New Orleans that depend on federal workers are seeing their orders shrink precipitously as furloughs hit about 10 percent of the nearby federal center. Lunch spots in Denver tell local reporters a similar story.
Temporary furloughs are different from permanent layoffs, of course, but idling workers still means idling customers for as long as the furloughs last. While the Pentagon announced over the weekend that it will recall some 300,000 civilian employees that had been furloughed, it’s not clear how much that change will protect private company employees whose jobs depend on Defense Department programs. Maryland-based Lockheed Martin is still furloughing 2,400 workers — down from 3,000 prior to the shift in furlough policies by the Pentagon — due to contract freezes stemming from the shutdown. These figures don’t necessarily indicate job losses, but they signal risks to the consumer spending that supports other jobs nearby.
A year ago, conservatives waged an electoral campaign that featured prominent (and dishonest) denouncements of Democrats like Sen. Elizabeth Warren (MA) and President Obama for pointing out that the government helps foster prosperity for those willing and able to work for it. Now, those same conservatives are unintentionally reinforcing the core progressive point that the government is a buoy and not a drag for everyday citizens’ hopes of working their way to a better life.