During a shutdown at any given time, $275 million in average compensation for federal workers is delayed each day. In the recent 35-day shutdown, more than $9 billion in federal compensation went unpaid. The government was reopened for three weeks and it’s in the process of paying the amount owed to the workers who were furloughed. If the government shuts down again, this entire process will have to start all over again. This means that federal workers will still not get their payments. After that, there will be a total of $2 billion in compensation that will go unpaid each week.
The effects of this withheld pay don’t just affect the federal workers. It has wider implications on the entire government. The partial shutdown between December and January affected a total of 60 government agencies directly. It also affected tens of thousands of government contractors and their staff. According to an analysis by CNN, the Consumer Product Safety Commission, for instance, had $8 million in compensation that went unpaid to its employees during the shutdown. The commission is often involved in issuing recalls on defective consumer products. 500 employees who work for the agency missed an average of $16,000 in pay or about $450 a day.
But the amount was even bigger at the Department of Homeland Security. More than $2 billion in compensation was delayed translating to approximately $80 million a day. The shutdown affected about 200,000 employees at the department. There were reports that some of the employees affected had to call in sick days and find other jobs to make up for the missing pay. Some of the other agencies affected included the Small Business Administration, the Department of State, the Securities and Exchange Commission, as well as the Equal Employment Opportunity Commission.
In most cases, it’s only the people at the top echelons of a given agency that get paid during a shutdown. It seems now that there’s a real possibility that we might be heading to another shutdown if a deal is not struck before the Friday midnight deadline. There was hope that a bipartisan short-term spending bill was on the cards but talks came to a grinding halt over the weekend.
Many analysts say that even though federal employees eventually get their pay once the government is reopened, businesses that rely heavily on this income don’t get to see it. The economic impacts are so widespread but people rarely talk about them. The White House has continued to insist on funding for the border wall but House Democrats are not bulging. The bipartisan deal that failed to materialize over the weekend could have granted the president more money on stronger border security including a small portion of the $5.7 billion that he’s demanding for the wall. It wasn’t clear whether Trump would have signed the bill. So far, no one knows if the government will remain open after Friday this week. But one thing is clear. The impact of another shutdown on the economy and the livelihoods of American citizens will be huge.
