Right now, many households across the country are contending with the financial pressures resulting from the partial federal government shutdown. About 800,000 federal workers have been furloughed, and about 4 million government contractors are now working for free.1
Nine federal departments have scaled back operations
About 240,000 workers have been furloughed by Homeland Security alone. Even so, many essential federal government services are still being provided. The Social Security Administration is continuing to send out retiree benefits, and the Postal Service is still delivering mail.2,3
The longer the shutdown lasts, the deeper its possible economic impact
Kevin Hassett, who chairs the Council of Economic Advisers, estimates that each week of the shutdown hurts quarterly GDP by 0.13%. Some analysts think the economy could contract in Q1 if the shutdown drags on through the start of spring.4
What options do furloughed workers have?
The gig economy beckons, with short-term jobs that can be left behind with little notice if the shutdown ends. The New York Times recently noted a turn-of-the-year spike in online job searches by workers at federal agencies. Some furloughed federal workers are barred from accepting interim employment.3,4
On January 16, President Trump signed a bill into law to reimburse federal workers for lost wages when the shutdown ends. Furloughed federal employees who are receiving state unemployment benefits will have to return those benefits after they collect their back pay.3,5
As the gridlock continues, these employees and contractors are showing great patience and resourcefulness. Hopefully, they will not have to cope with financial anxieties and hardships much longer.
1. CNBC, January 2019
2. USA Today, December 2018
3. Orengonlive.com, December 2018
4. New York Times, January 2019
5. CNN, January 2019