The Federal Government Shutdown: Its Impact on Employment

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As the second full week of the federal government shutdown comes to an end, the impact is being felt.

Government workers, for example, are not the only workers being affected. Many more people, many in the private sector, are now finding themselves unemployed.

Private sector government contractors including the consulting giant Booz-Allen and the engineering and aerospace giant Lockheed-Martin are laying off staff.

The North Carolina Department of Health and Human Services furloughed 337 workers whose salaries are paid from federal grants.

The National Institutes of Health reports that new research grants to scientists nationwide will not be made during the shutdown, which is likely to be another cause for temporary or permanent layoffs.

USA Today is reporting that construction companies that build courthouses, dredge rivers and renovate U.S. Park facilities are preparing to lay off thousands of construction workers.

Moody’s is predicting that these layoffs, coupled with an overall downturn in spending, will shave fourth quarter growth by two-tenths of a percent, a large amount during this very sluggish economic recovery.

And the irony here is that we may not know the extent of the impact on employment for some time because the shutdown has stopped the Bureau of Labor Statistics from collecting unemployment and other economic data needed to determine the impact of the shutdown on the economy.

Cities across America are feeling the impact of this shutdown as federal, state, local and private sector employees are laid off from their jobs, or required to work without pay.  If we are to continue to expand our economy, strengthen the middle class, help people make ends meet, and ensure that we do not experience another recession, we must end this manufactured crisis, which puts the safety, health, nutrition, and education of residents across the country at risk.

Please contact your Representative today by phone, email or Twitter, and let them know that you support the passage of a clean continuing resolution for fiscal year 2014 so that people impacted by this shutdown can get back to work.

Neil Bomberg

About the author: Neil Bomberg is NLC’s Program Director for Human Development. Through Federal Advocacy, he lobbies on behalf of cities around education, workforce development, health care, welfare, and pensions. Follow Neil on Twitter at @neilbomberg.