D.C. has a lot of federal workers. A government shutdown would have big impacts

All eyes are on Capitol Hill, watching as Congress gets closer and closer to failing to fund the federal government, forcing a shutdown.

Shutting down the government could have big reverberations across the country — and significant consequences for the people who live and work and visit the nation's capital.

Washington, D.C., Maryland and Virginia combined have about 400,000 federal workers, plus hundreds of thousands of military service members and government contractors. The region's growth and competitiveness have long been tied to the federal government.

That means shutdowns have big implications for the local economy, impacting small businesses and tourism and straining the local social safety net. Those effects tend to get worse as shutdowns get longer.

While there's a particular concentration of federal employees in the D.C. region, there are plenty of federal workers across the country, meaning that similar questions about the economic and social effects of the shutdown are relevant nationwide. (The federal government employs about 2 million civilian employees total and there are about 1.4 million active duty military personnel.)

Read on for answers to your questions about the shutdown and the impact on federal workers.

Just how big of a deal is this for the D.C.-area economy?

That really comes down to how long the shutdown lasts, according to Terry Clower, the director of the Center for Regional Analysis at George Mason University.

"If it's a few days and this is just all political theater, then there's probably not a lot of meaningful, lasting impact" to the broader economy, Clower predicted. "If it starts dragging on, then there is a cascading series of effects."

Those will probably be felt by individual workers contending with making ends meet without a paycheck in an area where even well-paid earners are sometimes living paycheck to paycheck.

"I would expect to see regular families in our region starting to have some real problems, probably in no more than a week or so," Clower said.

The shutdown is also coming at a complicated moment for D.C. and other high-cost urban metros, as they struggle to regain their footing after the pandemic. Downtown D.C.'s sidewalks and lunch spots are still quiet these days, in part because many federal workers have continued to work remotely, despite pressure from the Biden administration to return to the office.

"What we're seeing in the data is that the federal workers who are not going downtown haven't quit going out to eat [or other economic activities]," Clower explained. "They're doing stuff maybe in suburban markets, close to home. So it's still a loss."

And regardless of whether they're working in-person or remotely, federal workers in D.C. and the suburbs may need to tighten their spending, something that could mean an added challenge for local businesses already reeling from the pandemic.

"That's a lot of purchasing power you're pulling out of the economy," Clower said.

What can we learn from recent history about how past shutdowns impacted the D.C. region?

In the 2018-2019 partial government shutdown, the D.C. area lost $1.6 billion in economic activity in wages during the bulk of the closure. Some wages were paid back eventually, but the economic hit was still lasting.

On the ground in D.C., that meant a quiet downtown, longer lines at food pantries and a big dip in tourism — one local tour guide at the time referred to the National Mall as "borderline comatose." (In fact, the D.C. government had to step in to clean up the trash piling up on the Mall.)

And those impacts were the result of a partial government shutdown, not a full one, because Congress had already passed some spending bills by the time the closure happened. That included funding for the Department of Defense, which accounts for about 12% of annual federal spending overall.

But this year, Congress hasn't passed any appropriations bills yet, meaning that the federal government is headed toward a full shutdown. The last time that happened was in 2013, when the government shut down for 16 days. Some estimates suggest the D.C. region lost $220 million in economic activity per day during that event.

The fact that defense spending isn't exempt from congressional disruption is a big deal in the D.C. region, particularly in Virginia, which receives the highest amount of federal defense spending on a per capita basis.

The Pentagon is in Arlington, Va., and Northern Virginia is dotted with national security-related government facilities and defense contractors. There are 15 military installations further south in the Hampton Roads area, including Naval Station Norfolk, the largest naval base in the world. One estimate suggests that federal defense money directly or indirectly funds almost 900,000 jobs in Virginia.

So this will have a big impact on individual federal workers?

Government agencies have a well-worn response for when Congress holds their funding hostage: Each of them develops a plan for how to respond when the money spigot turns off. One of the main things they do is determine what work (and therefore which workers) is considered "essential" to the daily functioning of the nation, and which is "non-essential."

"Essential" employees — think border patrol guards, TSA agents, active-duty military and other national security personnel — are expected to come to work, but they don't receive a paycheck. "Non-essential" employees are furloughed until the shutdown ends.

In D.C., there are plenty of well-paid white-collar government workers, but many other government workers are lower-wage earners. Everyone will be trying to make ends meet without an on-time paycheck — and that's hard in a high-cost area like D.C.

When shutdowns stretch for a long time, they cause real pain to government workers. People fall behind on rent and mortgage payments and struggle to pay for food and medicine. Previous shutdowns have resulted in long lines at local food pantries and unemployment offices.

And even if this closure ends quickly, the fact that shutdowns are becoming a habit in Congress has serious consequences for the federal government's reputation as a stable employer. The government is already struggling to attract top young talent, and it could also lose current federal workers sick of shutdown instability.

"It's been hard for a few years now for the federal agencies to attract workers, particularly in the D.C. area, because the cost of living is very high compared to federal wage scales," Clower explained.

"If we're going to have this series of political events where, just for show, we're going to shut down the government for a period of time, somebody's thinking, 'Hang on a second, why do I want to mess with that?'"

Will everyone get paid eventually?

Some will, some won't. Federal workers are guaranteed back pay eventually, and that's new. In 2019, Congress passed a bill that ensures that furloughed or essential workers will be paid back "as soon as possible after the lapse in appropriations ends." That law was largely enacted due to the financial impact of the shutdown on workers.

But government contractors — who are more numerous even than direct government employees in the D.C. region — don't necessarily have that assurance. That's because they're employed by separate companies who provide services to the federal government, not by the government itself.

Some contractors are highly paid, working in consulting roles for big companies that do business with the government. But many contractors are lower-wage workers, like janitorial staff in federal buildings, cafeteria workers and security guards. Those people bear the brunt of the impact of a government shutdown. Sometimes they're even laid off.

What kinds of assistance do federal workers need during shutdowns?

In the past, social services organizations and local governments in the D.C. region have had to step up, providing food, mortgage or rent assistance, and other help. That's a role they've gotten used to playing during the pandemic emergency, creating networks of nonprofits and local agencies that can respond to public needs.

"We haven't dismantled any of that as a result of our COVID recovery," said Jeff McKay, the chairman of the Board of Supervisors in Fairfax County, a suburb of more than a million people outside of D.C. "And so I feel like we're in a much better position than we were in 2018 in terms of infrastructure."

But, McKay says, local budgets are tight, in large part because of the ongoing recovery from COVID.

"Just assuming that local governments are going to pick up the slack here if we get into a longer term shutdown is not realistic," he added.

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