Government shutdown: Will those who like government least miss it most?
The mail will still go through, as will Social Security payments, veterans benefits, and military pay. Federal employees will still direct plane traffic, inspect food, and prosecute crime. By its own estimates, the federal government represents about 8 percent of the United States economy, so the economic impact of a long government shutdown would eventually affect just about everybody. Even in the short term, some groups will notice. Ironically, some of those who will be affected most are those who like government least. Here's a look at four such groups:
1. Small business
Small businessmen usually want to get government off their backs. But government contractors and small businesses waiting for a loan from the government could see their money delayed – or worse – in a government shutdown. The Small Business Administration would stop processing loan applications. Government contract workers could be furloughed without pay.
Historically, federal employees have been retroactively compensated for any time missed from work during a shutdown, but contract workers have not always, depending on the type of contract and schedule of payment.
The federal government does about $500 billion a year in contracts. About half of that money goes to industry supplies and the other half to services, and service workers are more likely to be furloughed in a shutdown. It’s hard to tell at this point how many contractors would be affected, but it could be hundreds of thousands, says Stan Soloway, the president and CEO of Professional Services Council, the largest organization that represents government services contractors.
Hardest hit would be areas with heavy concentrations of government and contract workers, like Huntsville, Ala., Hanscom, Mass., or northern Virginia, Mr. Soloway says. “It’s lost top-line revenue, and if you’re a small company and you go three or four weeks with a significant portion of your income lost, you can just imagine the impact.”