Pay for millions of federal workers is at risk with a looming government shutdown
With six kids under the age of 15 to support, Stephen Booth, a police officer for the Air Force in Kansas, doesn’t have room in his budget for a missed paycheck.
But like millions of other government employees across the country, Booth is bracing for his pay to stop indefinitely at the end of the month as Congress careens toward a government shutdown.
House Republicans left Thursday unable to reach a compromise within their ranks over a new budget, including funds for the Defense Department, with a handful of conservative holdouts demanding additional spending cuts. Unless Congress acts, the federal government will not be able to pay its 4 million employees after Sept. 30.
That has Booth, a veteran with nearly two decades of law enforcement and security experience, beginning to think of ways to get by without pay, like feeding his family with the meat he can get from hunting, eggs from his chickens and the money he makes driving on the side for Uber.
“The politicians aren’t thinking about us down here on the ground floor doing the work,” said Booth, who is also a local liaison for the American Federation of Government Employees, a union representing federal workers. “Some of us live paycheck to paycheck. You take away a paycheck, how am I going to live for the next two weeks? How can I take care of my kids? How am I going to take care of my wife? And that type of mindset ends up causing bad things to go through some people’s minds and some people can’t get through it.”
The shutdown comes at a particularly precarious time for many households already struggling with persistent inflation that has driven up the cost of rent, child care, groceries, transportation and utilities. At the same time, a string of Covid-era benefits have been expiring, such as the child tax credit, rental assistance and the pause on student loan payments, which are now set to resume in October. To cope, households have been spending down their savings and increasing their credit card debts over the past year.
“It’s really rice and beans time,” said Amad Ali, a claims specialist with the Social Security Administration in New Albany, Indiana, and president of his local AFGE union. “Most of us are dedicated civil servants and we keep on doing it, we keep on pushing forward, but it’s tough.”
Ali, a veteran of the Iraq War who has been with the Social Security Administration since 2008, said he’s learned to prepare for the possibility of going weeks without pay. Despite three kids in middle school and college to support, he thinks he will be able to scrape by again this time.
In past shutdowns, workers received back pay once a funding bill was passed, but weathering the time between their last check and when that back pay arrives — and not knowing how long that period might be — could be financially crushing for some.
“I talk with a lot of our employees, and they are living paycheck to paycheck, so not getting a paycheck is going to result in some very hard times for folks,” said Ali.
While unemployment has remained historically low, economists said a government shutdown lasting beyond a month combined with an expanding UAW strike and pressure on consumers from inflation and higher interest rates could weigh down the wider U.S. economy.
“Any one of these things is not the thing that would tip you into recession, in my opinion, but put them all together, and it’s going to tax the economy, and it’s going to tax, specifically, those small businesses and families that are still recovering,” said Megan Way, an associate professor of economics at Babson College in Massachusetts. “It feels like rubbing salt in the wound right now because there’s so many families that are still getting on their feet from the pandemic.”
As a single mom of four, Jessica LaPointe, who works as a claims specialist for the Social Security Administration in Madison, Wisconsin, realizes she'll have to rely on help from friends and family to get through if there is a shutdown.
“I’m definitely in a position where I do not have a lot of savings. As a single mother, I’m mostly living paycheck to paycheck, so I’m just going to have to rely on the resources that are available to me, the support of family and potentially friends,” said LaPointe, who is also her local union council president. “Knowing that I’ll get paid eventually is good. There is a light there so it’s just making it through in the short term. But the uncertainty is a concern.”
If a shutdown were to last through the end of the year, that could be enough to tip the U.S. into a recession, said Mark Zandi, chief economist at Moody’s Analytics.
“A couple weeks, no big deal. A month, then it starts showing up with the economic data. Longer than that, it becomes a real problem and if it’s for the entire quarter, buckle in, it probably means a recession,” said Zandi.
While Washington has been through shutdowns before, this one could have a significantly bigger impact because it will involve far more workers than the last shutdown, said Max Stier, head of the nonprofit Partnership for Public Service. Congress hasn’t approved funding for any parts of the government nor has it passed legislation to continue paying members of the military.
In addition to the 4 million federal workers who wouldn’t get paid during a potential shutdown next month, millions more who work as contractors would also see their pay disrupted and could be laid off, Stier said. Then there will be the ripple effect on businesses dependent on the sending of those federal workers and contractors. And unlike full-time federal workers, contractors often do not receive back pay after a shutdown ends.
A stop in pay for members of the military would put enormous stress on military families who are often already living paycheck to paycheck, said retired Air Force Lt. Gen. Brian Kelly, who is now president of the Military Officers Association of America. He said his organization has been hearing growing concerns from its members about the impact of a shutdown.
“They sacrifice a lot with deployments and maybe combat and a variety of things, and they’re happy to do that. But in return they hope the system provides the same commitment and same sacrifice back to them,” said Kelly. “When they don’t see that, boy, that certainly undermines a lot of things.”
Across the country, food banks are starting to prepare for an influx of federal workers seeking assistance. Capital Area Food Bank, which serves residents of Washington, D.C., and the neighboring suburbs in Maryland and Virginia, estimates 100,000 federal workers in the area could struggle to be able to afford food during a shutdown given their incomes and the high cost of living in the Washington region, said the organization’s CEO, Radha Muthiah.
During the last shutdown, the food bank handed out food boxes to around 4,000 households a week at temporary locations in grocery store parking lots specifically for federal workers. They also saw an increase in demand at the food banks they partner with in the area. A shutdown would come as the organization is already seeing demand well above pre-pandemic levels.
“It is coming at a very challenging economic and financial time for most families,” said Muthiah. “A shutdown would put an incredible strain on a network that has already been in overdrive for three years of the pandemic.”
Federal food assistance through the Supplemental Nutrition Assistance Program, formerly referred to as food stamps, will be paid to recipients for the month of October, according to an Agriculture Department spokesperson. But it is unclear what would happen longer term with benefits if the shutdown goes past a month, something that could put even more strain on food banks.
“In our area, there are 330,000 food stamp recipients. If they don’t get their allocation for an entire month, there’s no way that we as a supplementary food provider could meet that need,” said Muthiah. “If that program were turned off for a month it would just be impossible.”
At the Federal Emergency Management Agency, union president Steve Reaves said he worries about morale among his colleagues who are already under strain from responding to a growing number of weather-related events. During the last shutdown, he had to tap into his retirement savings to pay his mortgage.