Shutdown impacts on financial institutions and their clients
Some areas of the country feel government shutdowns more acutely than others.
While California, Virginia, and the District of Columbia employ the most federal workers in raw numbers, other states have a higher concentration of their workforce in federal jobs. According to the economics and public policy firm Scioto Analysis, the District of Columbia, Maryland, and Hawaii have the highest number of federal employees per 1,000 workers.
California, Virginia, and Texas host the largest numbers of active-duty military personnel, according to the Defense Manpower Data Center data cited by Visual Capitalist.
Together, these factors mean that entire communities, especially those with military bases, federal facilities, or federally funded tourism, can see significant ripple effects when government paychecks are at risk or stop.
America’s Credit Unions reports that roughly two million federal civilian workers and millions of contractors face uncertainty during a shutdown, with some furloughed and others working without pay until Congress acts. The Government Employee Fair Treatment Act of 2019 guarantees retroactive pay, but workers still face immediate challenges covering daily expenses.
Local economies that depend on federal programs or tourism at national parks and public lands are also affected. In 2013, 401 national parks closed, costing communities $414 million in visitor spending, according to America’s Credit Unions.
In addition, farmers have faced delays in U.S. Department of Agriculture services or support. And lenders offering some government-backed loans have run into processing roadblocks with the shutdown, delaying approvals for applicants of U.S. Small Business Administration loans and some agricultural loans.
Even when states step in to fund temporary operations, the strain on local businesses and workers is real. And it extends to their credit unions and community banks.
