Government Shutdown Could Cost Worcester County $3 Million A Week

Wednesday, October 02, 2013

Paige Pihl Buckley, GoLocalWorcester Contributor

Blackstone River and Canal Heritage State Park. All national parks will remain closed during the shutdown.

While the politicians who caused Monday night’s government shutdown continue to receive their paychecks, Worcester County stands to lose up to $3 million per week in lost wages and revenue.

Economics experts estimate that nearly 3,000 people in Worcester County are employed by the federal government and work in 115 different offices countywide. Nearly a quarter of those workers could be sent home, without pay, on furloughs during the government’s shutdown, said Bryan Engelhardt, an assistant professor of economics at the College of the Holy Cross.

“To put it differently, each week the shutdown continues, it means our economy will lose roughly $1 million dollars in income to these workers alone. The effects on these workers are obviously important as they are unsure about their future and must consider cutting back on expenses to make up for the lost pay,” he said. “The decisions of federal employees to cut back will have an immediate effect on retailers and other business. The total lost income across Worcester County could go as high as $3 million per week if the shutdown continues for an extended period."

Dr. Thomas Gottschang, also a professor of economics at the College of the Holy Cross agreed.

Less Wages Mean Less Spending

“Businesses that normally would get customers who are visiting national parks and federal offices that are closed will also see reduced revenues,” Dr. Gottschang said. “In the short run this will probably not have a very big impact on Massachusetts, but if the shutdown continues it will reduce the rate of the economy's recovery and increase unemployment.”

The immediate consequences for nonessential federal employees and those who work with them will be palpable, but for the majority of residents the short terms costs will be less harsh.

“In the short term, the effect is what I call the annoyance factor,” said Chris Geehern, Executive Vice President of Marketing and Affairs at Associated Industries of Massachusetts.

Federal programs like the E-Verify system, which allows employers to check the work eligibility of potential hires, are now offline, said Geehern, slowing the hiring process for hundreds of people seeking jobs. If the shutdown is resolved quickly, hiring will only be briefly delayed; but if it continues, systems like E-Verify remaining offline could present a more serious problem.

“It’s not an immediate catastrophe for employers, but underscores the nagging sense of insecurity about where things will go next week,” Geehern said of the pending political battle about whether to raise the debt ceiling. In 2011, national financial markets plummeted as the government fought about this very issue.

Major Problems Down The Road

The U.S. Senate refused to pass a budget that included an amendment that would delay Obamacare for one year.

“Most residents of the state won’t notice in the short term but if this goes on for several weeks the impact will broaden,” said Michael Widmer, President of the Massachusetts Taxpayers Foundation. “It will cause a further slowdown in the Massachusetts economy.”

The Bay State’s economy, Widmer cautioned, has already been trailing the rest of the nation in its recovery from recession over the last six months, and has not added any jobs this year.

“This may bring further caution on the part of businesses in terms of hiring,” he said, “It depends entirely on how long this lasts.”

In addition to slow hiring and lost revenue concerns, many have expressed fears that federally funded programs will be forced to close their doors. For now though, that seems unlikely.

A representative from HeadStart in Worcester said that, although she doesn’t know what will happen in the coming weeks, for now she has been assured that “our program will continue to provide services to children and families at this time, and that payroll will not be affected. At this point, I’ve been assured that our doors will stay open.”

Politics As Usual

Political science professor Dr. David Schaefer of the College of the Holy Cross thinks that for now the consequences will be largely political.

“Both parties are thinking ahead to the 2014 Congressional elections, and much will depend on their respective efforts to guide the media portrayal of these budget showdowns,” he said. “In the short term, however, except for groups like those who unfortunately find they have to cancel or cut short vacation trips to America's national parks, I do not believe that a brief partial shutdown is going to have a major impact on most people's well being.”

For their part, the Republican Party is standing their ground, painting the shutdown as a bold statement against an unwanted, unconstitutional law.

"The Massachusetts Republican Party stands with the taxpayers and voters of Massachusetts in opposing Obamacare and a government shutdown. We encourage concerned Massachusetts citizens to call on Senator Warren and Senator Markey to compromise, lead and keep our government running,“ said Rob Cunningham, the Executive Director of the Massachusetts Republican Party.

"This shutdown is only the most recent evidence of the dysfunctional situation in Washington D.C. It’s being driven by an extreme portion of the Republican party who is willing to sacrifice important programs and services that people depend on to make a partisan political ploy," said John Walsh, Chair of the Massachusetts Democratic Party. "Real people in our country are going to suffer in order to have one party make a political statement. It’s a real unfortunate situation and it’s not making our country stronger."

“It’s a shame that compromise has become such a bad and dirty word these days. It’s sad that it’s come to this, “ said Stuart Loosemore at the Worcester Chamber of Commerce. “I can Skype with my friends who live across the world. We have technology that allows us to do all these things, and we’ve come so far in some ways but we haven’t in other ways. The longer this goes on, the more it’s going to hurt people.”

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Government Shutdown Could Cost Worcester County $3 Million A Week

Less Wages Mean Less Spending

Major Problems Down The Road

Politics As Usual

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