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How the Government Shutdown Affects Kansas City Employees

October 3, 2013

by Jeff Pinkerton

It’s day three in the government shutdown, and from the looks of things it may be a lengthy one. The shutdown will eventually be felt by most everyone in the economy if it lasts long enough, but the impact will be most directly — and most immediately — felt by federal workers who are furloughed. The furlough does not apply to all federal workers (the New York Times has a good infographic explaining which departments are most affected) but clearly, there are a lot families taking a financial hit during the shutdown. On a larger scale, it takes money out of the economy as these furloughed workers cut back on spending.

So how might Kansas City fare during the shutdown? Compared to our 11 peer metros, Kansas City ranks third in total federal employment, with 25,500 workers. That’s 2.5 percent of total employment in the region. So in terms of straight employment, we could feel the economic impact of the shutdown more than most other metros.

Federal Govt Employment by Metro

 

In Kansas City, every federal government job translates in to 1.4 jobs elsewhere. If the shutdown goes on too long we can see these job losses, even though they are temporary,  cause businesses in other sectors to cut back on their hiring.

Of course, jobs are just part of the story. The federal government is also a major consumer. All the goods and services the government buys from private businesses will be largely halted during the impasse. This will have a further ripple effect throughout the economy.

So, regardless of the politics of the situation, there is a real economic cost to the shutdown. This longer the shutdown drags on, the greater this cost will be.

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