Gov’t contractors hit by shutdown might never see a paycheck
Although federal employees are back on the jobended last week, contract workers serving a range of U.S. government agencies may never see a paycheck.
More than 1 million federal contractors are unlikely to get back pay because they aren’t legally guaranteed reimbursement for missed time at work during the 35-day shutdown, according to experts and published reports. The lowest-paid of these workers typically earn $450 to $650 a week, the Washington Post reports.
It’s not just service employees like janitors, cooks and service workers who are feeling the strain. Kevin Doyle, an encryption specialist at Laughlin Air Force Base on the Texas-Mexico border and a father of three, told the Associated Press he’s out $5,000 because of the record-long shutdown, alluding to the anxiety of watching bills pile up.
Doyle isn’t taking any chances. He starts a new job Friday with another company that he hopes will be more stable if talks between the Trump administration and congressional leaders fail, potentially leading to another shutdown next month.
“We were scraping pennies and nickels together one day to get the baby a Happy Meal,” Doyle, 40, told the AP. “It’s just that bad.”
The federal government includes roughly 4 million contract workers, according to a 2017 report by Paul Light, a New York University professor of public service. That figure is down from 4.3 million in 2010; another 1.6 million depend on federal grants for their livelihood, according to the study.
Light estimates about 1.2 million contractors. as well as those who rely on federal grants for work, were affected by the partial shutdown.
The shutdown delayed $18 billion in federal discretionary spending, according to a Congressional Budget Office report released this week. The stalemate reduced economic growth in the first quarter by $8 billion, or 0.2 percent, the agency found.
Most of that is expected to be recovered as the year goes on, although CBO estimates that about $3 billion in GDP will permanently be lost. The legislation that funded the government signed by President Donald Trump funds the government through Feb. 15.
Another shutdown would hurt more
Another shutdown would “create an even greater economic effect than the 35-day shutdown,” Light told CBS MoneyWatch in an email. “We know that the economic effect is due to a slowdown in spending due to worries about the future. A second shutdown in such short order would remind workers that this is a long-haul event that could return in September, giving them ample reason to clamp down on all discretionary spending through the summer and into the early fall.”
That would likely hit tourism, travel, consumer goods, and other discretionary sectors of the economy, with Light warning that it could hit consumer spending through the 2020 election.
“Even the hint of a shutdown right now could reduce activity,” Light said.
Some government contractors, unable to get timetables or a paycheck for ongoing work in industries like construction,workers in December and January.
A bill introduced by House Democrats earlier this month would grant back pay to contractors in retail, food, custodial or security services in any future shutdowns. A similar bill introduced in the Senate by Minnesota Senator Tina Smith has yet to attract any Republican backers, Vox reported.
— The Associated Press contributed to this report