Good news is that the politically motivated federal government shutdown lasted just three days. What, however, would be the state-specific impact if a longer-term shutdown were to occur? Which states are most vulnerable? The answer depends on what are included.
There would be no doubt unequal impact across states. To address the severity of impact, WalletHub examined the following metrics, with the respective points weighting included:
- Percent of Each State’s (and the District of Columbia) Jobs that are Federal Government – 25 points
- Federal Contract Dollars Per Capita – 25 points
- Percent of Children Covered by Children’s Health Insurance Program (CHIP) – 25 points
- Small Business Lending (average SBA 7a loan size and percent of small businesses receiving such loans) – 5 points
- Real Estate as a Percentage of Gross State Product (impact from curtailed residential lending due to staffing issues at IRS, FHA and VA) – 25 points
- Access to National Parks (number and acres of national parks per capita) – 25 points
Each metric was scored using a 100-point scale, with 100 representing the largest impact from a government and zero the least. A weighted average of all the metrics was then calculated to create the final overall score.
Where would be the largest and also smallest impact of an extended U.S. Government shutdown based on WalletHub’s methodology? The top and bottom 10 are shown in the following tables. Not surprisingly, Washington, D.C. is the most impacted, followed by nearby Maryland and Virginia. Other states highly impacted are heavily influenced by defense spending and related industries. The same goes with national parks and federal public lands.
Consider the following on federal employment in select states. Overall, federal employment makes up 1.9 percent of the U.S. workforce. In the District of Columbia (the state with the greatest percentage of federal workers), it is 24.8 percent (one out of every four jobs). At the other end of the scale is Connecticut at 1.1 percent (one-out-of-every 100 jobs) and Wisconsin at 0.98 percent (not quite one –out-of-every 100 jobs).
The next table shows the ranks for all 50-states and the District of Columbia.
To read the entire report including a ranking of all 50 states and the District of Columbia click https://wallethub.com/edu/government-shutdown-report/1111/
Why report this research at all given the shutdown lasted just three days? Given the political rancor ongoing today, I would not be at all surprised this happens again. But next time for a much longer duration.