Government shutdown and its impact
The partial government shutdown occurred after Congress rejected Trump administration’s 2019 spending bill; the bill includes $5.7 billion budget to build a wall on the border of U.S. and Mexico.
The government has been shut down for 13 days, and the shutdown is likely to continue indefinitely.
As a result, nearly 400,000 federal employees are furloughed while some are working without pay.
This alone, according to experts, can slow down the U.S. economy.
“While a shutdown affects the economy in a number of ways […], a primary channel through which a shutdown affects the economy is through withheld or foregone pay from federal employees who don’t receive their paychecks,”reported Fast Company.
According to Constantine Yannelis, a business professor at New York University, 70% of economic activity relies on consumer spending and withholding pay from government employees will create a “speed bump” in the U.S. economy.
Government employees, however, are not the only ones affected by the shutdown; workforce in the real estate industry is also experiencing the ramifications of the shutdown.
IRS income tax transcripts are required by most banks before they can approve mortgage loans. With IRS being one of the government agencies affected by the shutdown, transcripts remain unsent.
Thus, many real estate agents who work solely on commission are unable to close sales.
In addition, many low-income families and their children could lose access to nutrition.
The Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) supports millions of low-income women and their children with food, infant formula, prenatal programs, and immunizations.
According to CNN, while the program has been providing assistance during the shutdown, babies and young children could lose access to food and other health services if the shutdown continues.