Where Would a Government Shutdown Hit Americans Hardest?

Just hours before the impending deadline on September 30, 2023, lawmakers passed a bill that averted a government shutdown at least until November 17. This last-minute effort set forth a chain of events that ended with the historic ousting of Rep. Kevin McCarthy, R-Calif., from his position as Speaker of the House. On November 16, President Biden signed a bill extending stop-gap measures to fund the Departments of Transportation, Agriculture, Housing and Urban Development, and Veterans Affairs through January 19, 2024, and all remaining federal agencies and services until February 2, 2024, to allow Congressional legislators more time to sort out a long-term spending bill.

A government shutdown occurs when Congress doesn't authorize federal funding, leading to a suspension of federal employee duties except those deemed essential. With approximately 2.8 million federal government workers (as of March 2023), the federal government is the nation's largest employer. A government shutdown would result in a temporary loss of $5.3 billion for these employees and have financial implications that could extend beyond missing paychecks.

MoneyGeek analyzed Census Bureau data to understand the impact of a government shutdown on federal government workers by congressional district. We also used employment and wage data from the Bureau of Labor Statistics for metro areas and states to learn about the implications of a government shutdown on a broader scale.

Given their proximity to the nation's capitol, nine out of ten congressional districts with the highest percentage of federal workers are in Maryland and Virginia. The densest is Maryland's 5th district, where the federal government employs 20% of the workforce.

Note: (D) refers to the Democratic party affiliation, whereas (R) stands for the Republican party affiliation.

Represented by Rep. Matt Gaetz, — who initiated the vote against former Speaker McCarthy — Florida's 1st district is home to approximately 25,000 federal employees (7% of the local workforce). Of the seven other Republican representatives who supported the Speaker's removal, Arizona's 2nd district ranks next with 4% of its workforce in federal sectors.

MoneyGeek also examined the distribution of federal government workers and the potential impact on wages for these individuals at state and metropolitan levels.

Maryland stands at the forefront with roughly 155,000 federal government workers, making it the state that would face the most significant impact from a government shutdown. These individuals represent 6% of the local workforce, and a shutdown of just one week could mean $378 million in unearned wages. Next are Hawaii and Alaska, where 5.5% and 5% of the workforce are federal employees, respectively. A shutdown in these two states could freeze $88.7 million per week in wages.

Honing in on metropolitan areas, California, Maryland, and Washington, D.C., lead with the highest average weekly wages for federal employees, surpassing $2,500 per person. The California-Lexington Park metro area has the highest percentage of federal workers at 22%, while farther west, the Bremerton, Washington, area holds the second-highest concentration at nearly 22%. Closely following are select metro areas in Georgia and North Carolina, where federal employment exceeds 12% of local populations.

Although temporary — laws ensure retroactive payment upon resumption — the pay halt caused by a government shutdown can disrupt workers' financial stability and affect their ability to manage routine expenses or service debt. Small businesses may also experience processing delays for lending and lost profits, which can trickle down and impact workers. Here are some proactive measures to navigate this financial hiccup:

MoneyGeek utilized Quarterly Census of Employment and Wages (QCEW) reporting by the Bureau of Labor Statistics (BLS) for state and metropolitan area data to determine the areas with the largest percentages of federal government workers relative to the total local workforce and their average weekly wages. Data is from the first quarter of 2023 and considers all 50 states and 381 metropolitan areas.

For federal government employee data in U.S. congressional districts, we used the Census Bureau’s 2022 1-year American Community Survey. Our list of representatives and the 436 districts they represent came from the U.S. House of Representatives directory.

Limitations: The BLS QCEW excludes the following groups from the category of “federal government”: “elected officials in the executive or legislative branch, members of the armed forces or the Commissioned Corps of the National Oceanic and Atmospheric Administration, individuals serving on temporarily in case of fire, storm, earthquake, or other similar emergency, and individuals employed under a Federal relief program to relieve them from unemployment.”

MoneyGeek’s analysis highlights how federal employment varies widely across states, metropolitan areas and congressional districts, highlighting the varied economic risks associated with a government shutdown across different parts of the country.

Below is the complete dataset of variables we examined to determine our findings. Click through each geographic level to see data specific to that area.