Federal Workers Stretch Last Paycheck Until Shutdown Ends

Photographer: Julia Schmalz/Bloomberg

The shutdown and failure to pay workers is draining an average of $160 million a day from the $15.7 trillion economy, according to analysts in Lexington, Massachusetts, for IHS Inc., a global market-research firm. Close

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Photographer: Julia Schmalz/Bloomberg

The shutdown and failure to pay workers is draining an average of $160 million a day from the $15.7 trillion economy, according to analysts in Lexington, Massachusetts, for IHS Inc., a global market-research firm.

John DiTroia has been guiding planes through Tampa International Airport since the government shutdown began, even though he’s not getting paid and his three-year-old son was recently diagnosed with leukemia.

DiTroia, who had taken leave to be with the boy, raced back to work on Oct. 2 when he was told he might not qualify for back pay if he wasn’t at his station. His wife has already used all her paid leave to deal with family issues.

“I’m used to having two incomes,” DiTroia, 33, said. “Right now, I have zero. I’m watching every dollar that goes out.”

Today, DiTroia will be among federal workers who’ll get their last paycheck -- a partial one -- until the funding impasse between President Barack Obama and congressional Republicans that began on Oct. 1 is resolved.

For the hundreds of thousands of workers serving the U.S. government, the nation’s largest employer, payday will provide an economic reminder of Washington’s political paralysis. The average federal employee earned an annual salary of $76,353 in 2012, and the lost income is exerting a drag on the economy as well as forcing employees who live paycheck-to-paycheck to figure out how to cover their bills until the shutdown ends.

Held ‘Hostage’

“They’re holding us all hostage,” said Rosamond Harris, a U.S. Census Bureau worker, referring to Congress. “It’s unconscionable how people can sit there and play with other people’s lives.”

The shutdown and failure to pay workers is draining an average of $160 million a day from the $15.7 trillion economy, according to analysts in Lexington, Massachusetts, for IHS Inc., a global market-research firm.

The impact is particularly evident in the Washington metropolitan area. Stephen Fuller, the director of the Center for Regional Analysis at Fairfax, Virginia-based George Mason University, estimates that the loss of pay is enough to cut about $50 million a day from consumer spending in the region.

“It’s now really going to be hitting home,” said Daraius Irani, the executive director of the Regional Economic Studies Institute at Towson University outside Baltimore, Maryland. “The longer this goes on, the worse it is going to be for workers -- and for our economy.”

Retroactive Payment

The House of Representatives has passed a bill to provide retroactive pay to U.S. workers caught in the impasse, once it is resolved. The measure, which is pending in the Senate, has assured some workers that the pain will be temporary. That’s not much comfort to some.

Harris, 46, who helps run employee background checks at the census bureau, said her next paycheck will be about half the $1,031 she typically receives. The checks cover a week of work and a day before the shutdown began.

She has to decide how to pay her car loan and credit card bills, which are due next week. She has already canceled a planned check up with the doctor who treated her for cancer last year, to save the $120 it would cost her.

“They say they are going to pay you back -- but the damage is already done,” she said.

Almost two weeks into the shutdown, half of the 670,000 members of American Federation of Government Employees have been put on unpaid leave, while the other half are working without pay, J. David Cox, national president of the Washington-based union, said in a statement.

Cutting Everything

Stephen Ferrara, a Federal Aviation Administration inspector, said he’s stopped going out to dinner and cut spending on everything except necessities. He oversees two flight schools, air-taxi operators and private aviation from the Farmingdale, New York, Flight Standards Office.

“I’ve paid bills for 35 years and I’ve never had to deal with this,” Ferrara said. “It’s disconcerting.”

While some spending will resume when workers get paid, much like it does after a blizzard, small businesses such as restaurants won’t easily recover, Fuller said.

“For some of those businesses, they can’t make up sales that didn’t happen yesterday tomorrow,” he said. “There are consequences and they cascade over time the longer this continues.”

Holiday Risk

At Labyrinth Games & Puzzles in Washington’s Capitol Hill neighborhood, owner Kathleen Donohue, 43, said sales last week were about a third less than she expected, and she’s concerned that a lingering fiscal crisis could hurt holiday shopping.

“People just don’t want to spend any money,” she said. “We were hoping that when they said that federal workers would get repaid it would get better. But there are still tons of contractors who aren’t getting paid at all.”

Despite the shutdown, DiTroia, the Florida air-traffic controller, took off a day this week to be with his son when he received chemotherapy. He’s not sure he’ll get back pay for that -- or for the two hours he took off another day to take the boy to the hospital.

“I’m just upset I had to make the decision,” he said. “That should not be happening. I should be able to use my sick leave or my annual leave and be there with my son.”

To contact the reporters on this story: William Selway in Washington at wselway@bloomberg.net; Jeff Plungis in Washington at jplungis@bloomberg.net.

To contact the editor responsible for this story: Jeanne Cummings at jcummings21@bloomberg.net.

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