That figure is triple the back pay racked up in the last major government shutdown in 2013, which lasted 16 days. Wages lost by some 850,000 federal workers amounted to roughly $2 billion, according to a study from the U.S. Office of Management and Budget.
The economic impact of lost wages will extend far beyond the lives of individual workers. The fallout could dampen consumer spending, which accounts for more than two-thirds of the U.S. economy, which would spell trouble for restaurants and other small businesses. This month, the University of Michigan’s widely watched index of consumer sentiment plunged 7.7 percent, hitting its lowest point in the Trump era.
A common rule of thumb, based in part on a Congressional Research Service analysis of the 2013 government shutdown, is shutdowns shave about 0.1 percentage points off economic growth for each week that they drag on. The effect is expected to grow over time as complications compound.
At the time, the Commerce Department estimated the 16-day shutdown dragged down economic growth about 0.3 percentage points in the fourth quarter of 2013, about in line with the high end of such assumptions. Growth figures are annualized and adjusted for inflation.
Kevin Hassett, chairman of the president’s Council of Economic Advisers, has estimated the shutdown will reduce growth by about 0.1 percentage points every two weeks. On Wednesday, he told CNN that if the shutdown continued through March, “you could end up with a number very close to zero in the first quarter.”