On Saturday, Dec. 22, 2018, the federal government came to a stand-still. Well, partially.
After failing to come to an agreement regarding President Donald Trump’s request for over $5 billion to fund a border wall along the U.S. and Mexico border, both the House Democrats, Senate Republicans and Trump left negotiations with no deal. As of the morning of Jan. 23, the shutdown persists.
Nationally, 800,000 federal employees have gone without a paycheck for weeks. Employees of the Transportation Security Administration have called out sick or refused to appear, causing long lines and disruptions at airports and forcing food banks to cater to the out-of-work employees who have begun resorting to savings and credit cards to pay bills.
Locally, the most impacted employees work in the leisure and hospitality sector, says Matthew Fienup, executive director of the Center of Economic Research and Forecasting at California Lutheran University.
“My intuition is that the economic impact is relatively minor,” said Fienup. “When you think about the Ventura County economy, about 25 percent of economic output is durable and non-durable manufacturing, we have very little food handling and other areas that might be impacted by government inspectors being off work, and then we have a large defense sector but that’s fully funded.”
Fienup says that even though the impact might not be apparent, he finds it compelling to discuss the economic hardship families of federal employees might be undertaking.
“You might see it in the adventure travel industry, might see it among the National Park Service employees who missed a paycheck,” said Fienup. “I have no doubt there’s a compelling story there.”
Cherryl Connally, co-owner of Island Packers at the Ventura Harbor, says “we’re doing just fine” and that over the past 50 years, her business has weathered several government shutdowns.
“It has not affected our business, it’s generally slow in January anyway, but we keep emphasizing that we’re open so people don’t forget,” said Connally. “People think the parks are closed.”
During the first few weeks of the shutdown, Island Packers cleaned the bathrooms at both Scorpion Anchorage and Prisoners Harbor on Santa Cruz Island and on Anacapa Island, but Connally says that now park services are handling the bathrooms and that Island Packers has partnered with Channel Islands Adventure Company to keep the facilities clean as well.
With the shutdown continuing with no end in sight, however, locales that rely on tourism dollars across the country are signaling trouble. Funding for the Interior Department, which oversees the National Park Service, has lapsed, forcing closure of national parks in our own backyard, including Joshua Tree National Park, which closed after reports of widespread damage to the park’s namesake trees.
Even closer, 80 percent of Los Padres National Forest employees are furloughed, while the rest work without pay to maintain cleanliness and act as minimal law and fire enforcement, according to a report by KEYT in early January.
Connally, however, maintains a positive outlook.
“Everything’s fine, business is OK, weather is always an issue this time of year. Fortunately it’s whale watching season right now,” said Connally. “No one’s fighting over campgrounds, everyone is working together well.”
Miguel Delgado Helleseter, Ph.D., director of the Institute for Global Economic Research at California State University, Channel Islands, says that the real toll on Ventura County is hard to know beyond anecdotal evidence.
“In general, with publicly available statistics, the flow of information is fairly slow, so it could be months before we can actually observe any effects by looking at publicly available data,” said Helleseter.
Helleseter says that about 4 percent of the Oxnard-Ventura metro area’s GDP is generated by federal civilian and military sectors, but considering that the shutdown is partial and not complete, the effect on goods and services “will probably be small,” depending on how long the shutdown lasts, adding that approximately 45,000 federal workers in the state are furloughed or working without pay and they are the ones who will be most impacted by the shutdown.
Should the shutdown continue — for months or even years, as President Donald Trump has made clear is a possibility — Helleseter says that the impacts would become more apparent, both economically and in terms of trust in the government.
“I would expect uncertainty to be one of the biggest impacts of the shutdown, both locally and nationally,” said Helleseter, adding that the shutdown may have an “erosive effect” on confidence in businesses and consumers. “One important question, both locally and nationally, is what the capacity is in the private sector to both react to and accommodate dysfunction in the government. Unfortunately dysfunction at the federal government level appears to be becoming the norm.”