TALLAHASSEE, Fla. (WTXL) — Experts expect the economy to recover quickly following the end of the longest government shutdown in U.S. history on Wednesday. But the recovery also rests on some Tallahassee businesses that say their sales were impacted.
- The government shutdown left thousands of federal workers and SNAP recipients without benefits, leading to an estimated $11 billion of permanent economic loss, according to the Congressional Budget Office.
- However, Florida State University Professor of Economics Randall Holcombe says the economy will recover quickly once federal workers start spending their back pay.
- Watch the video below to learn what local recovery looks like to businesses in Tallahassee.
BROADCAST TRANSCRIPT:
The government shutdown left in thousands of federal workers unpaid and SNAP recipients without benefits.
Now that it’s over.
The question is: What’s the impact to the economy?
Well, not much, according to Florida State University Professor of Economics Randall Holcombe.
“I think the economy will recover pretty quickly. I mean, actually, the economy as a whole wasn't affected that much,” he said.
Data released from the Congressional Budget Office shows the shutdown is leaving behind an estimated $11 billion in permanent economic damage due to a slowdown in goods and services.
Holcombe expects the economy to quickly recover once federal workers spend their back pay.
However, most dollar impact would be seen in individual households.
“When people get their back pay, they're going to spend that money pretty quickly, and you know, partly it might be they might have had to borrow money or put off some expenditures in the past, and so that money is going to come right back into the economy,” Holcombe said.
ABC 27 talked to Joe Rojas, a union advocate for AFGE, one of the largest unions for federal workers.
He says going weeks without pay during the shutdown forced workers to rely on food pantries, pick up side jobs, and prioritize the bills they could afford to pay.
“Finances is like the major part. When you're forced to work, you're mandated to work 40 to 48 hours a week… and so when you're putting all those hours and then you can't put food on your plate, it is extremely stressful,” Rojas said.
Less shopping meant less revenue for local Tallahassee stores like Community Co-Op Market.
General Manager Rene Deschene says most of their customers have lower incomes.
“As far as SNAP dollars go, we noticed an 18% decline in October of SNAP spending, and so far in November, it's been a 51% decline in SNAP spending,” he said.
That’s about $900 dollars in sales made with food stamps so far this month.
Compared to an average month, Deschene says that amount is supposed to be about $2,200 as of now.
“It's probably more of a permanent loss. Once that food isn't purchased, it's not going to be purchased,” Deschene said.
As for their recovery, Deschene says it’s a waiting game.
“It’s just, you know, waiting for those SNAP dollars to get back into the people's accounts so that they can come back and start spending again,” he said.
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