By any measure, the shutdown is already causing wide-ranging damage. Businesses must consider whether to go ahead with initial public offerings without approval by regulators, The Wall Street Journal reported this week. Tax refunds could be delayed as IRS employees are allowed to miss work because of financial hardship. Stores around the country have lost revenue because they can’t accept food-stamp payments; as PBS explained last week, about 2,500 retailers have seen a lapse in their authorization to accept payment by debit-style EBT cards.
Read: The wheels of justice are grinding to a halt
Most visibly for the broader public, the TSA “sick-out” results in closed security lines and airport delays. Absentee rates hit a high of 10 percent on Sunday, about three times as high as the typical level at this point last year. The agency has sent out a renewed plea for agents willing to temporarily shift to another city to reinforce the most strained airports, CNN reported. The shutdown’s lost productivity and ripple effects reduce economic growth by 0.13 percent each week, according to President Donald Trump’s own economists. Since Congress has already promised back pay to federal employees (but not contractors) regardless of whether they have to work during the shutdown, that amounts to $8 million to $12 million every hour in pay for work not done, PolitiFact calculated. But the impact has not yet inflicted serious pain on the broader public. A slightly longer TSA line isn’t comparable to hundreds of canceled flights or, worse, a deadly mishap.
Read: Waiting for a shutdown to end in disaster
Humans tend to ignore gradual changes, like the proverbial frog in a pot of slowly heated water (see: climate change, national debt, online privacy). With the president and House Democratic leaders dug into mutually exclusive positions, slow pain hasn’t yet changed the political calculus. However, the second round of missed payments means a rising tide of senseless struggle.
A Department of Homeland Security employee who lives in Northern Virginia says the prospect of a full month without pay forced her and her husband, another civilian federal worker, to apply for unemployment benefits, food stamps, and free school lunches for their two children. “The next missed paycheck will be a game-changer for us,” she said in an email Tuesday. “If the government opened last week, we would not have applied for assistance.” The family was low on cash savings because they had recently renovated their basement so her disabled mother could live with them. Both of their kids have special needs and receive private therapy outside of school, but tight finances forced the family to decide which child could skip that therapy during the shutdown.
A second missed paycheck doesn’t just double the hardship imposed by a single skipped payday. Marty Reid, a certified financial planner in Charlotte, North Carolina, said that while people should keep an emergency fund with enough cash to cover at least three months of essential expenses, most families don’t have that level of reserves, even if they’re not typically living paycheck to paycheck. “Even with households that have higher incomes, oftentimes they simply don’t have the cash reserve that they should,” he said. The publicity surrounding the shutdown means creditors are likely to allow postponed payments for mortgages or auto loans. A typical family may struggle with more than a single missed paycheck, tapping into retirement savings—but that means they lose out on long-term growth and risk taxes as high as 50 percent on withdrawals, Reid warned. He added that the shutdown’s timing could accelerate interest penalties for families who put holiday purchases on their credit cards.