By Jamie Smith Hopkins, The Baltimore Sun
October 6, 2013
At least 100 federal workers usually crowd the Salsa Grill in Woodlawn for lunch. By Friday, the fourth day of the partial federal government shutdown, their numbers dwindled to three.
The Peruvian eatery — across from the Social Security Administration and near the Centers for Medicare & Medicaid Services — counts on those agencies for about half its customers.
"The restaurant business, it's small margins, and this is not going to help me at all," said Jay Angle, the owner and chef. "I'd love them to go back to work."
The federal government intertwines with Maryland businesses in many ways, which means many Maryland businesses feel the pinch when the D.C. machinery comes to a halt. President Barack Obama chose a Rockville construction firm as the backdrop for his speech Thursday about the shutdown's economic effects.
Some companies measure the impact in disruption and uncertainty. Others already are taking a bottom-line hit, either because they're government contractors or because they rely on the federal workers now going without pay.
A U.S. Chamber of Commerce-led coalition of about 250 business groups urged Congress on the eve of the shutdown to fund the government, saying normal operations were critical "with the U.S. economy continuing to underperform."
In Maryland, anxiety is particularly high.
If you add together the more than 320,000 Marylanders who work directly for Uncle Sam, the massive federal contracting base and the ripple effect of paychecks spent at stores, restaurants and other businesses, "more than a third of all economic activity in Maryland is directly or indirectly related to federal spending," said Richard Clinch, a locally based research economist at Battelle Memorial Institute.
"The longer this goes on, the deeper the impact," Clinch said. "Two weeks, you start talking about serious hurt."
The biggest, most immediate impact of the shutdown is on the furloughed federal employees — about 800,000 nationwide, or more than half the government's civilian workforce. The number furloughed in Maryland remain unclear, but it appears to be in the tens of thousands.
Even agencies with substantial functions required to continue during a shutdown are missing a chunk of their workforce.
Social Security, which employs 11,000 in Woodlawn and will keep sending out seniors' checks, is down to about 4,360 workers.
The Centers for Medicare & Medicaid Services said nearly two-thirds of its nationwide workforce was furloughed. It employs close to 2,800 in Woodlawn, according to the state Department of Business and Economic Development.
The Department of Defense hasn't said how much of its Maryland workforce it furloughed, but if it's half of all civilians — like the nationwide number — that would come to more than 20,000 people. The last-minute bill passed to ensure that military workers continue to get paid includes at least some civilians, but political leaders are arguing over just how many.
Outside of the Defense Department, furloughed workers and even many workers exempted from the temporary ax are going without pay — everyone whose wages come from annual appropriations rather than separate funding streams.
Exempted employees will get back pay once the shutdown ends. Saturday, the House of Representatives approved a bipartisan bill to provide back pay to the furloughed federal employees when the government shutdown ends.
Furloughed workers also qualify for unemployment checks. Over 13,000 filed for the help in Maryland as of Friday morning, more than four times the number of federal-worker applicants the state generally sees in an entire year.
Then there are the contractors. Maryland is awash in them, from one-person shops to some of the state's biggest private employers. Falls Church, Va.-based Northrop Grumman has about 10,000 workers in Maryland. Bethesda-based Lockheed Martin employs about 7,500 in the state.
The effect on such companies — and their employees — varies by contract. Is it funded with last fiscal year's money? Can the work even be performed, or does it require access to a closed site?
Northrop Grumman declined to comment on the shutdown and wouldn't say whether any of its workers have been sent home without pay. Lockheed Martin said Friday that it would furlough 3,000 workers beginning Monday — it didn't specify how many in Maryland — and warned that the number likely would increase weekly if the shutdown continues.
"In an effort to minimize the impact … we are directing affected employees to use available vacation time so they can continue to receive their pay and benefits," said Lockheed CEO Marillyn A. Hewson in a statement. "We hope that Congress and the Administration are able to resolve this situation as soon as possible."
Because of the shutdown, Kensington-based John Shorb Landscaping got a stop-work order on a contract to manage the landscapes of federal properties in D.C. and Maryland. It laid off 28 of the 32 employees whose jobs are connected to that contract.
"We're not allowed to work," said John W. Shorb, the company's president. "We also got a stop-work order for a contract we just received … for the National Arboretum."
But for some, the past week has been almost business as usual. Michael S. Rogers, CEO of Baltimore-based Securityhunter, a 15-employee federal contractor that provides security systems including video cameras and bulletproof barriers, said his staff has been able to continue working on most of the company's projects because they're deemed essential.
The Maryland Zoo in Baltimore is even getting a bit of a boost as Washington-area school groups that booked field trips to the now closed National Zoo look for alternatives. About a dozen called and several have visited.
But for many, the impact is bad, not good.
Raymond Lowder, 66, who runs his one-man concession business in the Centers for Medicare & Medicaid Services, said sales are normally low because he's stuck in an area without much foot traffic. Now they're tiny. He didn't even manage to hit the $50 mark on Tuesday, the shutdown's first day.
The Baltimore man said he barely managed as it was, and a health emergency in August put him further behind. Now this.
"It's 'Can we kick you in the back just one more time?' " he said.
Ronza Othman, who works at the Centers for Medicare and Medicaid Services, said she worries about Lowder's situation. Hers, too. She's furloughed from her job as an attorney in the agency's civil rights office, and because her paycheck covers her rent, her "tremendous" student loans and her parents' mortgage back in Chicago, she doesn't have a lot saved up.
She can't accept outside work without giving the agency's ethics office 45 days' notice, and anyway, that office also was hit by furloughs. She applied for unemployment, but those payments won't stretch far enough.
That means cutting back wherever possible, and that's where her personal misfortune ripples into the larger economy. No new cellphone. No more daily trip to a mom-and-pop coffee shop before catching the bus to work.
"I said, 'I'm one of those furloughed feds — this is going to be my last cup of coffee for a while,' " she told the staff on Tuesday.
Across the street from Fort Meade, where normally more than 50,000 people work, small-business owners wait to see what sort of hit they might have to absorb.
Ali Mamdouhi's Seven Oaks Cleaners got more business at first as temporarily out-of-work civilians ran needed errands, but he's already seeing a reversal.
"We usually dry-clean a lot of professional attire," he said. "With professionals not working, they'd have less of a need."
Veronica Scales, who owns Hair on You Salon & Spa in the same shopping center, said business has been rough since the recession — so rough she had to sell her house and rent. This past week, fewer customers made appointments and several who work for the federal government called to cancel, she said.
The last two shutdowns, nearly back-to-back in late 1995 and early 1996, stretched on for nearly 30 days in total.
"I hope it doesn't last that long this time," Scales said.
Angle's Salsa Grill was still young during those shutdowns. This time, he's not waiting around for Congress to stop arguing.
He's ordering less food for the smaller lunch crowd. He's trying to branch out into breakfast, perhaps in the coming week, in a bid to get more customers in the door.
What he'd really like, of course, is for his regulars to get back to work across the street. But that's something he can't order up.
"Wish we could," he said.
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