Impact of Government Shutdown on Federal Employee Default Risk Default risk among government employees increases substantially when biweekly salary payments are disrupted by a government shutdown, with wide-ranging effects by state, age, gender, and ethnicity. Over 2.5 million federal workers are affected, including both furloughed employees who are not working and 'essential' employees working without pay, placing their financial obligations and credit risk in jeopardy across demographic groups. Default Risk Due to Non-Payment The cessation of biweekly salary payments directly exposes federal employees to increased risk of default on rent, mortgages, utilities, student loans, and other debts. Some employees report being only one or two missed paychecks away from being unable to pay for housing or other essentials, raising the possibility of eviction, repossession, or credit score deterioration. Legislation such as the Federal Employee Civil Relief Act has been introduced to temporarily guard against these risks, but the impact remains severe during shutdown periods. Number and Demographics of Employees Affected
- More than 2.5 million civilian federal employees face disruption to their biweekly pay—exclusive of federal contractors.
- About 1.3 million active-duty military personnel are also affected.
- Federal employees are slightly more male (53.8%) and 28.1% are age 55 or older.
- Racial and ethnic breakdowns show underrepresentation of Latinos (10%) and higher representation of Black workers (18.7%).
Figure 1. Federal Employees by State
Figure 2. Gender Distribution of Federal Employees
Figure 3. Age Distribution of Federal Employees State-by-State and Group-Level Impact State Total Fed. Employees Black Worker Share Hispanic/Latino Worker Share Women Age ≥ 55 Georgia 81,366 43.8% ~10% ~45% 28.1% Maryland 144,497 27.9% ~10% ~45% 28.1% Texas 130,686 24.2% ~10% ~45% 28.1% New Jersey 22,684 16.3% ~10% ~45% 28.1% Summary of Risks and Outcomes
- Government shutdowns put millions of employees at risk for missed payments, late bills, eviction, foreclosure, and repossession.
- Default risk is most severe for employees living paycheck to paycheck and those supporting families.
- Workers of color, women, and older employees are particularly exposed due to historical and wage factors.
- Longer shutdowns substantially increase default and credit risk nationwide. A prolonged shutdown with non-payment of biweekly salaries threatens the financial stability of millions of federal workers across demographic lines, with particular vulnerability by state, age, gender, and ethnicity.