A report from the White House’s Council of Economic Advisers estimates Michigan’s Gross State Product will decline by around $361 million each week of the shutdown.
WASHINGTON — An October White House report projects that Michigan’s Gross State Product has declined by about $1.8 billion since the beginning of the federal government shutdown.
The White House Council of Economic Advisors (CEA) shared the projections for individual states, highlighting the impacts of a federal government shutdown on the state’s economy, federal benefit programs and small businesses.
The CEA estimated a decline in Michigan’s Gross State Product by around $361 million per week, or $1.6 billion per month while the government is shut down. With the shutdown now nearing its sixth week, making it the longest federal government shutdown in American history, CEA estimates project a $1.805 billion decline in the gross state product.
The impact of the government shutdown on the state’s gross product could also impact workers in the state, the CEA predicts. Their analysis found a potential increase in unemployment of about 1,300 workers in the state under a shutdown that lasts a month.
The CEA goes on to share that around 56,000 federal workers in the state are either furloughed or working without pay, they say that equates to about 1.3% of the state’s workforce.
Impacts to federal benefits are currently being felt with over 1.4 million Michiganders seeing disruptions in their Supplemental Nutrition Assistance Program (SNAP) benefits. The program was paused beginning in November due to the government shutdown, but later a judge ordered that the Trump administration distribute November’s full monthly SNAP food benefits. Now, the administration is asking a federal appeals court to block that order.
The CEA also says that there will likely be delays for Social Security benefit recipients who receive their money by check instead of direct deposit. They estimate that there are about 10,600 seniors who receive their benefits by check in Michigan.
The Women, Infants, and Children (WIC) program — which provides nutritional support to low-income pregnant women, new mothers, infants and children up to the age of five — is also directly affected by the government shutdown, the CEA says. It is estimated by the CEA that about 189,000 people rely on WIC in Michigan.
Impacts on small businesses are also highlighted in the report by the CEA. The government shutdown freezes all Small Business Administration loan discursions, which the CEA estimates will impact about $92 million in disbursements for small businesses in Michigan under a month-long shutdown.
The government shutdown also impacts federal contracts, which can affect small businesses with certain types of contracts with the government. The CEA estimates those impacts at about $237 million a month in federal contract cuts to businesses in the state.
The CEA said the impacts to small businesses, combined with federal employees going unpaid, could see a decline in consumer spending in Michigan by an estimated $563 million each month the federal government is shut down.