Washington’s struggling economy takes another hit from the government shutdown

Washington’s Capital Area Food Bank is scrambling to meet unprecedented demand as the nation’s capital faces a perfect storm of economic challenges. The combination of the longest government shutdown in history, widespread federal worker layoffs, and recent cuts to food assistance programs has created a crisis that is stretching resources to their limits.

“The city is being hit especially hard because of the sequence of events that has occurred over the course of this year,” explained Radha Muthiah, CEO and president of the Capital Area Food Bank, which serves 400 pantries and aid organizations across the District of Columbia, northern Virginia, and two Maryland counties.

The food bank is now providing 8 million more meals than initially planned this budget year—a nearly 20% increase. Officials expect to distribute an additional 1 million meals this month alone as the shutdown continues to devastate local families.

Washington D.C.’s economy has been particularly vulnerable to these disruptions. The region has the nation’s highest concentration of federal workers—approximately 20% of its workforce—with roughly 150,000 federal employees calling the area home. By the start of next week, hundreds of thousands of federal workers nationwide will have missed at least two full paychecks.

The economic impact is reflected in D.C.’s unemployment rate, which stood at 6% in September—well above the national average of 4.3% and the highest in the nation for months. These figures don’t even account for workforce changes since the shutdown began on October 1.

Local businesses are suffering significantly from the ripple effects. The Washington Metropolitan Area Transit Authority reports weekday ridership by federal employees has dropped by about 25% compared to September levels. Restaurants, already operating on thin margins due to seasonal declines, are seeing dramatic reductions in patronage.

“We still had seats for people, which means the bars around us who get our overflow got nothing,” said Ryan Gordon, co-owner of The Queen Vic, a British pub in Northeast Washington. He estimates business has plummeted by about 50% since the shutdown began, though he considers himself fortunate to own his building and avoid rent payments.

Tracy Hadden Loh, a fellow at Brookings Metro think tank, warns of the long-term consequences: “A lot of businesses rely on higher spending in Q4 in order to have a revenue positive year.” The shutdown’s timing couldn’t be worse, disrupting the crucial October-December quarter when many establishments count on higher sales.

Beyond the immediate business impact lies a growing humanitarian crisis. The combined effect of the shutdown, reduced SNAP benefits, and federal layoffs has created new populations of people seeking assistance.

Thea Price, 37, exemplifies this new reality. She lost her job at the U.S. Institute of Peace during the wave of federal workforce reductions in March, while her husband, a government contractor, simultaneously lost his position at a museum. After depleting their savings and relying on Medicaid and SNAP benefits, Price recently visited a food pantry in Arlington, Virginia, for the first time.

With SNAP funding interrupted by the shutdown and only partial payments arriving, Price has made the difficult decision to relocate to her hometown near Seattle. “We can’t afford to stay in the area any longer and hope that something might pan out,” she explained. “We’re just in a much different place than when these things started in March.”

The political fallout is becoming evident as well. Democrat Abigail Spanberger won Virginia’s gubernatorial race on Tuesday after focusing her campaign on the Trump administration’s economic impact on the state.

At the Capital Area Food Bank warehouse, forklifts move urgently among pallets of supplies as staff prepare for special distributions targeting federal employees and contractors. While addressing immediate needs is the priority, Muthiah expressed concern about long-term implications for affected families.

“People are borrowing against their futures to be able to pay for basic necessities today,” she observed, noting that many are tapping into retirement funds and savings accounts just to survive.

Economists predict the shutdown’s effects on the regional economy will continue long after the government eventually reopens, with missed payments potentially leading to defaults on mortgages and student loans that could take years to recover from.