'We'll never see that money back' -- how small business owners can recover from the shutdown

Small businesses are suffering from the partial government shutdown, but unlike most furloughed federal workers, they won’t get back any lost income when this ends.

Bump ‘n Grind, a cafe located just a few blocks away from the National Oceanic and Atmospheric Administration office in Silver Spring, Md., has seen a 20% drop in revenue this past month, said the owner, David Fogel. Typically, about 15 to 20 NOAA employees stop by the shop every day, but the shutdown has furloughed them. “The federal workers thankfully are going to get money back,” Fogel said, “but for myself and my small business, we’ll never see that money back.”

Government contractors won’t receive back pay, and local businesses won’t easily make up those losses. “When you stop paying almost a million people for a month, it will have a domino and rippling effect in the economy,” said Aaron Klein, a fellow in economic studies at Brookings Institution, a Washington, D.C.-based nonprofit public policy group. There won’t be a big bounce back either, he added. “You’re not going to eat twice as many lunches in February because you didn’t eat out in January,” he said. “You won’t get two hair cuts. So many of these small businesses, they won’t recover from their slow January.”

About 800,000 government employees are not being paid — more than half of whom are still expected to report to work. Thousands more Americans are contractors with the federal government whose jobs have been halted. And then there are the small businesses, including restaurants, cafes, clothing stores and car mechanics, that are hurting because government workers are cutting back on spending as they prepare to miss their second paycheck of the year. “It’s not just government employees being affected, but all of the businesses that support them and they support by shopping,” said Angie O’Grady, partner and chief operating officer of StellaPop, a Reston, Va.-based management and creative consulting firm.

More at https://www.marketwatch.com/story/well-never-see-that-money-back-how-small-business-owners-can-recover-from-the-shutdown-2019-01-25