Please contact an Enrollment Representative for application deadline information

The Government Shutdown’s Impact on Business

When pundits and politicians dissect the government shutdown, the first topic of discussion is often the economic impact. The shutdown of 2013, which is the 18th shutdown since the 1970s, raises questions about the United States’ ability to create a budget that actually works for the American people. This uncertainty has undoubtedly affected the nation’s businesses, but to what extent? For engineering firm URS Corporation, who was forced to lay off about 3,000 employees, the effects of the shutdown were adverse and immediate. For Walmart, on the other hand, the shutdown led to an initial decline in sales, but with many commissaries closed, revenue was predicted to remain stable over time.

For some companies, like Black and Decker, the financial impact was “modest” at its worst. David Zarin, who owns Zarin Fabrics in New York, merely complained of “Washington Posturing” during a time of steady business growth. However, other industries were not so lucky, and many Americans have been left feeling less optimistic. According to a recent CNN poll, 71% of Americans surveyed described the current economic situation as poor and 59% said the poor conditions would continue for at least another year.

This most recent government shutdown was only a partial shutdown, lasting a couple of weeks. If the shutdown had been prolonged, then the economic impact would have been far more damaging. Merril Lynch economists predicted that a month-long shutdown would have slowed the GDP growth rate nearly 2%, and that’s for a fourth quarter expected to grow 2.6%.

If the American government cannot find a suitable way to fund itself, then how can American businesses? This is another question that company leaders face in an era of economic doubt that has become almost epidemic. According to Standard & Poor’s estimates, the most recent shutdown has cost the nation’s economy $24 billion. Workers were laid off, companies lost money, and depending on the industry, the government shutdown suggested a significant loss of productivity. Real estate agents lost home sales due to closed mortgage providers, hotels lost out on tourists seeing national monuments, and federal employees were furloughed without compensation.

While there are differing opinions about the severity of the shutdown’s global effects, the consensus is that a default could be potentially disastrous to the world economy. If the United States government defaults on its debt, Komal Sri-Kumar, President of global consultancy Sri-Kumar Global Strategies, predicts that “global growth [will] come to a halt.”

With the shutdown over, it is now up to business leaders and entrepreneurs to boost their productivity levels again and think about reaching their company’s goals without focusing on the government’s uncertain economic future. Busy professionals should seek online MBA programs that allow them to continue working, while providing them with the tools and training they need to navigate the volatile global marketplace. The University of Northwestern Ohio offers a completely online MBA program that is affordable, flexible, and gives students the opportunity to expand their business expertise.

Share this post:
FacebookTwitterGoogle+EmailLinkedIn