How a government shutdown could impact the Valley’s economy

HARLINGEN, Texas (ValleyCentral) — If Congress fails to reach a deal tonight, thousands of federal employees, both across the world and in the Rio Grande Valley, could be required to keep working without pay.

Teo Sepulveda, an economist at South Texas College, notes that federal employees comprise 10 to 15% of the Valley's labor force, with the majority residing in McAllen. He notes that local Border Patrol agents will likely be the first to feel the financial impact of a government shutdown.

However, he says it is not only federal employees who would be affected. Small businesses could also feel the impact.

"Most businesses will have about 10 to 15% of their customers slow down their typical rhythm of business for, let's say, two or three weeks,” Sepulveda says. “Which usually, in the big scheme of things, is not a big deal, but for small areas like the Valley, it is a little bit bigger."

Back in 2019, a government shutdown lasted about two weeks, the same length of time Sepulveda expects this one could last. While he considers that a mild concern, he worries about how the uncertainty could lead to economic stagnation.

Sepulveda also points out that the 2019 shutdown led to a decline in local employment that lasted for several months afterward.

As of now, the shutdown is set to begin tonight at 11 p.m. in Texas and midnight in Washington, D.C.