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Shutdown's impact extends to contractors as well as workers

Twenty truckloads of powdered milk are sitting in a warehouse in Eau Claire.

The milk, produced at Marron Foods in Durand, was supposed to be delivered to a packaging facility in North Carolina, but that company hasn’t been paid by its largest customer — the federal government — in five weeks.

Marron Foods is already awaiting payment for the last 30 truckloads of milk it delivered to Transylvania Vocational Services in Brevard, N.C., and now the Durand operation has been forced to pay for storage of a product it had a contract to produce for TVS but could not deliver because of the partial government shutdown.

It’s an example of the shutdown’s massive trickle-down economic impact that extends far beyond the estimated 800,000 federal workers who were furloughed or forced to work without pay, such as the 10 Transportation Security Administration screeners employed at the Chippewa Valley Regional Airport.

While President Donald Trump announced Friday that a deal had been reached with congressional leaders to reopen the government for three weeks, the threat of a resumption of the shutdown remains if politicians in Washington, D.C., can’t resolve Trump’s demand for $5.7 billion for a U.S.-Mexico border wall and reach an agreement to continue funding the government.

“It’s ludicrous to do this to the economy,” Marron Foods president Matt Pearson said Friday shortly before news of the deal broke. “It’s sad because the shutdown is making it really difficult to make a living.”

Making matters worse, Pearson said, is the potential long-term impact on TVS, which has been forced to run on reserves and recently warned workers that those funds could only support their work through mid-February. Roughly 75 percent of the company’s employees have disabilities or other barriers to employment and likely would be hard-pressed to find other jobs.

Marron Foods has been supplying dried milk to the federal government since 1964 and for the past 17 years through TVS, which packages and distributes it to schools and food banks across the country through contracts with the U.S. Department of Agriculture.

TVS has relied on an extended line of credit to pay its 160 employees, putting a severe crimp on its cash flow and eliminating its ability to pay Marron Foods and other suppliers, said Becky Alderman, chief operations officer at TVS.

“Who would have thought that our little town in western North Carolina would be affecting your little town in western Wisconsin?” Alderman said. “And we’re just one small part of a much bigger problem.”

The Washington Post has estimated that nearly 10,000 companies, doing work valued at about $200 million a week, hold contracts with federal agencies affected by the government shutdown.

However, the shutdown’s impact on federal contractors is not as well understood, and private workers who lose paychecks as an indirect result of the shutdown don’t have back pay to look forward to when the government resumes full operations.

“It’s not that I don’t have a lot of compassion for the 800,000 government workers who are furloughed or not getting paid, but the tentacles of this go so much deeper,” Alderman said. “A lot of us are really struggling.”

U.S. Rep. Ron Kind, D-La Crosse, sent a letter Friday morning to USDA Secretary Sonny Perdue explaining the shutdown’s impact on the powdered milk supply chain and how it potentially threatened the livelihoods of the 45 employees at Marron Foods and those at TVS.

“If the situation does not improve quickly, (Marron Foods) will be forced to consider shortened hours and layoffs for their employees,” Kind wrote in requesting Purdue’s immediate assistance.

After the tentative deal to end the shutdown was announced, Pearson pointed out that he still had excess product storage bills and had no idea when TVS might receive its delayed federal government payments and be able to pay its suppliers.

No paychecks

The Chippewa Valley Regional Airport’s 10 TSA agents were considered essential workers and thus had been required to work since the shutdown began Dec. 22. They were scheduled to miss their second paycheck this weekend, said Robert Schmidt, the agency’s transportation security manager for the Eau Claire and La Crosse airports. With Congress taking up the temporary shutdown resolution measure Friday, it wasn’t immediately clear when those workers would receive payment for their unreimbursed work.

Reports of significant delays Friday at key airports in the Northeast because of absences of unpaid air traffic controllers led to a heightened sense of urgency to end the shutdown, although Schmidt said Thursday that all TSA agents at west-central Wisconsin airports had been showing up for work.

“We’re doing the best we can,” he said.

A veteran Eau Claire TSA agent, who asked not to be identified because of the personal finance aspect of the shutdown, said he was making ends meet but knew that missing paychecks caused hardship for some federal workers living paycheck to paycheck.

“It’s frustrating,” said the agent, who has endured two other government shutdowns in his career with the agency. He declined to comment on the agreement temporarily ending the longest shutdown in U.S. history.

The agent did express gratitude for the multiple air travelers who thanked him for his service, despite not getting paid, during the shutdown and also for some donations of food from airport staff.

Helping hands

Several Eau Claire businesses, including Dickey’s Barbecue Pit, Shanghai Bistro and Great Harvest Bread Co., stepped forward to offer assistance to furloughed and unpaid federal workers during the shutdown.

Dickey’s offered a free meal, up to twice a week, for federal workers affected by the shutdown, and owner Jared Trapp said several folks took him up on the offer and said they were thankful for the helping hand.

“I was just trying to help out the community. That’s what it’s all about,” Trapp said.

John Tran, general manager of Shanghai Bistro, said the restaurant launched an offer Friday of free takeout meals — he and owner Henry Chan didn’t want people to feel compelled to tip wait staff — to alleviate hunger for affected federal workers and their families.

The Great Harvest in Eau Claire followed the lead of other stores in the chain this week by starting a “Shutdown Shelf” that provided a free loaf of bread per week to affected federal workers.

“These are some proud people who aren’t used to being put in this situation, so this is a way they can get some bread for their family,” said co-owner Lee Fletcher. “It’s a little thing, but it’s what we can do as a small ma and pa bakery.”

‘Held hostage’

The anger and frustration of those caught up as collateral damage in the political fight leading to the shutdown is apparent.

“I’m angry at all of them, and I think everybody is at this point,” Alderman said of the politicians that allowed the shutdown to drag on so long.

While she acknowledged the border security debate is important, she said shutting down the government as a bargaining chip was the wrong way to go about it.

“I feel like we’re being held hostage for this fight,” Alderman said, noting that it will take longer for TVS to recover from the damage caused by this shutdown than previous shorter ones.

For Pearson, the Marron Foods owner, his concern starts with his employees but also extends to the company’s bottom line.

“These politicians take their sweet time and basically have their egos get in the way of rationality,” Pearson said. “What’s happening is the American public is suffering in a great way and in some cases in a way that is irreparable. This nonsense has to stop.”