Day: September 26, 2025

As the federal fiscal year draws to a close, an increasingly familiar prospect is drawing near in Washington, D.C.: a possible government shutdown. And for federal workers, it couldn’t come at a worse time.

In the fractious and polarized political landscape of the United States, Democrats and Republicans have come to rely on short-term, stopgap funding bills to keep the government operating in the absence of elusive longer-term budget deals.

With the parties currently wide apart over the terms of even a short-term budget resolution, the government is set to shut down on Oct. 1, 2025, barring an 11th-hour deal that appears far off. If the shutdown does happen, it would mark another difficult moment this year for a federal workforce that has so far shed more than 300,000 jobs. This is largely due to ongoing Trump administration efforts to downsize parts of the federal government and restructure or largely eliminate certain government agencies with the stated aim of increasing efficiency.

With a government shutdown, hundreds of thousands of federal employees would be furloughed – sent home without pay until funding resumes.

As a team of financial economists who study labor markets and public sector employment and have examined millions of federal personnel records spanning such government shutdowns in the past, we have found that the consequences reach far beyond the now-familiar images of closed national parks and stalled federal services. Indeed, based on our study of an October 2013 shutdown during which about 800,000 federal employees were furloughed for 16 days, shutdowns leave an enduring negative effect on the federal workforce, reshaping its composition and weakening its performance for years to come.

What happens to workers

Millions of Americans interact with the federal government every day in ways both big and small. More than one-third of U.S. national spending is routed through government programs, including Medicare and Social Security. Federal workers manage national parks, draft environmental regulations and help keep air travel safe.

Whatever one’s political leanings, if the goal is a government that handles these responsibilities effectively, then attracting and retaining a talented workforce is essential.

Yet the ability of the federal government to do so may be increasingly difficult, in part because prolonged shutdowns can have hidden effects.

When Congress fails to pass appropriations, federal agencies must furlough employees whose jobs are not deemed “excepted” – sometimes commonly referred to as essential. Those excepted employees keep working, while others are barred from working or even volunteering until funding resumes. Furlough status reflects funding sources and mission categories, not an individual’s performance, so it confers no signal about an employee’s future prospects and primarily acts as a shock to morale.

Importantly, furloughs do not create long-term wealth losses; back pay has always been granted and, since 2019, is legally guaranteed. Employees therefore recover their pay even though they may face real financial strain in the short run.

A cynical observer might call furloughs a paid vacation, yet the data tells a different story.

Immediate consequences, longer-term effects

Using extensive administrative records on federal civilian workers from the October 2013 shutdown, we tracked how this shock to morale rippled through government operations. Employees exposed to furloughs were 31% more likely to leave their jobs within one year.

These departures were not quickly replaced, forcing agencies to rely on costly temporary workers and leading to measurable declines in core functions such as payment accuracy, legal enforcement and patenting activity.

Further, we found that this exodus builds over the first two years after the shutdown and then settles into a permanently lower headcount, implying a durable loss of human capital. The shock to morale is more pronounced among young, female and highly educated professionals with plenty of outside options. Indeed, our analysis of survey data from a later 2018-2019 shutdown confirms that morale, not income loss, drives the exits.

Employees who felt most affected reported a sharp drop in agency, control and recognition, and they were far more likely to plan a departure.

The effect of the motivation loss is striking. Using a simple economic model where workers can be expected to value both cash and purpose, we estimate that the drop in intrinsic motivation after a shutdown would require a roughly 10% wage raise to offset.

Policy implications

Some people have argued that this outflow of employees amounts to a necessary trimming, a way to shrink government by a so-called starving of the beast.

But the evidence paints a different picture. Agencies hit hardest by furloughs turned to temporary staffing firms to fill the gaps. Over the two years after the shutdown we analyzed, these agencies spent about US$1 billion more on contractors than they saved in payroll.

The costs go beyond replacement spending, as government performance also suffers. Agencies that were more affected by the shutdown recorded higher rates of inaccurate federal payments for several years. Even after partial recovery, losses amounted to hundreds of millions of dollars that taxpayers never recouped.

Other skill-intensive functions declined as well. Legal enforcement fell in agencies that became short of experienced attorneys, and patenting activity dropped in science and engineering agencies after key inventors left.

Official estimates of shutdown costs typically focus on near-term GDP effects and back pay. But our findings show that an even bigger bill comes later in the form of higher employee turnover, higher labor costs to fill gaps, and measurable losses in productivity.

Shutdowns are blunt, recurring shocks that demoralize the public workforce and erode performance. These costs spill over to everyone who relies on government services. If the public wants efficient, accountable public institutions, then we should all care about avoiding shutdowns.

After an already turbulent year, it is unclear whether an upcoming shutdown would significantly add to the strain on federal employees or have a more limited effect, since many who were considering leaving have already left through buyouts or forced terminations this year. What is clear is that hundreds of thousands of federal employees are likely to experience another period of uncertainty.

The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.

​Politics + Society – The Conversation

The New York Times reports that a senior Department of Justice official recently “instructed more than a half dozen U.S. attorneys’ offices to draft plans to investigate” the Open Society Foundations – philanthropies funded by the billionaire George Soros.

Citing a document that the news outlet said its reporters had seen, the report listed possible charges the foundations could face “ranging from arson to material support of terrorism.”

The philanthropic institution denied any wrongdoing.

“These accusations are politically motivated attacks on civil society, meant to silence speech the administration disagrees with and undermine the First Amendment right to free speech,” Open Society Foundations stated in response to the reported investigations. “When power is abused to take away the rights of some people, it puts the rights of all people at risk.”

The term “civil society” isn’t familiar to all Americans. But it’s part of what helped this country grow and thrive because it encompasses many of the institutions that uphold the American way of life. As a sociologist who studies nonprofits and civil society in the U.S and around the world, I have always been interested in the relationship between the health of a nation’s civil society and the strength of rights and freedom within its borders.

I’ve also noticed that often the term is used without a definition. But I think that it’s important for Americans to become more familiar with what civil society is and how it helps sustain democracy in the United States.

Civil society

The Encyclopedia Britannica defines civil society as “the dense network of groups, communities, networks and ties that stand between the individual and the modern state.”

This constellation of institutions consists of not-for-profit organizations and special interest groups, either formal or informal, working to improve the lives of their constituents. It includes charitable groups, clubs and voluntary associations, churches and other houses of worship, labor unions, grassroots associations, community organizations, foundations, museums and other kinds of nonprofits – including nonprofit media outlets.

Civil society does not include government agencies or for-profit businesses.

Political scientists and sociologists have long claimed that a healthy civil society, which in the U.S. includes a strong and independent nonprofit sector, helps sustain democracy. This is true even though most nonprofits don’t engage in partisan political activities.

My own analysis of survey data from 64 countries has shown that authoritarians have begun to use civil society groups to support their own purposes. But in the United States, at least, most civil society organizations still support democratic values.

Sometimes, scholars call civil society “the third sector” to distinguish it from the public and private spheres.

Most scholars agree that civil society strengthens and protects democracy, and that true democracy is impossible without it. These scholars distinguish between liberal democracies and illiberal democracies.

Liberal democracies have a separation of powers – meaning the executive, legislative and judicial branches of government. They protect individual rights, allow a free press, maintain an independent judiciary and safeguard the rights of minorities.

In illiberal democracies, there are periodic elections, but they are not necessarily fair or free. Civil society tends to be more restricted in illiberal democracies than in liberal ones.

An American strength from the start

The strength of America’s civil society helps explain the long success of democracy in the United States.

In 1835, when the French scholar and diplomat Alexis de Tocqueville visited the country, he marveled at the tendency of Americans to “constantly unite.” They created associations, he wrote, “to give fêtes, to found seminaries, to build inns, to raise churches, to distribute books, to send missionaries to the antipodes; in this manner they create hospitals, prisons, schools.”

Whereas the government initiated grand projects in France and the nobility did so in England, in the United States voluntary associations of ordinary individuals were behind most great endeavors.

What happens in nondemocratic countries

One way to see how important a robust civil society can be is to look at what happens in countries that do not have one.

The totalitarian countries of the 20th century, particularly communist China and the Soviet Union, outlawed civil society under the pretense that the party and the state represented the people’s true interests.

When the Berlin Wall fell in 1989, the United States and Western Europe devoted much diplomacy and foreign aid to helping the former USSR and the countries of Eastern Europe develop civil society institutions, believing this to be a precondition of those countries’ transition to democracy.

Today, civil society flourishes in formerly communist nations that have successfully made the transition to democracy, such as the Czech Republic, Estonia, Latvia and Lithuania. Civil society is restricted in that region’s countries that don’t embrace democracy, such as Belarus and Russia.

Not your grandma’s authoritarians

Today’s authoritarian rulers realize that civil society has the potential to support democracy and pry loose their grip on power. But few of those leaders outlaw civil society organizations entirely.

Instead, authoritarian leaders subordinate civil society organizations to achieve their own ends. In China, which had no civil society before the 1990s, the Communist Party now creates government-organized nongovernmental organizations, or GONGOs, which look like nonprofits and are technically separate from the state, but remain under state control.

Some authoritarians who take power in countries that already have a civil society sector tame these organizations and harness their power through a range of oppressive tactics. They leave alone service-providing organizations, like food banks, free clinics and homeless shelters, and use them to show citizens how they are bringing them benefits.

However, they crack down on advocacy organizations, such as human rights groups, labor unions and feminist groups, as these are a source of potential opposition to the regime. They then cultivate pro-regime civil society institutions, providing them with formal and informal support.

When authoritarians crack down on civil society groups, they sometimes destroy offices and imprison the organization’s leaders and members of their staff. But they generally use more subtle means.

For example, they may pass laws restricting the amount of funding, particularly foreign funding, available to nonprofits. They add layers of red tape that make it hard for nonprofits to operate, such as audits, registration requirements and information requests.

Authoritarians may use those hurdles selectively. Nonprofits that are neutral or friendly to the regime may find they can operate freely. Nonprofits the regime perceives as opponents undergo extensive audits, are forced to wait a long time when they seek to incorporate, and face constant demands for personal information about their funders, members and clients.

Attacks in the United States

Even before news broke of the Trump administration’s reported demand that the Open Societies Foundations be investigated, there were mounting signs that the U.S. was becoming more like authoritarian countries than it used to be in terms of how it treats civil society.

In March 2025, for example, President Donald Trump signed an executive order restricting a federal program that forgives student loans for people who work in public service organizations or the government. The order said that employees of institutions that the Trump administration deems to “have a substantial illegal purpose,” such as providing services to undocumented immigrants or serving the needs of transgender clients, would become ineligible for loan forgiveness.

Over the summer, Congress held three investigative hearings on nonprofits. The Republican Party’s leadership signaled its disdain and distrust of those groups with hearing titles like “Public Funds, Private Agendas: NGOs Gone Wild, ”How Leftist Nonprofit Networks Exploit Federal Tax Dollars to Advance a Radical Agenda,“ and “An Inside Job: How NGOs Facilitated the Biden Border Crisis.”

After the murder of conservative activist Charlie Kirk, Vice President JD Vance threatened “to go after the NGO network that foments, facilitates and engages in violence,” including the Ford Foundation and the Open Society Foundations, despite the fact that there is no evidence that these organizations support violence.

Some nonprofits have published open letters, issued public statements and provided congressional testimony in opposition to the administration’s claims.

What happens next is unclear. The threat to strip organizations of their nonprofit status may be an empty one, given that the Supreme Court has already ruled that doing so is regulated by law and the president cannot do it on a whim.

Many scholars of nonprofits are watching to see if the United States takes more steps down this road to authoritarianism, stays where it is or reverses course.

We are studying how America’s flourishing civil society resists any restrictions that limit the freedoms that have largely been taken for granted – until now.

Christopher Justin Einolf does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

​Politics + Society – The Conversation