After lawmakers in Washington D.C. failed to pass a spending bill by midnight on Tuesday, Rhode Islanders woke up on Wednesday with the federal government shut down and many elements of federal spending on pause.
Rhode Island is home to more than 8,000 federal jobs; Massachusetts hosts more than 25,000, according to 2024 numbers from the Congressional Research Service. While it’s not yet clear how many of those people will be furloughed, or even ultimately laid off, both states’ economies are intricately tied to federal government spending.
So what does a federal government shutdown mean for Rhode Island’s economy? To help answer that question, morning host Luis Hernandez spoke with Nina Eichacker, an associate professor of economics at the University of Rhode Island.
Interview highlights:
On what Rhode Islanders will notice first after a government shutdown
Nina Eichacker: The first things that tend to go when the government shuts down are the payment of WIC and SNAP benefits — WIC refers to special supplemental nutrition for Women, Infants and Children, and SNAP refers to the Supplemental Nutrition Assistance Program. So those payments to households that are insecure with respect to food tend to be the first to go, and this could potentially impact a lot of Rhode Islanders. As of 2024, 38% of Rhode Island households were food insecure, with higher rates among communities of color. Rhode Island food banks are serving record numbers of people each month, as you reported earlier this week, in the midst of declining food donations. So this could generate some material concern for a lot of people in the state.
On how long the shutdown would have to last before Rhode Islanders feel the impact
Eichacker: For some Rhode Islanders, this impact will be felt pretty quickly.
As of July 2025, there were 11,700 federal jobs employed by people in Rhode Island, and that accounts for about 2.3% of all non-farm jobs in the state — or two in 90 jobs. While this is a tiny percentage of federal employment at the national level, those are big numbers in a state like Rhode Island, which has a relatively small population. So for federal employees that live in Rhode Island, this could be felt very quickly.
When we start thinking about the broader Rhode Island population, we’re going to want to start thinking about things like delays in VA benefits, or delays in Social Security payments, or delays in IRS assistance. Anyone who has to rely on federal government services will start to feel this the longer the shutdown goes on.
On if the shutdown comes at a difficult time for Rhode Island’s economy, which is showing mixed signals
Eichacker: I would say so. If we think about the fact that people are more worried about losing their jobs and may already be saving in precautionary ways, that is likely to further freeze spending and create more uncertainty for retailers and businesses that expect people to want to take advantage of their services. If households are deciding to shore up their budgets by going out to dinner less, that starts to have material impacts for people across the state.
