Experts skeptical about aerospace industry study on military spending and jobs. “Defense contractors are notoriously bad jobs creators,” said IPS Research Fellow Miriam Pemberton.

Miriam Pemberton, Institute for Policy Studies, 301-367-2831; miriam@ips-dc.org
William Hartung, Center for International Policy, 917-923-3202; whartung@ciponline.org
Lawrence Korb, Center for American Progress, 703-307-4394; lkorb@americanprogress.org

Washington DC — Pentagon budget experts are responding with skepticism to an updated Aerospace Industries Association study on potential job losses. In one sense, experts argue, the new updated AIA study is an improvement over the last one: it has moved (slightly) off the dime of arguing that defense spending should be protected at the expense of everything else in the budget. The new study adds in estimates of job losses from the cuts to domestic programs that could result from sequestration.

But as the mayor of San Diego said at AIA’s press conference this morning, it’s government’s job to “target cuts that will have the least impact on the public.” Here AIA’s primary, enduring focus on making sure the defense budget remains untouched is way off the mark. Some reasons:

• Since 1998 the defense budget has increased by more than 50%. As we exit from two wars, downsizing is appropriate and inevitable. The cuts to the defense budget from the BCA, including sequestration, only bring us back to 2006 spending levels.
• According to figures from an independent firm tracking layoffs, the defense industry, supported by more than half of the discretionary budget, sustained only 5.7% of the job loss in 2011. This is far fewer losses than were suffered in such areas as education and transportation, which are supported by drastically smaller proportions of federal spending .[i]
• Analysis by economists at the University of Massachusetts show that education and transportation are among the fields that generate substantially more jobs per dollar spent than does the defense industry.[ii]

“It is sadly unsurprising that, yet again, the largest Pentagon contracting lobby would come out with a study calling for more money for its own members. You have to think about where these studies come from and how they’re performed,” said Hartung.

“This AIA study assumes that cuts happen in a vacuum. We know that job creation is more effective in almost every other sector examined. Defense contractors are notoriously bad jobs creators, said Pemberton.

“This is an example of hypocritical thinking — if House Armed Services Committee Chairman Rep. McKeon and other Republican leaders cared about job creation, they would support funding for the industries that are most effective at creating jobs,” said Korb.

[i] http://challengergray.com/press/PressRelease.aspx?PressUid=228
[ii] http://www.peri.umass.edu/236/hash/0b0ce6af7ff999b11745825d80aca0b8/publication/489/