Facing South

Is military spending good for creating jobs?

Facing South
Facing South
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War is big business in the South. Dating at least back to World War II, when Southern states saw building military bases and luring contractors as a quick way to jump-start economic growth, defense dollars have played a key role in the South's economy.

Take North Carolina. Over the last decade, state leaders have trumpeted NC as "the most military-friendly state," in 2006 launching a special foundation to encourage more military business. The N.C. Military Foundation today operates with the sole purpose of "growing North Carolina’s defense and homeland security economy."

Military jobs don't come free, of course: They are the result of government spending. This reality came into sharp relief when the Congressional "Super Committee" failed to agree to federal budget cuts, forcing $1.2 trillion in across-the-board cuts of which half will affect military programs. The Department of Defense has called this a "doomsday" scenario resulting in a less-safe country and big job losses; others see the cuts, which amount to about $55 billion a year, as not so severe.

But aside from questions of whether the military spending is needed for defense purposes, is it a good way to create jobs? It certainly used as one of the reason to keep defense dollars flowing at high levels. In 2009, when Georgia's Congressional delegation couldn't defend the production of more F-22 Rapter fighter jets -- aside from the 183 already being built, at a cost $316 million each -- they said that while the jets may be unnecessary for defense reasons, they created 2,000 jobs in Marietta, GA and even more from supplies nation-wide.

A new study finds, however, that military spending isn't a very efficient way of creating jobs. Economists at the Political Economy Research Institute compared the impact of the government spending $1 billion on the military versus other things like eduation, clean energy and health care.

Their findings:

Our conclusion in assessing such relative employment impacts is straightforward: $1 billion spent on each of the domestic spending priorities will create substantially more jobs within the U.S. economy than would the same $1 billion spent on the military. We then examine the pay level of jobs created through these alternative spending priorities and assess the overall welfare impacts of the alternative employment outcomes. We show that investments in clean energy, health care and education create a much larger number of jobs across all pay ranges, including mid-range jobs (paying between $32,000 and $64,000) and high-paying jobs (paying over $64,000). Channeling funds into clean energy, health care and education in an effective way will therefore create significantly greater opportunities for decent employment throughout the U.S. economy than spending the same amount of funds with the military.

In other words, spending on social programs not only creates more jobs, but better-paying ones, which also creates positive ripples throughout the economy. Health care and energy conservation create 50% more jobs than military spending; education creates about twice as much, or 100% more.

Their findings are in line with what the Institute for Southern Studies found in its analysis of the economic impacts of military spending in North Carolina.

That doesn't mean the military doesn't create jobs, some of them good ones, or that cuts to the defense budget won't put people out of work. But looking at the "opportunity cost," or best use of money -- if the discussion is about how to create jobs -- there are better ways to put people to work.

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Comments

Jobs for Peace

This is the same information we have had for over 30 years! The war industry saps money and talent from the local economy and sends their "product" (bombs and soldiers) overseas where they are both "used up".

I wonder if the analysis deals with the cost of medical care and retirment benefits that the military offers its "workers" that are not avaialbe in the private sector.

The US Military is the most Socialist orgranization in the country.

It may be painful for us to reduce the military, but we will make it and come out ehead in many ways at the end.

Jobs for Peace???

First of all, the military creates jobs and stimulates innovation in the private sectro to come out with better weapons that save American, and civilian lives. The military does not 'sap' out money, that can be attributed to social programs that literally give money away and do not create jobs. Social programs take money from the rich via taxes and gives it to the unemployed who have been laid off becuase of those taxes. That is socialism, and you call the military socialist? Furthermore the military gets benefits becuase they put their lives on the line to save yours. When did all the military benefits start? After the second world war, thats not socialism thats repaying those who went through hell to stop Italy, Germany, and Japan. Then throughout every war since they have done the same thing, put thier lives on the line, and you want to cut thier fundig so what? There are no programs to help them? Or better yet stop them from killing terrorists who will stop at nothing to kill us all? Or even allow North Korea to do what they want to whoever they want? No. If anything increase the military. Cut other worthless programs like medicare and welfare if you hate socialism like me. Medicare/Medicade has a budget of $800 billion and welfaer has hunderds of billions as well. Before the 1970's we didnt have them and America did just fine but without the military we would all be under Brittish rule. The US military is the best thing that ever happened to this country they create jobs and protect the lives of US citizens whilst other programs reallocate money. Yes lets cut spending but not the military becuase if you do another 9/11 is right around the corner.

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