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Cuts and f-35 debate raise doubts about military jobs - Digital Clamp Meters Manufacturer by grass lawn





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Cuts and f-35 debate raise doubts about military jobs - Digital Clamp Meters Manufacturer by
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Cuts and f-35 debate raise doubts about military jobs - Digital Clamp Meters Manufacturer


 
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Editor s note: This story is the second in a series about theeconomic impact of the defense industry in Vermont. Click here toread the first, Vermont s defense industry grows under the radar . Dire warnings that thousands of Vermont jobs are at risk due tolooming defense cuts and related changes in Air Force prioritiesmay turn out to be overstated, or at least premature. In March, a report commissioned by the Aerospace IndustriesAssociation (AIA) predicted that Vermont would lose upwards of2,100 jobs if automatic defense cuts, called sequestration, weretriggered by the failure of Congress to reach a budget deal.

Vermont Air National Guard jobs were reportedly also on the line.Under the Pentagon s initial budget the Air Guard could see a lossof 9,900 jobs nationally over the next five years, including 3,900active duty personnel and 900 members of the Air Force reserve. Two months later such outcomes look less likely. Research meanwhileindicates that funding for clean energy, health care, and educationwould create substantially more jobs. The AIA study, conducted for the aerospace industry in 2011 byStephen Fuller of George Mason University, projects that more thana million jobs could be lost nationally if sequestration leads to aprojected $600 billion cut in the defense budget. The Pentagon andother analysts forecast more conservatively that $1 trillion incuts over a decade would add one percentage point to theunemployment rate.

"The data speaks for itself; America's aerospace anddefense industry is a sector that punches far above itsweight," claims AIA President Marion Blakey. "Andit's not just the numbers, which are impressive by themselves it's how this industry makes a difference in the lives ofall Americans." On the other hand, he also predicts that cuts brought on bysequestration will devastate our industry's contributionsto America's bottom line. Similar arguments were made during the recent Air Force publichearing on stationing F-35As with the Air Guard at BurlingtonInternational Airport. Gov. Peter Shumlin is one of several Vermontofficials who have endorsed bedding 18 to 25 of the pricey,long-awaited aircraft at the airport in Burlington based on jobsand economic factors.

In a statement he argued that drawbacks suchas increased noise are outweighed by the extraordinary benefitsthat this opportunity presents our communities and our state. Business leaders contend that the presence of the Air Guard is amagnet attracting investments and jobs in aerospace. This is true,but only to a limited extent.The largest contractors, which take inat least 75 percent of Vermont s total defense funding, havenothing directly to do with the presence of Air Guard. Othersmaller firms across the state produce equipment and services fordiverse military purposes, and sometimes for dual military-civilianuses.

A new economic study concludes that investing the same amount ofmoney in clean energy, health care, or education would produce morejobs. Documenting the fluctuating, boom and bust nature ofmilitary spending, previous research indicates that spendingreductions during the 1980s and early 1990s deepened the job lossesin New England and slowed the pace of its employment gains in thesubsequent economic recovery. Comparing employment ripples In 1986 General Electric was the largest defense contractor inVermont, receiving $270 million (80 percent of all contracts thatyear) for high-tech gatling guns used on helicopters. The secondlargest contractor was Simmonds Precision,which won $19 million. Other significant players included Joslyn Defense Systems inShelburne, Damascus Corp.

in Rutland, and the University ofVermont. Joslyn was the promising newcomer,growing rapidly to 160employees by producing a braking system for the B-22 bomber andelectrical interfaces between aircraft and weapons systems. Nationwide, defense-related employment in the private sectoraccounted for 3.6 million jobs in 1987, or 3.5 percent of allprivate nonfarm employment. By 1992, however, more than 700,000defense-related jobs had been eliminated. As a result GE cut morethan 14 percent of its aerospace jobs, including more than 650 atits Burlington plant in under two years.

In a 1995 research paper, The costs of defense-related layoffs inNew England, published by the New England Economic Review,Yolanda K. Kodrzycki concluded that the negative economic ripplewas disproportionate in New England during the previous recession.Defense contracts fell at a greater rate than the national average,and a far greater percentage of jobs were cut at New Englandmilitary bases. Military contract cutbacks accounted directly for a 1.7 percentdrop in New England employment in the years following 1989, almosta third of the total net drop. As a GE spokesperson acknowledged,even when contract money was doubling in boom times the number ofjobs did not significantly increase. The 1995 study also examined the experiences of about 5,000 formerdefense workers after their layoffs.

Changes in the region'smix of jobs and needed skills meant that former defense workers hadspecial difficulty finding work, and especially in landing jobs ata similar income. The problems were most serious for older workersand those without a college degree, the study concluded. A new report, The US Employment Effects of Military and DomesticSpending Priorities: 2011 Update, concludes that every $1 billiondevoted to clean energy, health care, and education will createsubstantially more jobs within the US economy than would the same$1 billion spent on the military. The findings are the sameacross all pay ranges. Since 2001 the level of military spending has increased an averageof 5.3 percent a year, point out authors Robert Pollin and HeidiGarrett-Peltier, economics faculty members at the University ofMassachusetts.

In 2010 the U.S. defense budget was $689 billion, orabout $2,200 for every U.S. resident. As a share of Gross Domestic Product (GDP) military spending rosefrom 3 to 4.7 percent during the last decade.

More than 650Vermont-based businesses handled $621.3 million in defensecontracts last year, down from $827 million in 2010. Between 2000and 2011, contractors brought in a total of more than $7.5 billion,according to data available at government contractswon.com. Twocorporations, General Dynamics in Burlington and Simmonds Precisionin Vergennes, received between 70 percent and 95 percent of themoney. The often-mentioned ripple effect of defense spending includesthe jobs directly created by production, various goods and supportservices that are needed everything from steel and electronicsto trucking, and the induced effects when those who areinvolved in military production spend the money they have earned.

Based on using such calculations, military spending creates about11,200 jobs for each billion dollars spent, the study says. This ismuch fewer than the 16,800 that could be generated by investmentsin clean energy, or the 17,200 that would result from health carespending. Spending on education is the largest source of jobcreation by a substantial amount, generating about 26,700 jobsoverall through $1 billion on spending, which is 138 percentmore, the report states. More jobs are also created when a higher proportion of the fundingis spent within the country.

In this regard, the report notes thatU.S. military personnel spend about 43 percent of their income ondomestic goods and services while civilians, on average, spend 78percent of their income at home. Jobs associated with the military tend to pay well and provide moregenerous benefits. Average wages for military employment is $58,000a year, compared with $50,000 for health care, energy and educationjobs.

The main factor driving the difference is the extensivehealth coverage for members of the military. On the other hand, spending on education, health care and cleanenergy generate more jobs at a variety of pay levels. Comparingclean energy to military jobs, for example, the study concludesthat almost 6,000 jobs paying between $32,000 and $64,000 would becreated in clean energy. Military spending would generate 4,700mid-range jobs, or 15 percent fewer. Next: Protecting the Guard and an alternate engine.

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