Editor’s note: This commentary is by Greg Guma, the Vermont-based author of “Dons of Time,” “Uneasy Empire,” “Spirits of Desire,” “Big Lies,” and “The People’s Republic: Vermont and the Sanders Revolution.” His latest book is “Green Mountain Politics: Restless Spirits, Popular Movements.” He blogs at Greg Guma / For Preservation & Change. He was an independent candidate for mayor of Burlington in 2015.
In Vermont’s ongoing debate about the basing of F-35 fighter jets at the Burlington International Airport the arguments in support often center on balancing noise and other admitted impacts against economic necessities, benefits and fears. But the controversy also raises questions about the real economic impacts of military spending.
In 2012, for example, dire warnings that thousands of Vermont jobs were jeopardized by looming defense cuts and changes in Air Force priorities turned out to be overstated. Speaking at an Air Force public hearing on the F-35 Environmental Impact Statement, Phil Scott, then Vermont’s lieutenant governor, explained that one of his main fears was “that, with all of the talk at the federal level about reducing costs, if the program is not located here, there is a real chance the base could be reduced in size or possibly closed altogether.”
Around the same time, a report commissioned by the Aerospace Industries Association predicted that Vermont would lose upwards of 2,100 jobs if automatic defense cuts were triggered. Vermont Air National Guard jobs were reportedly also on the line. Within months it became clear none of this was happening.
In reality, the National Guard is a collection of independent militia-type units, each answerable to state executives for executing state missions such as disaster response or support to civil authorities during a crisis. The National Defense Act of 1915 established the concept of the citizens’ army as the keystone of U.S. defense forces. It merged the services in time of war, but also expanded the National Guard’s role, and guaranteed its status as the primary reserve force. Under subsequent legislation, each state was guaranteed a minimum of one flying unit.
Threats that rejection of F-35s would lead to layoffs or base closure are groundless. The Air Force has stated multiple times, most recently in 2016 filings, that the Vermont Air Guard would continue to have a flying mission even if the F-35 were not based here.
Supporters of having up to 24 fighter jets parked at the airport also contend that the presence of the Air Guard is a magnet attracting investments and jobs in aerospace. This is true, but only to a limited extent. The largest contractors, which receive at least 75 percent of Vermont’s total defense funding, have nothing directly to do with the presence of the Air Guard. Other smaller firms produce equipment and services for diverse military purposes, and sometimes for dual military-civilian uses. Even if the F-35 were canceled, the Air Guard would remain a magnet for jobs and equipment that were compatible with its location in a city.
The truth is that the same funding used for peaceful domestic purposes would create substantially more jobs. Every $1 billion devoted to clean energy, health care and education creates “substantially more jobs within the US economy than would the same $1 billion spent on the military,” according to The U.S. Employment Effects of Military and Domestic Spending Priorities: 2011 Update. The findings were the same across all pay ranges.
In the decade after 2001 the level of military spending increased an average of 5.3 percent a year, point out authors Robert Pollin and Heidi Garrett-Peltier, economics faculty at the University of Massachusetts. In 2010 the U.S. defense budget was $689 billion, or about $2,200 for every U.S. resident.
As a share of gross domestic product military spending rose from 3 to 4.7 percent during that decade. More than 650 Vermont-based businesses handled $621.3 million in defense contracts in 2011, down from $827 million the previous year. Between 2000 and 2011, contractors brought in a total of more than $7.5 billion. But two corporations, General Dynamics in Burlington and Simmonds Precision in Vergennes, received between 70 percent and 95 percent of the money.
The often-mentioned “ripple effect” of defense spending includes the jobs directly created by production, various goods and support services that are needed – everything from steel and electronics to trucking, and the “induced effects” when those who are involved in military production spend the money they have earned.
Based on such calculations, military spending creates about 11,200 jobs for each billion dollars spent, the study claims. This is much fewer than the 16,800 that could be generated by investments in clean energy, or the 17,200 that would result from health care spending. “Spending on education is the largest source of job creation by a substantial amount, generating about 26,700 jobs overall through $1 billion on spending, which is 138 percent more,” the report states.
Jobs associated with the military tend to pay well and provide more generous benefits. Average wages for military employment is $58,000 a year, compared with $50,000 for health care, energy and education jobs. But the main factor driving the difference is the extensive health coverage for members of the military.
On the other hand, spending on education, health care and clean energy generates more jobs at a variety of pay levels. Comparing clean energy to military jobs, for example, the study concludes that almost 6,000 jobs paying between $32,000 and $64,000 would be created in clean energy. Military spending would generate 4,700 mid-range jobs, or 15 percent fewer.
Research on the fluctuating, “boom and bust” nature of military spending meanwhile indicates that periodic spending reductions deepen job losses and slow the pace of employment gains in a subsequent economic recovery.
In 1986, for example, General Electric was the largest defense contractor in Vermont, receiving $270 million (80 percent of all contracts that year) for high-tech Gatling guns used on helicopters. Nationwide, defense-related employment in the private sector accounted for 3.6 million jobs in 1987, or 3.5 percent of all private non-farm employment. By 1992, however, more than 700,000 defense-related jobs had been eliminated. As a result, GE cut more than 14 percent of its military and aerospace jobs, including more than 650 jobs at its Burlington plant in under two years.
As a GE spokesperson acknowledged, even when military contract money was doubling in good times, the number of jobs did not significantly increase.
