Thursday, May 31, 2012

Military Spending: Where are the Jobs?

In recent Vermont debate about the impacts of bedding F-35A fighter jets at the Burlington International Airport arguments in support often come down to balancing noise and other impacts against economic necessities and benefits. Whatever the outcome it has raised renewed questions about the economic impacts of military spending. A new study finds that money spent on clean energy, health care, and education would create many more jobs than if the same money is spent on defense.       By Greg Guma

Sen. Pat Leahy has fought to save
an alternate F-35 engine that would
mean jobs at a Rutland  GE plant.
Dire warnings that thousands of Vermont jobs are at risk due to looming defense cuts and related changes in Air Force priorities may turn out to be overstated, or at least premature.

In March, a report commissioned by the Aerospace Industries Association (AIA) predicted that Vermont would lose upwards of 2,100 jobs if automatic defense cuts were triggered 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 loss of 9,900 jobs nationally over the next five years, including 3,900 active duty personnel and 900 members of the Air Force reserve.

Two months later such outcomes look less likely. Research meanwhile indicates that funding for clean energy, health care, and education would create substantially more jobs.

The AIA study, conducted for the aerospace industry in 2011 by Dr. Stephen Fuller of George Mason University, projects that more than a million jobs could be lost nationwide if sequestration leads to a projected $600 billion cut in the defense budget. The Pentagon and other analysts forecast more conservatively that $1 trillion in cuts over a decade would add one percentage point to the unemployment rate.

"The data speaks for itself, America's aerospace and defense industry is a sector that punches far above its weight," claims AIA President Marion Blakey.  "And it's not just the numbers, which are impressive by themselves— it's how this industry makes a difference in the lives of all Americans."

On the other hand, he predicts that cuts brought on by sequestration will “devastate our industry's contributions to America's bottom line.”

Similar arguments were made during the recent Air Force public hearing on stationing F-35As with the Air Guard at Burlington International Airport. Gov. Peter Shumlin is one of several Vermont officials who have endorsed bedding 18 to 25 of the pricey, long-awaited aircraft at the airport in Burlington based on jobs and economic factors. In a statement he argued that drawbacks such as increased noise “are outweighed by the extraordinary benefits that this opportunity presents our communities and our state.”

Business leaders 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 take in at least 75 percent of Vermont’s total defense funding, have nothing directly to do with the presence of Air Guard. Other smaller firms across the state produce equipment and services for diverse military purposes, and sometimes for dual military-civilian uses.

A new economic study concludes that investing the same amount of money in clean energy, health care, or education would produce more jobs. Documenting the fluctuating, “boom and bust” nature of military spending, previous research indicates that spending reductions during the 1980s and early 1990s deepened the job losses in New England and slowed the pace of its employment gains in the subsequent economic recovery.

Comparing employment ripples

In 1986 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. The second largest contractor was Simmonds Precision, which won $19 million.

Other significant players included Joslyn Defense Systems in Shelburne, Damascus Corp. in Rutland, and the University of Vermont. Joslyn was the promising newcomer, growing rapidly to 160 employees by producing a braking system for the B-22 bomber and electrical interfaces between aircraft and weapons systems.

Nationwide, defense-related employment in the private sector accounted for 3.6 million jobs in 1987, or 3.5 percent of all private nonfarm 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 aerospace jobs, including more than 650 at its Burlington plant in under two years.

In a 1995 research paper, “The costs of defense-related layoffs in New England,” published by the New England Economic Review, Yolanda K. Kodrzycki concluded that the negative economic ripple was 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 England military bases.

Military contract cutbacks accounted directly for a 1.7 percent drop in New England employment in the years following 1989, almost a third of the total net drop. As a GE spokesperson acknowledged, even when contract money was doubling in good times the number of jobs did not significantly increase.

The 1995 study also examined the experiences of about 5,000 former defense workers after their layoffs. Changes in the region's mix of jobs and needed skills meant that former defense workers had special difficulty finding work, and especially in landing jobs at a similar income.  The problems were most serious for older workers and those without a college degree, the study concluded.

A more recent report, “The US Employment Effects of Military and Domestic Spending Priorities: 2011 Update,” concludes that every $1 billion devoted to clean energy, health care, and education “will create substantially more jobs within the US economy than would the same $1 billion spent on the military.”  The findings are the same across all pay ranges.

Since 2001 the level of military spending has increased an average of 5.3 percent a year, point out authors Robert Pollin and Heidi Garrett-Peltier, economics faculty members at the University of Massachusetts. In 2010 the US defense budget was $689 billion, or about $2,200 for every US resident.

As a share of Gross Domestic Product (GDP) military spending rose from 3 to 4.7 percent during the last decade. More than 650 Vermont-based businesses handled $621.3 million in defense contracts last year, down from $827 million in 2010. Between 2000 and 2011, contractors brought in a total of more than $7.5 billion, according to data available at 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 says. 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.

More jobs are also created when a higher proportion of the funding is spent within the country. In this regard, the report notes that US military personnel spend about 43 percent of their income on domestic goods and services while civilians, on average, spend 78 percent of their income at home.

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. 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 generate 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.

This is the second of a series of articles about the effects of the defense industry in Vermont. Part One is available on "Vermont's Defense Industry Grows "Under the Radar."  

Friday, May 25, 2012

HIGH VOLUME: Race, Education and the F-35s

Scenes of informed dissent
     Turnout has been high and dialogue heated at public meetings held lately in Burlington and environs. On a recent Monday, for instance, dozens of people both in favor and opposed to a proposed health access buffer zone at Burlington reproductive health care centers brought their arguments and deeply held beliefs to the City Council. On the same night dozens more Vermonters showed up nearby in South Burlington just to watch the City Council, in a 4-1 vote, reject a plan to base F-35 fighter jets at the airport. I missed that, but I was was there a week earlier…

     Noises Up… It was the most dramatic local showdown thus far this season. More than 300 people gathered at the high school in South Burlington for an Air Force public hearing on the environmental impacts of the multi-purpose F-35A, the military’s most expensive pet project yet. It was civil -- but intense -- as Vermonters talked passionately about military pride, damaged neighborhoods endangered jobs and rising noise for over two hours. 
     The lighting was spooky. But the testimony – a dozen people appear in the scene above – was often compelling.

     More than 100 residents showed up at Burlington High School a few days before that to speak their minds about racial inequality and harassment in the schools. Some were calling for Superintendent of Schools Jeanne Collins to resign. 
     Tension had increased since the release of a diversity, equity and inclusion plan, its rebuttal by a math teacher, and protests outside the high school. This scene captures several statements, plus a confrontational moment involving one leading Somali student. Collins has issued a public apology but says she does not intend to step down.
     From my place it’s a short walk up the hill to UVM….

     Part of my job for VTDigger is to cover some of the region's large institutions. The University of Vermont certainly qualifies. More than 10,000 students and half a billion annually in expenses and revenues. 
     “You can see the analogy with the banking industry,” lamented John Bramley at one point during the recent Trustees meeting. What he meant was that large institutions have economic advantages, and also that a university education could again “become the preserve of the wealthy and the privileged. Temporarily promoted last year after the tumultuous departure of President Dan Fogel, he delivered the news forcefully in final remarks before the arrival of a new president, lawyer and former University of Minnesota Provost Tom Sullivan. 
     Bramley sounded like he was borrowing from the Occupy movement. In this scene Provost Jane Knodell also defends the university's strategic plan. It ends with a brief look at financial aid that might not put you to sleep. 
     For more details check my articles on UVM, race in Burlington and the F-35 debate at VTDigger. But now some drumming and few last words....

     Yes, there's a lot going on. But that's no excuse to neglect the Maverick Chronicles. Hope you enjoy these scenes. On the other hand, sometimes you have to just kick back, watch and listen. So, I’ll end this installment with a rhythmic take on opening day at the Farmers’ Market in City Hall Park. It was lovely and the dancers were terrific. If you’ve come this far and especially if you sampled the earlier scenes, don’t skip the climax. It's worth it. 
     Dissent without music, food and laughter would not be worth all the trouble. Just saying... 

Wednesday, May 9, 2012

Progressive Eclipse: The E-Book Has Landed

Three progressive mayors managed Burlington for 29 of the 31 years after Bernie Sanders’ first win. Although Democrats continued to dominate the City Council during most of that time, and a Republican candidate for mayor could still win, a multi-party political system had changed the shape and style of city government, and, beyond that, fundamentally altered Vermont’s political landscape. 
-- From the Introduction
      Burlington's historic 2012 mayoral race lasted six months. But in the end it took only half an hour after the polls closed to find out who won. For the first time in three decades Democrats took control of City Hall. Written in the heat of that campaign, Progressive Eclipse explores the recent struggles of the most successful progressive movement in the last half century.
    In 1989 Greg Guma's book, The People's Republic: Vermont and the Sanders Revolution, described the rise of Vermont's progressive movement. Much has changed since Sanders moved on to Congress, and economic and political pitfalls have created new challenges. Putting local politics in a larger context, this new e-book also explores the early impacts of the Occupy movement and the campaign to overcome the Supreme Court's Citizens United decision. But the main focus is the hotly contested mayoral race between housing developer Miro Weinberger, Republican Kurt Wright and Independent Wanda Hines.
     Progressive Eclipse takes a sympathetic, yet critical look at why local progressives found themselves on the defensive despite an impressive record of success, examining developments like the controversial decision by Sanders and Mayor Bob Kiss to invite military contractor Lockheed Martin to Vermont, as well as financial problems that emerged after Burlington launched a municipally-owned cable TV and fiber optic system. It also examines the impressive record of three Progressive administrations, and chronicles the twists and turns of the race that resulted in Weinberger's decisive victory.
    As Greg Guma explains, an eclipse doesn't mean the end of anything. But this one does raise thorny questions about progressive politics in Vermont and across the country.
    The 189-page book is now available for $4.99. To download a free sample, click on the link below: 
Prologue: Real Change
Part One: Primary Dilemmas
A Legacy at Risk * When Lockheed Came to Town
Burlington Gets Occupied * Moving to Amend
The Fusion Path * The Public Power Story
Miro’s Fresh Start * What Democracy Can Look Like
Doubts about Fusion * Trust, Votes and Skate Park Funding
Fusion Down, But One Choice to Go
Project Smart Grid (or, How Vermont Learned to Stop Worrying and Love Sandia)
Then & Now
Part Two: Progressive Paradoxes
Rhetoric & Reality * Identity Crisis
Beyond Bernie * Pragmatic Populism
Mixed Messages * Small Changes
Part Three: Regime Change
Prelude to Upheaval * Inconvenient Choices
The Man Who Would Be Mayor * Sparring on Development
Building the Ballot * Housing, Hines & the Fiscal Squeeze
Taxes, Cops & Kids * Strange Encounters on the Campaign Trail
Mr. Wright and the Women * Audit Games
Daring to be Different * The More-Than-40 Percent Question
Democrats Rising, Progressives in Eclipse

Friday, May 4, 2012


From the People’s Republic… 

TOP STORIES: The Singing Governor (1:17) Protesting Racism (5:45) Equity and Race: A City Hall Forum (9:59) 
MAVERICK CHRONICLES: Progressive Eclipse (7:53) The Next Frontier (5:49) 
SIMPLE DOMESTIC AT HIGHER GROUND: Broken Down Baby (5:57) Expectations (4:16) Hard Heart (3:35) Nothing Compares 2 U (2:42) 
BURLINGTON BEAT: Last Words (9:57) State of the City (9:22) Rising Crime: Neighborhood Forum (9:54) Welch on Student Loans (5:12) Geothermal in Vermont: Sanders Briefing (8:20) Cowbell Time Has Come (9:57) 
DOCUMENTARIES: Moving Toward Freedom (8:31) Odyssey (4:16) Family Ties (5:56)
Created by Greg Guma           As seen on VTDIGGER.ORG 

It’s not perfect. It’s real.
$10 for the limited edition DVD collection. 
Email for details.