National Security Network

Economists Debunk Military Jobs Argument

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Report 27 October 2011

Military Military Defense Budget supercommittee

As the Super Committee convened yesterday to discuss possible deficit-reduction deals, its members were bombarded with faulty claims about the relationship between defense spending and jobs. Economists and strategists alike point out that, because military spending is capital-intensive, not labor-intensive, it is a poor job creator. More importantly, as TIME's Nick Schwellenbach echoes Dwight Eisenhower: "The defense budget should not be a jobs program -- the size of the defense budget should be based on a realistic assessment of threats and the needs of the force."  Congress cannot take the easy way out: the Pentagon's budget should be built around a coherent strategy geared toward 21st century threats, not erroneous jobs claims.

"Military spending is an incredibly poor job creator." The Center for International Policy's William Hartung explains, "Military spending should not be seen as a jobs program. To paraphrase President Dwight D. Eisenhower, we should spend everything we need to defend the country, and not one penny more. But that hasn't stopped the arms lobby from attempting to cloud the debate over what we need for our security by asserting that cuts in military spending will result in major job losses. Military spending is an incredibly poor job creator. Virtually any other use of funds, from education to infrastructure to energy efficiency, will create substantially more jobs, according to a 2009 study by economists at the University of Massachusetts. And not just a few more jobs - many, many more jobs. Spending on education creates over two and one-half times as many jobs as military spending; clean energy, one and one-half times as many jobs; and a tax cut, 25% more jobs. In fact, when it comes at the expense of cuts in other programs - as it almost certainly will in the current budgetary climate - military spending will result in a net loss of jobs nationwide." [William Hartung, 10/26/11]

Military spending is capital intensive, not labor intensive. Economist Dean Baker writes, "During a downturn where there are lots of unemployed workers, any government spending will create jobs, regardless of whether or not it is on the military. In fact, military spending is likely to create fewer jobs than spending in most other areas (e.g. education, health care, conservation) because it is more capital intensive. When the economy is near full employment, military spending is a drag on the economy. It pulls resources away from private sector uses, lowering investment and increasing the trade deficit. This leads to job losses, which are likely to be felt most severely in manufacturing and construction... If the spending doesn't make sense in terms of advancing national security, then it doesn't make sense period: end of story." William Hartung similarly argues, "In addition, more of the military dollar goes to capital, as opposed to labor, than do the expenditures in the other job categories.  For example, only 1.5% of the price of each F-35 Joint Strike Fighter pays for the labor costs involved in ‘manufacturing, fabrication, and assembly' work at the plane's main production facility in Fort Worth, Texas.  A full 85% of the F-35s costs go for overhead, not for jobs actually fabricating and assembling the aircraft." [Dean Baker, 10/26/11. William Hartung via Battleland, 9/21/11]

Time to make the hard choice-defense spending has to be on the table. As Wired's Spencer Ackerman writes, "[F]ighting for defense money as a jobs program is easier than making a case for what a sensible, appropriately funded defense strategy ought to be." And as the deadline for the Super Committee draws near, military and bipartisan experts have put a variety of options on the table to prioritize efficient 21st-century spending and prune what is not needed.

Lawrence Korb, senior fellow at the Center for American Progress and former assistant secretary of defense in the Reagan administration, and Alex Rothman: "Given the long-term threat that the federal deficit poses to American security, power, and interests, it is imperative that the committee make real progress toward getting our nation's fiscal house in order. Sensible reductions in the defense budget must be part of the solution. In the decade since 9/11, defense spending has grown by a staggering 56 percent, reaching levels not seen since the end of World War II. Last year, we spent $250 billion more in real terms than what we spent on average during the Cold War. This level of spending is dramatically out of proportion with the threats. Wasteful defense spending does not make our nation safer. It diverts resources away from other key investments in the American economy, the real foundation of U.S. power." [Lawrence Korb and Alex Rothman, 10/13/11]

Brigadier General John Adams, USA (Ret.), former deputy U.S. military representative to the NATO Military Committee: "Let's face it, we can no-longer afford the cost of doing more of the same with defense spending, especially when that means applying 1980s solutions to problems of the second decade of the 21st Century. A prime example of this is our nuclear posture. Ever since President Reagan, we have negotiated reductions in Russian and US nuclear forces, with strong verification measures that created stability and predictability. We must advance this system and insist on reductions in other countries' nuclear arsenals as well. Further nuclear arms reductions should eliminate weapons we don't need, while retaining a strong and appropriate deterrent. In the process, we will free up resources to meet 21st Century challenges." [John Adams, The Hill, 8/26/11]

New York Times Editorial Board: "[T]he Pentagon must also sharply prune the tens of billions it spends every year on building new versions of cold war weapons systems ill suited to America's 21st-century military needs: aircraft carriers, nuclear attack submarines, stealth destroyers and manned aerial combat fighters. The United States already has a comfortable margin of dominance in all these areas. The Pentagon's ambitions expanded without limit over the Bush era, and Congress eagerly wrote the checks. The country cannot afford to continue this way, and national security doesn't require it." [New York Times, 9/27/11]

What We're Reading

Afghan military and police forces will assume security responsibilities in 17 areas of the country next week, including the unsettled Helmand province.

A bomb hidden by Afghan insurgents on a fuel truck exploded near Bagram Air Base, its intended destination, killing at least 10 people.

NATO is postponing its decision to end formal military operations in Libya, pending further negotiations with the United Nations and Libya's Transitional National Council.

Representatives from the Arab League met with Syrian president Bashar al-Assad to work toward a peaceful settlement to the protests against Assad's government.

Iran's Supreme Leader, Ayatollah Khamenei, proposed that Iran move away from popular elections for president, the latest sign of a growing rift between Khamenei and President Mahmoud Ahmadinedjad.

Kenyan officials revealed that their military mission in Somalia had been planned for months as a means of keeping Somali militant violence from spreading across the Horn of Africa.

The Ivorian Popular Front, the political party led by former Côte d'Ivoire president Laurent Gbagbo, will not run candidates in December's legislative elections.

European banks agreed to take a 50% loss on the value of Greek debt as part of a larger euro rescue package under negotiation by European leaders.

Secretary of Defense Leon Panetta told American troops in Seoul that the United States will work to counter threats from North Korea.

Commentary of the Day

Fareed Zakaria calls on the Obama administration to seek open dialogue with Iran over its nuclear program.

The Los Angeles Times editorial board explains that the recent successes in the Arab Spring should increase the pressure on Syrian president Bashar al-Assad to step down.