Analysis & Opinions - The Boston Globe

Paychecks as a Defense Weapon

| November 7, 2011

WHEN I WAS in counterterrorism studies after 9/11, significant government investments went into supporting research and analysis at universities. There was a dark joke that so long as any project had a "t" in it — "t" for terrorism — it would get funding. That is how trends work; everyone wants in. We don’t talk as much about terrorism today. It's all about job creation.

And that's the bandwagon the defense industry is trying to ride as the super committee in Congress meets to debate budget priorities. Budgets go down. Just as surely, wars end. Put the two together, and the Pentagon is facing difficult choices about how to reduce a budget that has doubled in the past 10 years.

But, the recipients of military spending today — mainly, defense contractors — aren't so happy with their predicament. So, they have begun a high-octane initiative to convince the American public, and the super committee dealing with debt reduction, that defense spending is a job creator. We won't get out of our unemployment mess if the Pentagon suffers, they argue.

At least they are transparent about the propaganda. Noting that defense and homeland security are polling very low in terms of America's priorities, a lobbyist for Waltham-based military contractor Raytheon publicly admitted he needed a new hook to make military spending stick. "So how do you make this issue resonate?" Michael H. Herson told the Globe. "You talk about jobs."

So, let's talk about jobs. There are many reasons to support military spending, but job creation is not one of them. Defense spending obviously creates jobs; any industry in excess of a couple hundred billion dollars will. But, the real question is whether defense spending creates jobs in the same number or speed as investments in other fields. It doesn't. Indeed, the military would rank fourth after clean energy, health care, and education, in jobs per federal dollar.

This is all from the government’s own data. Professor Robert Pollin from the University of Massachusetts Amherst, whose 2009 study with Heidi Garrett-Peltier of military spending priorities examined Commerce Department data, calculates that for every 12 jobs created in military spending, the same investment in clean energy, health care, or education created 17, 20, and 29 jobs respectively. Their 2011 report, to be issued in a few weeks, confirms the same findings. As Pollin told me, "You may want to spend money on the military for many reasons, but job creation is not a very good one."

This has to do with the nature of military investments. The Center for International Policy details that military spending is more often capital intensive, not labor intensive. Take a single F-35 Joint Strike Fighter. Only 1.5 percent of its total costs (estimates are about $200 million per plane) are spent on labor to assemble and manufacture the entire aircraft.

The defense industry's attempt to link job creation to defense spending is a well-orchestrated mythology, intended to blunt the effects of what is historically called a build-down phase of defense spending.

The Stimson Center's project on Budgeting for Foreign Affairs and Defense looked at that historical data. The Obama administration's proposed $350 billion in multiyear defense reductions is only an 8 percent cut. That is tame compared to the 31 percent decrease after the Korean War, the 28 percent decrease after Vietnam, and the 31 percent decrease after the Cold War.

Surely, some of this panic has to do with the concern that should the super committee fail, then an automatic cut will fall on the Pentagon's spending, about a trillion dollars over 10 years. But even that horrible scenario — horrible because it would suggest Congress can't get agreement on any budget deal — would represent a 17 percent reduction of the present defense budget, still well below other build-downs.

The good news is that, according to Credit Suisse's review of aerospace and defense contractors last month, local military behemoth Raytheon is better situated than any other defense corporation to withstand military spending cuts, its lobbyists' concerns notwithstanding. The reason is that Raytheon has diversified both its products and clientele.

That's the real lesson Raytheon and all the defense industry's lobbyists should be delivering. Diversifying clients and products is a good strategy for stability. If diversification is good enough for Raytheon, it is certainly good enough for the nation as a whole.

For more information on this publication: Please contact the Belfer Communications Office
For Academic Citation: Kayyem, Juliette.“Paychecks as a Defense Weapon.” The Boston Globe, November 7, 2011.

The Author

Juliette Kayyem