Study: Defense spending is not biggest job creator

2011-09-26T00:00:00Z Study: Defense spending is not biggest job creatorDavid Lerman Bloomberg News Arizona Daily Star
September 26, 2011 12:00 am  • 

WASHINGTON - The Pentagon has warned that cuts of as much as $1 trillion in defense spending over 10 years may drive up the nation's unemployment rate, now 9.1 percent, by as much as one percentage point.

Bloomberg's BGOV Barometer shows that, by that logic, cuts of the same magnitude in several nondefense areas would lead to an even greater increase in the jobless rate, judging from study findings by the Political Economy Research Institute at the University of Massachusetts at Amherst.

"That's the obvious conclusion," said study author Robert Pollin, co-director of the institute, in an interview. "The Pentagon is a relatively weak source of job creation."

According to the 2009 study, $1 billion spent on defense produces fewer jobs than the same amount invested in clean energy, health care, education or tax cuts that trigger increased personal consumption.

Spending $1 billion on the military would produce 11,600 jobs, including both government jobs and the spinoff effect of increased work for private industry, according to the institute's study, which used 2007 data from the Department of Commerce and other public sources.

The same money spent on tax cuts for personal consumption would create 14,800 jobs, the study found. There would be 17,100 jobs created through clean-energy spending, 19,600 jobs through health-care spending, and 29,100 jobs through education spending.

"Spending $1 billion on personal consumption, clean energy, health care and education will all create significantly more jobs within the U.S. economy than would the same $1 billion spent on the military," said the study, written by Pollin, an economics professor at the University of Massachusetts, Amherst, and Heidi Garrett-Peltier, an assistant research professor.

Military spending creates fewer jobs, the study found, because those jobs pay better than those in other fields.

Jobs from military spending pay an average of $79,124 in wages and benefits, the study said. That compares to $52,695 for personal-consumption jobs, $67,997 for clean-energy jobs, $55,084 for health-care jobs, and $60,308 for education jobs.

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