Why Trump’s Boost to Military Spending May Not Deliver ‘Jobs, Jobs, Jobs’
Policy + Politics

Why Trump’s Boost to Military Spending May Not Deliver ‘Jobs, Jobs, Jobs’

REUTERS/Erik De Castro

The $54 billion increase in military funding that President Trump has proposed in his 2018 budget would create many more jobs if it were spent on areas like education, infrastructure and clean energy, according to a study released last week by the Costs of War Project at Brown University.

While the increase in defense spending proposed by the Trump administration is not the “historic” investment ballyhooed during the presidential election, it is significant when compared to the proposed cuts in domestic programs.

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The $603 billion slated for defense represents a total increase of around 3 percent over the projected spending by former President Obama, according to Reuters.

But will that relatively modest uptick help create the “jobs, jobs, jobs” that Donald Trump said would be the prime focus of his presidency?

The study, which follows up on a 2011 report on what types of federal spending are the best job creators, doesn’t deny that military spending can promote employment, but it found that it is a far less powerful job engine than spending on domestic programs.

For example, the study says that spending on wind-energy development creates 21 percent more jobs than spending on defense, and that spending on elementary and secondary education outstrips defense spending in job creation by a massive 178 percent.

The author, Heidi Garrett-Peltier, an economist and assistant professor at the Political Economy Research Institute of the University of Massachusetts, Amherst, said in a statement that the U.S. has long had an enormous military budget, “and one of the reasons it has historically remained outsized is that defense spending creates jobs, both in the military and in the industries that supply goods and services to the armed forces. But when we compare federal spending on defense to the alternatives, such as health care, education, clean energy or infrastructure, we find that all of these areas create more jobs than an equivalent amount of military spending.”

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Using software developed by the economic-impact data firm IMPLAN, Garrett-Peltier found that $1 million in spending creates 6.9 direct and indirect defense jobs; 19.2 jobs in lower and middle-school education; 14.3 jobs in health care; and 9.8 jobs in infrastructure work such as highway, tunnel and bridge construction.

However, the jobs created are a mix of full and part-time, so it’s not a strict apples-to-apples comparison.

In an email to The Fiscal Times, Garrett-Peltier said: “It's true that defense spending does create better-quality jobs. In general they have higher pay and greater benefits, but in terms of the overall economy, the total number of jobs and total amount of money going to workers is greater in the alternative areas, and that is better for the economy because the result is greater tax revenues and lower social safety net spending. Of course, [there is] also the psychological benefits of more people being employed, though that is not something that I addressed directly in my study.”

Garrett-Peltier offered two reasons why defense spending is not as robust an employment- builder: First, jobs created by defense spending “leak” overseas while infrastructure, health care and education work remains overwhelmingly within the U.S.

Second, domestic spending generates more jobs than defense spending because it is more labor-intensive. A significant proportion of military funds are spent on weapons and equipment, while education, for example, requires “teachers, aides, principals and others.”

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Another reason that defense spending may not stoke more employment is that building weapons systems has become more mechanized. Garrett-Peltier did not look specifically at the role of robotics, but she said, “I do know that the manufacturing sector in general is producing … fewer jobs per million dollars [spent].”

On the campaign trail and in debates, Trump often talked about the folly of the war in Iraq and the cost to America in lives lost and problems at home left unaddressed. The study in one way supports that assessment.

“Over the past 16 years, by spending money on war rather than in these other areas of the domestic economy,” it says, “the U.S. lost the opportunity to create between 1 million and 3 million additional jobs.”