Facing deep spending cuts, the Department of Defense, including Secretary Leon Panetta, and military-industrial trade associations have complained that tightening the U.S. security budget will cause greater unemployment. And even while toeing the (dubious) conservative line that government spending cannot create jobs, right wingers like Rep. Buck McKeon (R-CA) insist that military spending must stay high to keep unemployment from increasing.
But a new study (PDF) from the University of Massachusetts, Amherst, highlighted by economist Dean Baker shows that, contra the conservative talking point, non-military spending can create more jobs than money going to defense programs. The study’s authors, economists Robert Pollin and Heidi Garret-Peltier of the Political Economy Research Institute, used statistics from the U.S. Department of Commerce, the Bureau of Labor Statistics and other sources to deduce how many jobs are created by public spending in various arenas. Among them, military spending was the lowest, creating fewer jobs per billion dollars spent than even consumer-oriented tax cuts.
Here’s a chart from the study showing how many jobs each area produced from a billion dollars in spending:
Averaged between the three domestic spending priorities of clean energy, health care, and education, those areas create about twice as many jobs per dollar spent as military expenditures. The lower numbers for clean energy and health care spending still create 50 percent more jobs than the military category, and results from putting money into education will mean vastly more employment opportunities.
The paper also weighs the distribution of jobs created over different income levels. Especially with benefits factored in, non-military spending creates jobs at more varied compensation levels, low-, mid- and high-paying jobs. Because spending on the domestic priorities creates so many more jobs, that money will still create plenty of high-paying jobs. The authors conclude that “spending on clean energy, health care, and education will all create many more jobs overall, at all pay levels, than spending on the military.”
Economist Dean Baker, the co-director of the Center for Economic and Policy Research, commented on the University of Massachusetts study on his blog:
In other words, if the point of spending is to create jobs, then the military is the last place that we would want to put our dollars. But, many in Washington believe in the military spending fairy who blesses the dollars spent on the military with unmatched job creating power that has no basis in normal economic analysis.
It turns out that pouring money into the military is not the only way to use public spending to create jobs. It’s also not even close to the best way: Spending on domestic progressive priorities like clean energy, health care, and education could actually accomplish this more effectively.