Defense-related employment and spending, 1996-2006

Monthly Labor Review,  July, 1998  by Allison Thomson

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       Industry                  1977-87    1987-96    1996-2002

Federal general Government        101.8      -308.3      -73.0
Aerospace                         234.2      -264.3      -44.4
Search and navigation
 equipment                        117.5      -119.5      -39.9
Wholesale trade                   115.1       -89.3      -50.6
Electronic components
 and accessories                  135.8      -107.3      -29.8
Construction                       63.9       -67.2      -16.9
Research and testing services      90.6       -45.8      -26.6
Engineering and architectural
 services                          91.5       -34.6      -14.7
Computer and office
 equipment                         29.1       -39.5       -6.9
Ship and boat building
 and repairing                      8.8       -30.8      -14.6
Trucking and warehousing           34.7       -26.1      -16.2
Communications equipment           26.3       -30.4      -10.7
Miscellaneous business
 services                          80.5       -21.6      -16.8
Retail trade excluding eating
 and drinking places               18.8       -21.8      -15.2
Personnel supply services         118.2       -19.9      -24.8

       Industry                   1996-2006     1987-2006

Federal general Government          -73.0         -381.3
Aerospace                           -54.6         -319.0
Search and navigation
 equipment                          -52.2         -171.7
Wholesale trade                     -67.1         -156.4
Electronic components
 and accessories                    -43.0         -150.4
Construction                        -17.3          -84.5
Research and testing services       -33.8          -79.6
Engineering and architectural
 services                           -16.2          -50.9
Computer and office
 equipment                          -10.8          -50.3
Ship and boat building
 and repairing                      -19.0          -49.8
Trucking and warehousing            -19.7          -45.7
Communications equipment            -14.9          -45.3
Miscellaneous business
 services                           -19.5          -41.1
Retail trade excluding eating
 and drinking places                -18.7          -40.5
Personnel supply services           -26.8           -6.9

The ongoing reductions in force strength and infrastructure by the Department of Defense are strategically designed to ensure the success of the Armed Forces in carrying out its missions under a constrained budget climate. The Department of Defense budget plan calls for military spending to be greatly reduced across all categories--personnel, operations and maintenance, procurement, research, development, testing and evaluation, revolving and management funds, military construction, and family housing. However, under a climate of fiscal austerity, the military community faces a significant dilemma of how to invest in technology and weapons modernization programs while meeting current obligations. During the previous decade, as funding shrank, money earmarked for modernization was delayed and redirected to pay current bills for operation and support.(9) In order to replace Cold Warera equipment reaching the end of its service life and to maintain technical superiority with new systems, ongoing investment in modernization, supported by research, development, testing, and evaluation, is essential. To reduce excess operations and maintenance costs further, and to modernize and improve overall readiness by directing available resources to existing forces instead of bases, two more rounds of base realignment and closures are anticipated by the Department of Defense, in 2001 and 2005.(10) Currently, Congress is examining the costs and benefits of maintaining retail activities at military installations.(11)