The Impact of Decreased Department of Defense Spending on Employment in the United States
Abstract
The combined pressures of reduced East-West tensions and large budget deficits in the United States have led to the enactment of reduced defense budgets. Future reductions in spending could be 25 percent less in real terms from fiscal year (FY) 1990 levels. These decreases will affect employment of active duty military personnel, Department of Defense (DOD) civilians, and private-sector defense industries. If the reductions in force structure take place at a controlled rate, the disruption of active duty forces and DOD civilians should be handled by attrition and reduced accessions. The backlog of authorizations and foreign sales will slow any industrial downturn in the defense sector. The rate and magnitude of the defense spending decreases are smaller than in previous postwar cutbacks, and much of the decrease has already taken place since the peak of authorizations in fiscal year 1985. Although certain individuals will be affected by reductions in defense spending, the overall impact upon the economy will be similar to other structural unemployment that occurs as the structure of production in our economy changes. Current job training and economic recovery legislation are sufficient to handle this decrease in spending and transfer of individuals to the private sector. This analysis concludes that these cutbacks by themselves will not significantly affect the US economy in the aggregate, although certain localities, occupations, and industries may encounter short-term difficulties with increased unemployment.
Document Details
- Document Type
- Technical Report
- Publication Date
- Nov 01, 1991
- Accession Number
- ADA271992
Entities
People
- R. T. Roth
Organizations
- Air University