Manufacturers: Defense Cuts Would Cost More Than 56,000 Florida Jobs

Study Highlights Harm on Manufacturers and Economic Activity

Today the National Association of Manufacturers (NAM) and the Associated Industries of Florida (AIF) collaborated for a media roundtable to discuss the impact of cuts to defense spending. Held at the National Center for Simulation, the roundtable featured an in-depth look at the effect of the cuts on Florida, the national economy and individual manufacturers. The NAM and AIF were joined by AAR CORP., an aerospace manufacturer and defense contractor that employs more than 1,600 Floridians at facilities in Melbourne, Miami, Jacksonville, and Clearwater.

The NAM’s recent report, Defense Spending Cuts: The Impact on Economic Activity and Jobs, highlights the potential impact defense spending cuts under the Budget Control Act (BCA) of 2011 will have on U.S. jobs and economic growth.  According to the report, Florida is one of the top 10 states most impacted with an estimated 56,600 jobs forecasted to be lost.

“This is a national problem, but it hits especially close to home for Floridians,” said AIF President and CEO Tom Feeney. “With Florida set to lose approximately 56,000 jobs in 2014 alone, the pain from these cuts will be felt across the state. These manufacturing, aerospace and defense jobs are high-tech, high-wage positions that pay substantially better wages than the average Florida income. Manufacturing jobs generally pay 55 percent more than other non-farm employment. Jobs lost in these sectors also have a trickle-down effect on the more than 900,000 Florida jobs indirectly connected to the vitality of our manufacturing industry.”

Nationally, the report’s findings paint a stark picture of the potential harm the BCA budget caps and across-the-board cuts under sequestration would have—a loss of 1,010,000 private sector jobs, including 130,000 manufacturing jobs, by 2014. This job loss would increase the unemployment rate by 0.7 percent and decrease GDP by almost 1 percent by 2014. The report shows that the long-lasting effects of these cuts will be felt by not just the defense equipment supply chain, but also the everyday Americans who are protected by these products.

“If policymakers in Washington allow the United States to fall into the fiscal abyss, we’re headed toward a second recession that threatens an economy already on its knees,” said NAM Vice President of Tax and Domestic Economic Policy Dorothy Coleman. “The looming defense cuts will deal a devastating blow to the supply chain of manufacturers, and it is essential that action is taken immediately to prevent the loss of more than 1 million jobs. To address our debt issues, policymakers must take on the real drivers of our national debt—entitlement programs— and not allow indiscriminate cuts that threaten both our economic and national security.”

These cuts and the subsequent job losses would be particularly harmful to a wide range of manufacturing industries that are direct and indirect suppliers of defense equipment. The largest losses would be in large nondurables and transportation equipment, including the aerospace industry that will lose 3.4 percent of its jobs, the ships and boats industry that will lose 3.3 percent of its jobs and the search and navigation equipment industry that will lose 9.3 percent of its jobs. Business leaders are already taking steps to reduce payroll to prepare themselves for the cuts ahead.

“The threat of the defense cuts and the uncertainty in our economy has forced defense manufacturers to slow their growth rather than invest more in their businesses and employees,” said Christine Wayne, government affairs manager with AAR CORP. “The innovation and products that keep us safe, both at home and abroad, are at risk because of these proposed cuts. It’s a risk Floridian businesses can’t afford to take.”

Click here to read the summary of the Defense Spending Cuts report.

Click here to read the full report.

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