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What a Looming $1 Trillion Pentagon Budget Means for Jobs

Historical figures suggest the answer is not much.

Words: Taylor Barnes
Pictures: Nell Srinath
Date:

Despite much-ballyhooed promises to cut government spending, the newly inaugurated Trump administration has given little indication it plans to apply that anti-waste zeal to the largest recipient of the federal discretionary budget: the Pentagon and its contractors. 

The defense budget, already slated to be $895.2 billion in 2025, is steadily marching toward the eye-watering $1 trillion mark. Both Trump-allied allied lawmakers in a Republican-controlled Congress and Trump’s own nominees seem on board with that.

Earlier this month, during a hearing that largely focused on Fox News host-turned defense secretary nominee Pete Hegseth’s drinking, sexual assault allegations, and scant managerial experience, the nominee had an exchange with spending hawk Roger Wicker, a senator from Mississippi, that evidenced the soon-to-be Pentagon chief’s commitment to protecting the his department’s budget from cuts:

Wicker: And you have noted correctly that the current trend line of defense spending falling below 3% of our GDP is a threat to national security. You also said building the strongest and most powerful military in the world must be done responsibly, but it cannot be done on the cheap. You still agree with that, do you not?

Hegseth: Yes, sir, I do. … Going under 3%, Mr. Chairman, is very dangerous.

Largest Military Budget in the World

In addition to plainly saying they want to continue increasing Pentagon spending, there’s then the glaring conflicts of interest surrounding the Trump administration, backed by billionaires like Elon Musk, whose SpaceX venture is a beneficiary of Pentagon contracts and the so-called Department of Government Efficiency’s ties to a lobbying firm for mega-defense contractors like General Dynamics and Honeywell.

On this beat, we cover the people and places tied up in this defining feature of American life, a military budget that is larger than the next nine countries combined. Wicker’s own spending hawkishness underscores the parochial politics that are behind much of Congressional support for that budget. His state is the poorest in the entire nation — and also one of the most economically dependent on weapons and military spending, ranking fifth nationwide by how much of its GDP is reliant on an injection of Pentagon spending.

Will the coming military buildup create, in places like Mississippi, “good manufacturing jobs and good wages,” like the Trump administration claimed last time around?

Defense Industry Jobs Plummet

Last year, a few advocacy and watchdog groups asked me to prepare a presentation about jobs tied up in the military-industrial complex. I focused on those that stem from private defense contracting, which accounts for about one-third to a half of the entire defense budget in a given year.

What’s the takeaway? Despite perpetually increasing defense budgets, the industry has hemorrhaged jobs. 

Here’s one astounding measure of that. According to the National Defense Industrial Association (NDIA), a nonprofit that publishes an annual x-ray of the defense industry called “Vital Signs,” an estimated 3.2 million people were employed in the private defense industry in 1985, during the Reagan-era military buildup. By 2020, that number was just 1.1 million.

Despite perpetually increasing defense budgets, the industry has hemorrhaged jobs. 

Put another way: The defense budget was about 20% higher in 2020 than 1985, comparing inflation-adjusted budgets, and nonetheless the employment it produced was just one-third of that Reagan-era level. Over the same time period, average compensation in the industry also dropped, from $100,500 to $96,994, according to the NDIA. The industry shed two million jobs over that time frame, lowered the pay for the ones that remained, and politicians still talk about defense spending as a job-creator. 

Union Strength Declines

What may be behind those figures? Unionization rates at the top defense contractors have plummeted, with Lockheed Martin, nowadays the world’s largest defense contractor and the largest corporate recipient of US taxpayer money, having had 69% of its workforce represented by unions in 1971.

Nowadays, that number is just 19%. At Northrop Grumman, a major beneficiary of the United States’ renewed nuclear arms race as the world’s largest nuclear weapons manufacturer, just 4% of its workforce is unionized. Those labor trends go hand-in-hand with defense contractors favoring “right-to-work” states in their expansions and relocations, and companies like Lockheed Martin subcontracting out functions that used to be performed by union members.

And the jobs that remain in that slimmed-down defense contracting workforce are often concentrated in industry hubs like Dallas-Fort Worth, St. Louis, Huntsville, Alabama, and Washington DC, meaning that large swaths of the country hardly register on the map of the military-industrial complex. 

Those jobs also aren’t evenly distributed across demographics, and if the Trump administration hasn’t made it clear enough, they’re no fans of diversity, equity and inclusion anywhere, let alone at defense contractors. None of the top five Pentagon contractors have a workforce that is more than 25% women, and those same companies have workforces that are just 30-38% people of color, according to their forms 10-K. Put another way: A fair number of white men.

“Stealing Jobs that Could be Ours”

Why doesn’t such a tremendous budget create more employment? Economist Heidi Peltier has calculated that for several reasons — including the capital-intensive nature of the industry (think: ships and missiles and fighter jets) that means less money goes straight to salaries — military spending is one of the poorest ways to create jobs. According to Peltier, for every $1 million invested by the government, the defense industry creates seven jobs. The same amount invested in clean energy or infrastructure creates 10 jobs. Labor-intensive industries like healthcare and education create even more.

Perhaps relatedly, policy scholar Miriam Pemberton has observed that local economic dependence on the Pentagon is associated with poverty. Her study showed that in the top three defense-dependent counties in top 20 defense-dependent states, poverty exceeded the national average in about half.
Workers themselves are catching on about the job creation inflation that political figures employ to defend Pentagon spending — a line I suspect we’ll hear plenty as that $1 trillion milestone approaches.

“Those who are using our names to excuse their votes for corporate interests are, in effect, stealing jobs that could be ours,” Machinists labor leader and defense contractor David Story wrote in The Nation, referring to the job creation tradeoffs laid out by Peltier. Story added: “The next time a politician claims that they’re funding endless war for the sake of jobs, we defense industry workers must stand up and say, ‘Not in our names’.”

Taylor Barnes

Field Reporter

Taylor Barnes in Inkstick Media's field reporter for military affairs and the defense industry. She is a grantee with the Ploughshares Fund and is based in Atlanta. Follow her work at @tkbarnes. Tips? tbarnes@inkstickmedia.com

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