The Bay State’s economy has benefited from a decade-long surge in defense spending, but that sector’s labor force is now threatened by potentially massive military budget cuts that are set for next year, the author of a new study warned Monday.
“It could be up to 30,000 jobs at risk,” said Marty Romitti, director of economic and public policy research at the University of Massachusetts’ UMass Donahue Institute, which prepared the report for the Defense Technology Initiative. “If it ends up being that significant, what you’ve done is you’ve essentially taken away all the jobs that have been gained by the Massachusetts recovery over the last several years.”
Last year, Massachusetts received nearly $13.9 billion in contracts from the US Departments of Defense and Homeland Security. That’s down from a peak of $15.5 billion cq in 2009,but still 83 percent more than in 2003. The increase reflects a surge in spending on the wars in Iraq and Afghanistan, and on systems to defend against terrorist attacks.
Defense expenditures generated about 130,000 jobs in the state, with a total payroll of $9.7 billion. Romitti said that the number includes 47,000 people directly employed by defense contractors and another 71,000 jobs at other companies that provide goods and services to the defense firms.
Massachusetts also benefits from strong defense spending in the rest of New England. The region’s other five states attracted $20 billion in military contracts last year. Romitti said that about 11,500 Massachusetts jobs comes from money spent here by out-of-state defense contractors. “
The fact that they’re getting jobs in Connecticut, for instance, means that businesses in the Pioneer Valley are benefitting,” Romitti said.
Massachusetts builds a lot of military hardware--General Electric Co. makes jet engines in Lynn, for instance, and Waltham-based Raytheon Co. cq is a major producer of guided missiles. But the single biggest chunk of money, 26 percent of the total, goes to research and development of new military technologies, at places such as the Charles Stark Draper Laboratory Inc. in Cambridge.
“It’s really developing those next generations of weapons systems,” said Romitti, “keeping America out ahead of the rest of the world.”