Thursday, February 1, 2007

1 out of 5 San Diego County Jobs Linked to Military Spending.

Study: 1 out of 5 county jobs linked to military spending

By: JOE BECK - Staff Writer

SAN DIEGO ---- Military spending remains a cornerstone of San Diego County's economy and is the second-largest employer in the county, according to a study released Wednesday by the San Diego Regional Chamber of Commerce.

Defense supports nearly one in five jobs in the area, according to the study.

"This does give us a great opportunity to see the contributions the military makes to the local community," said Brig. Gen. Angela Salinas, commander of the Marine Corps Recruit Depot in San Diego. Salinas was one of several military and chamber officials who spoke by telephone to reporters at a news conference following release of the 53-page report.

The study found that defense spending created 148,616 jobs directly and an additional 142,530 jobs through indirect spending, a total of about 290,000 jobs, or more than 20 percent of all regional jobs. The biggest part of military spending went into the manufacturing sector, which claimed $4.5 billion, nearly 25 percent of total defense expenditures in the area.

The study showed spending by the Defense Department pumped $18.3 billion into the San Diego area in 2004, the last year for which statistics were available. The $18.3 billion constitutes 14.7 percent of the total regional economy, according to the study. Of the $18.3 billion benefit, $11.7 came from direct expenditures and the remainder through spin-off effects.

The study was compiled using statistics on defense procurement contracts, expenditures by military bases and expenditures on salaries, retirement and disability benefits among active-duty service members and civilian employees of the military.

The regional chamber has been a stalwart supporter of military bases in the county. Though the chamber lobbied against base closures, it voted by a slim margin to oppose the military's position on a ballot measure to put a civilian airport on Miramar Marine Corps Air Station.

Military and chamber officials said they conducted the study to obtain a comprehensive set of statistics on the effect of military spending on the San Diego area that could be used for several purposes, including lobbying politicians at the local, state and national levels on military spending.

The study cited Science Applications International Corp. and National Steel & Shipbuilding Corp., both in San Diego, as the leading military contractors in the area.

The study showed that research and development, often cited by economic development experts as the most desirable form of economic activity, lagged well behind procurement contracts among categories of defense spending. Salaries and wages, retirement and disabilities and base expenditures were also much more significant sources of spending, the study said.

The study concluded that military spending is a crucial part of the local economy, despite a trend toward greater diversification in the last two decades.

"Even with a substantial portion of the military forces deployed outside the region, the military is still the second-largest employer in the county," the report said.

The report broke down the effect of military spending by branches of the military and installations. The Navy accounts for 65 percent of the economic activity generated by military spending and the Marine Corps accounts for 23 percent, according to the study. Of the naval bases, Point Loma registered the biggest impact, accounting for $5 out of every $100 in the regional economy and three out of every 100 jobs. The Marines' Camp Pendleton contributed $3.1 billion in economic output and supported almost 2 percent of all jobs in the region.

Rear Adm. Len Hering, commander of Navy Region Southwest in San Diego, said the fresh statistics will also help in community planning.

The study identified several future projects that are expected to make major contributions to the area economy. The biggest effect is likely to come from the Navy's Broadway complex in downtown San Diego, a collection of seven buildings offering office, hotel, retail and public space that the study projects as creating 22,000 jobs for the local economy.

Increases in the size of the Navy and Marine Corps were also cited as sources of future growth.

For example, the federal government wants to expand the Marine Corps from 175,000 active members to 202,000 in the next five years, an initiative that could bring up to 13,000 more recruits to the Marine Corps Recruit Depot and 4,988 more Marines to Camp Pendleton, according to the study.

The study said each Marine at Camp Pendleton generates $83,500 in economic activity.

"Assuming there is no change in this figure, future force level increases may generate between $62 (million) and $417 million per year in economic output for the San Diego regional economy," the study said.

-- Contact staff writer Joe Beck at (760) 740-3516 or

Study: 1 out of 5 county jobs linked to military spending

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