aerospace

Defense cuts could further dim US jobs picture

June 21, 2012 at 7:39 AM ET

As the war in Afghanistan winds down, the impact on the nation’s employment picture goes beyond veterans returning home who are looking for work.

There are thousands of civilian jobs related to the war effort, and cutbacks in defense spending have already led to reductions in these defense-related jobs, including direct government positions or those with defense contractors. The loss of these jobs isn’t good news for the still-dim employment picture.

“It will create a greater supply of workers and create more pain overall for the U.S. work force,” said Gautam Godhwani, CEO of jobs website SimplyHired.com.

For May, the number of openings for defense-related jobs across the Web, including job boards and company jobs sites, declined by 4.2 percent compared to the previous month, according to SimplyHired.com research. And unless Congress acts to curb some of the projected defense cutbacks, he added, things will only get worse next year.

Indeed, Boeing officials recently warned that any further cutbacks to defense spending could devastate the defense industry and lead to thousands of jobs lost. 

The decline in defense and aerospace employment has already begun. Last year, contractors shed nearly 35,000 jobs, and through May nearly 11,000 more have already disappeared, according to a report from Challenger Gray & Christmas released this week.

There has also been a significant downsizing of civilian workers at the Department of Defense, which saw its work force drop to 790,000 from more than 800,00 in fiscal year 2011, stated a report from the department's comptroller.

And the number is expected to drop further. A story in FederalTimes.com from December reported that in the next decade the Department of Defense’s civilian work force will plummet by 20 percent to 630,000, “the smallest since the Defense Department's creation in 1947.” 

The combination of the war winding down, vets returning to the work force, cutbacks in defense-related industries and the inevitable reductions by their suppliers, Godhwani said, all add up to a recipe for fewer job opportunities.

But, he maintained, some states and occupations will benefit from the influx of more civilian workers with defense-related skills.

For example, in cities such as Detroit and Las Vegas,  the number of workers for each job opening is about five to one, compared to Washington, D.C., and Boston where there are one or two individuals for every job, Godhwani said.

Also, he added, workers with specialized skills in defense-related industries, including technology and engineering, could be hired by employers who are having difficulty filling jobs.

Among defense-related occupations, all of the top 10 have been declining since 2009 and are expected to decrease even further through 2015, according to a 2011 Secretary of Defense report titled “Defense-Related Employment of Skilled Labor.” These occupations include business and financial, record-keeping clerks, construction trades, maintenance and computer specialists.

Even if some of these workers are able to fill a talent gap in the civilian work force, overall it’s going to be tough to add more jobless individuals to the long lines of the nation's under- and unemployed.

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