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E CONOMIC C ONVERSION IN MD Taking StepsTowards a New Economy.

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Presentation on theme: "E CONOMIC C ONVERSION IN MD Taking StepsTowards a New Economy."— Presentation transcript:

1 E CONOMIC C ONVERSION IN MD Taking StepsTowards a New Economy

2 W HAT I S “E CONOMIC C ONVERSION ”? Also called “defense transition”

3 M OVE FROM A MILITARY - DOMINATED ECONOMY TO A CIVILIAN ECONOMY

4 Holding harmless the workers and communities that are now dependent on military spending

5 W HY DO WE NEED ECONOMIC CONVERSION ?

6 A M ILITARIZED E CONOMY : U NPRODUCTIVE Money to finance weapons and wars displaces productive investment and uses up national resources

7 A M ILITARIZED E CONOMY : I NEQUITABLE Money spent on the military is diverted from social goods (e.g., education, health care) A strong economy requires strong people—and investment in people

8 A M ILITARIZED E CONOMY : P RODUCES F EWER J OBS U.S. J OB C REATION WITH $1 B ILLION 8 Number of Jobs Created Education Health Care Clean Energy Consumption Military Source: Pollin & Garrett-Peltier, 2009

9 A M ILITARIZED E CONOMY : P UTS B USINESS AT A C OMPETITIVE D ISADVANTAGE Source: National Science Foundation

10 A M ILITARIZED E CONOMY : B AD FOR A LL OF U S The more a country spends on the military relative to its economy: The slower the economic growth The higher the unemployment The slower the productivity growth 10 Source: Council on Economic Priorities

11

12 I S T HE U.S. E CONOMY MILITARIZED ?

13 W HERE Y OUR 2012 I NCOME T AXES W ENT 13 Source: New Priorities Project

14 M ILITARY E XPENDITURES P ER C APITA 14 Source: Friedman and Preble

15 A MONG A LL C OUNTRIES, W E ARE N UMBER O NE IN MILITARY SPENDING, BUT : 11 th : Percent of year-olds who have graduated high school 22 nd : Broadband Internet access 24 th : Life expectancy at birth 32 nd : Infant mortality rate 48 th : Quality of K-12 science and math 15 Sources: National Academies Press; UN Social Indicators

16 16 Source: National Priorities Project

17 U.S. M ILITARY S PENDING VS. O THER C OUNTRIES, I N R ANK O RDER, FY Billions of Dollars Source: Computed from SIPRI

18 18

19 “D EFENSE ” S PENDING ? From the Cato Institute: “In a literal sense, the United States does not have a defense budget. The adjective is wrong... Our global military posture and activism drag us into others’ conflicts, provoke animosity, cause states to balance our power, and waste resources. We need a defense budget worthy of the name.” Source: Cato Web Site

20 A BOUT T HAT D EFICIT... 20

21 U.S.—A RMS D EALER TO THE W ORLD Arms Transfer Agreements with the World By Supplier, 2011 Source: Congressional Research Service, Aug. 2012

22 2013 R EPORT C ARD FOR U.S. I NFRASTRUCTURE A MERICAN S OCIETY OF C IVIL E NGINEERS AviationD BridgesC+ DamsD Drinking waterD EnergyD+ Hazardous WasteD Inland waterwaysD- LeveesD- PortsC Public Parks & RecreationC- RailC RoadsD SchoolsD Solid WasteB- TransitD WastewaterD Source: American Society of Civil Engineers

23 I SN ’ T M ILITARY S PENDING G OING D OWN ? Sequester: $500 bn cut over 10 years—17% in real terms Will bring spending down to 2006 level Source: Friedman & Logan ;

24

25 W HAT ABOUT IN M ARYLAND ?

26 M ILITARY JOBS IN MD 17 federal military facilities located in MD: 118,022 workers Military contractors in MD: 91,000 workers MD Dept of Business & Economic Development, 2009; Deloitte, 2012

27 M ILITARY C ONTRACTOR J OBS, M ARYLAND VS. U.S. MD Dept of Business and Economic Development

28 E XECUTIVE P AY VS. W ORKER P AY : M ILITARY C ONTRACTORS IN MD Source: Bloomberg

29 S OME I NDICES OF M ILITARIZATION IN MD 2011 D ATA 4.12%: Pentagon contracts as percent of MD state GDP $10.9 billion: Contract money awarded to MD military contractors $36 billion: Amount of money generated in MD by major military installations $1,868: Pentagon prime contracts per capita in MD 4 th : Maryland’s rank among states in per capita defense spending Sources: Deloitte, *National Priorities Project; Hartung & Peterson; MD Dept of Business and Economic Development Amount of money MD taxpayers will send to the Pentagon in 2014: $11.7 billion*

30 2013 R EPORT C ARD FOR MD I NFRASTRUCTURE A MERICAN S OCIETY OF C IVIL E NGINEERS Transit: C- Roads: C- Dams: C Bridges: B- Stormwater: D Baltimore: Drinking Water: C- Wastewater: C Source: American Society of Civil Engineers, 2013

31 H OW CAN WE ACHIEVE ECONOMIC CONVERSION ?

32 R EBUILDING A MERICA We want to cut military spending and at the same time rebuild, reindustrialize— and we want to do it with union workers

33 2013 R EPORT C ARD FOR U.S. I NFRASTRUCTURE A MERICAN S OCIETY OF C IVIL E NGINEERS Estimated investment needed by 2020, to get to a grade of B: $3.6 trillion Jobs: Increase by 3.5 million Personal income: Increase by $3,100 annually GDP: Add $3.1 trillion

34 Rebuild infrastructur e

35 Support Green Energy and Alternative Institutions  Local  Sustainable  Publicly financed

36 U NION S UPPORT FOR E CONOMIC C ONVERSION

37 IAM* C ONVENTION C ALLS FOR E CONOMIC C ONVERSION P ROGRAM (A DOPTED M AY 6, 2013) RESOLVED... create and fund a working committee... to examine and consider various proposals for a national planned Economic Conversion Program... RESOLVED... incorporate into our political goals the recommendations of that committee; RESOLVED that the Local Lodges... of our Union coordinate political efforts with this committee and support and pursue its recommendations. *International Association of Machinists

38 CWA* N ATIONAL R ESOLUTION ON E CONOMIC C ONVERSION (A PRIL 2013) Resolved:... CWA supports repurposing non- essential military spending to fund programs that rebuild America through the development of new sustainable technologies and 21st century manufacturing, construction of affordable housing, modernization of our nation’s physical and social infrastructure, and the deployment of universal high-speed broadband to all Americans. *Communication Workers of America Source: USLAW

39 NEA* C ONVENTION C ALLS FOR E CONOMIC C ONVERSION, A UG The NEA... calls for a change in the nation's course and priorities by endorsing a national budgetary strategy that increases tax revenues for the wealthy and large corporations, emphasizes conversion from military spending to peacetime employment, creates stable jobs at living wages, linking such a program to public education... *National Education AssociationSource: USLAW

40 AFSCME* R ESOLUTION ON E CONOMIC C ONVERSION (J UNE 2012) BE IT RESOLVED, that AFSCME calls on the U.S. Congress and the President to... significantly cut the Pentagon budget, and use that money to fund education, public and private sector family-sustaining job creation, special protections for military sector workers, environmental and infrastructure restoration, care for veterans and their families, and human services that our cities and states so desperately need; *American Federation of State, County and Municipal Employees Source: USLAW

41 UE* R ESOLUTION, O CT Demands that the Obama administration invest in peace by building economic security, in particular: A substantial reduction in the military budget... The immediate redeployment of these savings into the nation’s transportation system, housing, healthcare, education, environmental protection, renewable resource development, and other peaceful infrastructure... The conversion of defense industries to production for industrial and consumer use... *United Electrical, Radio and Machine Workers of America Source: USLAW

42 W HAT CAN WE DO IN M ARYLAND ? Establish a “Commission on Maryland’s Future” Encourage local planning Strengthen our grassroots coalition: Fund Our Communities, Not the Pentagon

43 T HE C OMMISSION ON M ARYLAND ’ S F UTURE To be established by the state legislature To be composed of representatives of labor, business, environmental advocates, peace advocates Task: Chart a sustainable economic future for MD in infrastructure improvements and reindustrialization and in the emerging clean energy sector, to replace economic dependence on military spending

44 W HY WE NEED A COMMISSION : T O HELP MD ADAPT TO CHANGES IN F EDERAL SPENDING I MPACT IN MD OF S EQUESTRATION, ,000 jobs lost $1.3 billion in labor income lost $2.6 billion in Gross State Product lost 58,000 jobs lost $3 billion in labor income lost $5.9 billion in Gross State Product lost Pentagon CutsDomestic Cuts Source: Fuller

45 W HY WE NEED A COMMISSION F OR A COMPETITIVE ADVANTAGE, TO BRING MORE AND BETTER JOBS TO THE STATE The Commission will develop a framework to convert military-related jobs to non-military industries, keeping our skilled workers and ensuring a strong economy in MD The Commission can examine the economic impact of cuts to domestic Federal spending in the state and how to address these

46 W HAT W OULD THE F UTURES C OMMISSION D O ? Analysis, leading to a policy report Advise the governor’s office Advise the state legislature Public education and public engagement Provide opportunities for the people to plan a new economy—economic democracy Develop strategies to help workers and communities that are dependent on military spending

47 L OCAL P LANNING : E NCOURAGE L OCAL G OVERNMENTS TO ESTABLISH FUTURES COMMISSIONS AND TO A PPLY FOR D EVELOPMENT G RANTS Community planning: Commerce Department grants for communities undergoing dislocations-- to examine new areas of economic development. Finance: Commerce, Energy and Treasury Departments—grants for economic development focused on clean energy and transportation.

48 P ARTNERSHIPS FOR A DVOCACY : F UND O UR C OMMUNITIES, N OT THE P ENTAGON

49 B ECAUSE WE ’ RE ALL IN THIS TOGETHER !

50 E CONOMIC C OSTS OF M ILITARISM : We have less to invest in new businesses and new ways of doing things—our economy is weaker. We have less to spend on health, education, infrastructure, art and culture. We all have to work harder and longer hours, just to stay even. We endanger the climate and the ability of human beings to live on earth. 50

51 I T ’ S A C HOICE : M ILITARISM OR A N EW E CONOMY 51

52 E CONOMIC C ONVERSION : M OVE FROM A MILITARY - DOMINATED ECONOMY TO A CIVILIAN ECONOMY

53 Fund Our Communities, Not the Pentagon

54 S OURCES American Society of Civil Engineers: Bandow: Bloomberg: Cato Web Site: Congressional Research Service, Arms Transfers: Corpwatch: Deloitte: Friedman & Logan: “Why the U.S. Military Budget is Foolish and Sustainable,” 2012: budgetpolicyhttp://www.cato.org/research/defense- budgetpolicy Fuller, Stephen, The Economic Impact of Sequestration Budget Cuts to DOD and Non-DOD agencies as Modified by the American Taxpayer Relief Act of 2012," Center of Regional Analysis, George Mason University, March 14, Hartung & Peterson, “Minimum Returns: The Economic Impact of Pentagon Spending,” 13.pdf 13.pdf Hellman, Chris: Institute for Policy Studies: MD Dept of Business and Economic Development: and MD Dept of Business and Economic Development: National Priorities Project: National Science Foundation, Science and Engineering Indicators, 2012, chart 4-45: Think Progress: USLAW: World Bank:


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