New Report Predicts Widespread American Job Losses

Government Employees, Teachers, Nurses Among At-Risk Workers

Arlington, Va. — A new economic impact analysis concludes that 2.14 million American jobs could be lost if the Budget Control Act’s sequestration mandate takes effect on January 2, 2013. That is the date that budget cuts of $1.2 trillion start throughout government unless Congress and the administration agree on a solution.

Dr. Stephen S. Fuller, Dwight Schar Faculty Chair and University Professor and Director for Regional Analysis at George Mason University, in conjunction with Chmura Economics and Analytics, conducted the study on behalf of the Aerospace Industries Association.

“The results are bleak but clear-cut,” said Fuller. “The unemployment rate will climb above 9 percent, pushing the economy toward recession and reducing projected growth in 2013 by two-thirds. An already weak economy will be undercut as the paychecks of thousands of workers across the economy will be affected from teachers, nurses, construction workers to key federal employees such as border patrol and FBI agents, food inspectors and others.”

The analysis concludes that the automatic spending cuts mandated in the Budget Control Act of 2011 affecting defense and non-defense discretionary spending in just the first year of implementation will reduce the nation’s GDP by $215 billion; decrease personal earnings of the workforce by $109.4 billion and cost the U.S. economy 2.14 million jobs.

“This report shows that sequestration is not just a defense problem, it’s an American problem,” said AIA President and CEO Marion C. Blakey. “Unless our leaders in Washington take action, massive cuts have the potential to devastate our economy. In addition, more than one million defense-dependent jobs on the line will risk our national security, economy and the technological innovation that keeps America Second to None.”

According to “The Economic Impact of the Budget Control Act of 2011 on DOD and Non-DOD Agencies,” 48,059 jobs in healthcare, 98,953 in construction, 473,250 in manufacturing and 617,449 federal jobs are at risk. The study outlines the impacts in all 50 states with California, Virginia and Texas experiencing the largest potential jobs loss and most states taking five-digit job losses.

The threat of sequestration is bringing many voices to the table. At the July 17 press briefing releasing the numbers, participants said:

Senator Kelly Ayotte (R-NH): “Military leaders have been clear that defense sequestration will deprive our troops of the resources they need and undermine our national security for generations,” said Senator Ayotte, Ranking Member of the Senate Armed Services Readiness Subcommittee. “This new study underscores that sequestration will also crush our economy, devastate our defense industrial base, and put tens of thousands of Americans out of work. Republicans and Democrats must work together now to find alternate spending reductions that will not add a national security crisis to our fiscal crisis.”

Senator Jeanne Shaheen (D-NH): “I want to thank the AIA for conducting this study, which looks at this question in the proper context of the entire problem. Focusing on only one half of the problem creates the impression that we only need half a solution, but that won’t work,” Shaheen said. “We cannot continue to avoid tough decisions on the future of our debt and deficit. We should continue to work on a comprehensive solution that puts everything on the table. It’s the right thing to do for our national security, for our economy, and for our people.”

Phoenix Mayor Greg Stanton: “The report’s findings are proof that Arizona faces serious job loss – nearly 50,000 high-wage jobs – at the expense of Congress’s failure to deal with looming, indiscriminate cuts to our aerospace and defense industries,” Phoenix Mayor Greg Stanton said. “We can’t afford to take that kind of a hit. We know some cuts will happen, but we need to be strategic, propose a solution and protect jobs to keep our momentum going forward out of the recession, not backward.”

San Diego Mayor Jerry Sanders: “Like every other city in the country, San Diego has been struggling to recover from the worst national recession in nine decades. Arbitrary, politically motivated cuts to the national defense budget are the last thing our city needs right now, given that a quarter of all jobs in this region are tied to the defense industry.