Defense Growing Sector Of San Diego Economy
Friday, April 22, 2011
The San Diego economy is increasingly dependent on the military. A new report out this week shows about a quarter of the jobs in the region are related to Department of Defense spending.
ALISON ST. JOHN: San Diego is increasingly dependent on the military to keep its economy afloat. A new report out this week shows about a quarter of the jobs in the region are related to Department of Defense spending.
It should be said that the report was commissioned by the San Diego military advisory council, an industry group that works to promote military interests in San Diego.
We're going to talk about the expansion, and whether San Diego can rely on this source of revenue at a time when military budget cuts are being discussed in Washington.
GUESTS: Tony Perry, San Diego Bureau Chief, LA Times
Jim Watters, Defense editor, San Diego Union tribune
JW August, managing editor, 10News
ST. JOHN: San Diego is increasingly dependent on the military to keep its economy afloat. And a new report out this week suggests about a quarter of the job in the region are related to Department of Defense spending. Should be mentioned that the report was commissioned by the san diego military advisory council, SDMAC, and an industry group that works to promote military interests here in San Diego. So we're gonna talk about the expansion and whether San Diego request rely on this source of receive new at a time when military billions are being cut, or cuts are being discussed in wash watch so Jim, how much did the military share of our economy grow over 2008 to 2009?
WATERS: Well, according to this report, the change was over all direct spending was up 12 percent. And that's looking at the government data that was just released recently. And most of that money actually goes to defense contracting companies that manufacture goods. Or work for the military, rather than for the military itself. Although the military payroll here is significant. And the number of, you know, we have 57000 mores, and 27000 sailors in our community, and that direct payroll is a big direct payroll is a big contribution to the economy. But if you look at the overall numbers, most of it is going to north -- general atomics, nasco --
ST. JOHN: Almost 60 percent I saw, amazing.
WATERS: Right. It's an interesting thing because this report is called the military impact study, and really it's the defense industry economic impact, as far as I could tell.
ST. JOHN: Yes. So Eric Gruvald of the National University Institute for Policy Research says that San Diego's economy could be under some severe strains under the next decade if there are cut backs in military investments, and the economy doesn't expand as fast as we hope. Do you think that, J. W, do you think that San Diego is making itself vulnerable by putting so many eggs in the military basket.
AUGUST: I don't think we have much of a choice. They decided to settle down here because they're more concerned with the Pacific rim than they are Europe anymore. So they've moved a lot of their assets to the west coast. And I think we're -- I remember the first round when we started losing defense contractors. What was it? 10, 15 years ago. It hurt us. But we've become more diversified, our base economy, and -- but it would definitely hurt us. We get a lot of money from the military.
ST. JOHN: So we've heard that there's gonna be 21 more ships and 4000 more marines. I think it's 800 more Navy down on north island. When San Diego said yes to Mira Mar remaining a military airport, Tony, young they realized there would be such a major expansion of the military here?
PERRY: No, I don't think that's why people were doing it. The military called in its credibility chits, and people agreed with them, that it made more sense to keep those folks here than to ship them off. We like to call ourselves or I guess we're required to by municipal ordinance, America's finest city. We could just as well call ourselves America's military industrial complex by the sea. That's what San Diego is. It influences San Diego's economy, and its culture and its politics every day, all day. It is the defining feature of this community. Much of it, those young men with those very short haircuts. But also folks that drive over to general dynamics and SAIC, and all the rest of it. It is a bargain with the devil, because military budgets for RN D go up, and they go down. Of the long-term, they do tend to go up. And while we have seen boom and bust because of this in decades past, I think our better bet is that it's going to go up up up, some back sliding, but up even further. Calling for cut backs in military spending is like our other discussion, like calling for cut backs in fire and police. Sounds right because they cost a lot of money, but then when you think about it, yes, but what's the nation supposed to do except protect its citizens? I think San Diego is in good shape to weather economic ups and downs in the future.
ST. JOHN: Jim, I just wanted to ask you a reaction to that.
WATERS: Yeah, just the premise of the question was have we made a bargain with the devil to do this, is if the military went, would something replace it? Where I see it, this gives us a good base, which is a firm base, because it's government, and everybody knows the importance of national defense. And we build off that. So the fact that the military is here doesn't mean it's squeezing something else out.
ST. JOHN: Good. 1-888-895-5727 is the number to join us. And John is calling us from Kensington. Go ahead, John. Of.
NEW SPEAKER: I find it interesting that this study comes out 30 years or 31-year, I think since peat Wilson became mayor in had 1980 and went on a determined drive to diversify, quote unquote, the San Diego economy, setting up the EDC, economic development corporation and making a play to get high-tech companies in, which he did and expanding the tory mesa with UCSD, which he did, yet 30 years later, the military is as big a component, apparently maybe even bigger than it was 30 years ago. So I think your panel has hit it right on the ball. Sure, military budgets go up and down, and people ring their hands periodically about, oh, we're too dependent on the military, but after 30 years, the evidence shows it's like turning around a ship to get San Diego weaned away. So let's just try to keep it going as best we can.
ST. JOHN: And take advantage of it while it's supporting our economy. Tony?
PERRY: This you know we all though, maybe not all though, but a lot of us thought the cold war is over, the Ruskies have decided to beat their swords into plow sheers, hallelujah. Well, it doesn't turn out that way. The world is even more dangerous, and even more jumbled up, take a look at the Middle East and what's happening there. Even as we speak, Libya, yeah, then who knows where that's going? Well al Qaeda get a footprint? If so, how do we guard against that? The world is a very dangerous, very changeable place. San Diego is positioned very well to be right there to protect us three hundred million fat and happy people here.
ST. JOHN: J. W?
AUGUST: Well, and I'm a big flag waver too, and I have to be. But let me put my hat on from the 60s and think about how much we spend on military defense. We spend more on the military than all the countries in the world combined. And I keep looking at the dollar figures, and it's great, and I'm glad we have these jobs and high paying jobs and very skilled people, but I people thinking, well, what if general dynamics spent $1.49 billion on finding possible alternative energy sources? Or maybe something green like? And I know, that sounds like some hippie from the 60s. But --
ST. JOHN: I was gonna ask you that very question.
AUGUST: But I'm always, like wish -- I look at this, and I say, I'm glad, but you know what? It makes me -- I think back to what Dwight Eisenhower said, beware of the military industrial complex and it's here.
ST. JOHN: We are the largest military industrial complex in the world.
PERRY: In our bay, there are 59 US Navy ships. 59. At Pearl Harbor? Pearl Harbor? 29. We live with it every day, so I think like --
ST. JOHN: Doesn't that make you feel safer, Tony?
PERRY: No, in fact, I remember years ago, the LA Times said if somebody starts throwing nukes at us, San Diego's got a bulls eye right on its back. Every day I think we forget how dominant, again, economically, politically, cult really. The military is in San Diego.
ST. JOHN: And Jim?
WATERS: When you talk about the economy too, I don't think you can underestimate the dollars that come in here. Everybody made a big deal about the growth of the biotech industry, how great that is, those good paying jobs. But the fact is, the biotech industry as it is right now, employment is shrinking as a result of these companies going to a new business model of virtual companies where they need fewer scientists to do their own research. So as a result there are other industries that are seen as desirable that also have their own problems. So I think we should really appreciate what we have here as far as the stable, steady flow of dollars into the community.
ST. JOHN: Interesting discussion, yeah, we've run out of time, gentlemen. But thanks very much for your perspectives and we'll keep an on eye on how the military is going. It's certainly, as you say, a growing part of San Diego's identity. Yes. So I'd like to thank Tony Perry, bureau chief, San Diego bureau chief of the LA Times for being with us. Jim waters of the defense editor of the San Diego Union Tribune it was great to have you here for your first time. I hope we have you again. And J. W August, managing editor of ten news. Always great to have you here, J. W.