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Ron L. Hetrick
Defense spending cuts in the United States are largely attributable to the end of the cold war era and the disintegration of the Soviet Union. Private sector defense contractors reacted to those cuts by dismissing large numbers of workers and expanding sales into civilian markets. Industries that had relied heavily on defense spending for both research funds and sales have been forced to reevaluate and redefine their roles in the global economy.
This article explores recent employment trends in high-tech defense industries and implications that current efforts might have for jobs in the future.
What is high-tech defense?
There are four manufacturing industries most often
referred to as "high-tech defense."1
The first two, aircraft and parts and guided missiles and space
vehicles, are collectively known as the aerospace industry, which
designs and constructs both the bodies and complex integrated
electronics and guidance systems in aircraft, missiles and
rockets.2 Next is the ordnance and accessories industry which
designs and assembles many of our "smart" bombs and
weaponry bodies. Finally, there is search and navigation
equipment manufacturing in which radar, sonar, infrared homing,
and many other tracking and locating systems are designed and
built. High-tech defense industries have been defined by (1) the
number of technology workers employed as a proportion of total
employment and/or (2) the ratio of research and development
expenditures to sales.3 As a group, these
four industries had nearly 20 percent of their employment in
high-tech occupations in 1993, as compared with 8 percent in all
manufacturing industries.4 Also, while research and development spending as a
percentage of sales averages a little more than 4 percent for all
of manufacturing, these defense high-tech industries average 11.2
percent. 5
All four of the high-tech defense industries manufactured at least 50 percent of their output for defense purchases in 1987, the peak year for U.S. Department of Defense expenditures. However, all four, especially aircraft, have private sector demand that is critical to their employment as well. As time has passed, all four industries have experienced large declines in the proportion of their products that go to defense purchases.6 The decline in defense spending along with the private sector recession in 1990-91 have been the dominant factors in the employment losses experienced since 1987.
This excerpt is from an article published in the August 1996 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.
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Footnotes
1 Richard W. Riche, Daniel E. Hecker, and John U. Burgan,
"High technology today and tomorrow: a small slice of the
employment pie," Monthly Labor Review, November
19983, pp. 50-58.
2 The aircraft and parts industry constitutes SIC 372, while guided missiles makes up SIC 376 in the Standard Industrial Classification system. See Standard Industrial Classification Manual, 1987 (Washington, DC, Office of Management and Budget, 1987).
3 Riche and others, "High technology," pp. 52-53.
4 High-tech occupations and defined as: engineers and related technicians, physical scientists and related technicians, computer scientists and related occupations, and mathematical scientists and related occupations. Data are from the Bureau of Labor Statistics, Office of Occupational Employment Statistics.
5 Data exclude ordnance and accessories because of the unavailable of that data. Data are from the National Science Foundation/SRS, Survey of Industrial Research and Development, 1992.
6 Analysis done by Bureau of Labor Statistics, Office of Projections.
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