Does Anybody Care About the State’s Defense Workers? : With layoffs looming, they need new training and jobs--and deserve both
For too many California workers, the end of the Cold War is a mixed blessing. The so-called peace dividend eludes them as they face more layoffs at local defense firms because of possible new cutbacks by the Pentagon. The truth is that if there is to be any peace dividend for California, it will probably have to be of the state’s own making.
That means Sacramento needs an aggressive plan--a strategy to create new jobs to replace those lost in the downsizing of the defense industry. Welcome and needed efforts are already under way to create a more attractive business climate, but that’s not sufficient.
The state economy may be diversified, but not enough to totally offset the shock of massive restructuring not only in defense but in other traditional California industries too. The state Commerce Department must mount an effort to lure new industries to absorb unemployed defense workers and to provide for expanded retraining programs for aerospace workers. Other states have succeeded with economic development plans, too often by luring away California’s businesses.
California ranks 10th among states likely to be seriously hurt by specific defense spending cuts that were in the works at the end of 1990. Now the Pentagon is scaling back again. Times staff writer Melissa Healy reported the Pentagon may freeze virtually all future defense programs after the research and engineering stage, which means weapons production could be postponed. The Pentagon initiative, to be unveiled this month, would end an era when defense contractors maintained a large force of skilled workers and received most of their profits from the production phase of contracts. While research and engineering staffs are likely to benefit, the outlook for production workers is bleak.
The Pentagon initiative would accelerate a decline in California’s defense industry that began in the mid-1980s. Since 1986 California has lost 60,000 aerospace/defense jobs. And 90,000 related jobs are gone, too. A report by the Los Angeles Area Chamber of Commerce forecasts a 20%-to-25% cut in total defense expenditures over the next five years--even before the Pentagon’s new initiative. All the more reason to seek out new opportunities that might facilitate California’s defense conversion and make maximum use of highly skilled aerospace workers.
The logical first step toward replacing defense jobs is to look at emerging businesses trying to make products that meet demands of state environmental and mass transit policies. Take electric or rail cars; or consider clean industries such as biotechnology. In Los Angeles County, two nonprofit organizations have created the Aerospace Industry Task Force to track laid-off defense workers and to identify new training opportunities for them.
Securing adequate retraining funds is crucial to helping workers. It costs $2,500 to $3,500 to retrain an aerospace factory worker. California needs retraining funds. State efforts are funded by unemployment taxes paid by employers, but they are hardly adequate. California secured $7 million in federal funds last year to retrain aerospace workers. The state is applying for a share of $150 million in retraining funds authorized by Congress to help communities and workers affected by defense cutbacks. More is needed, and that’s a job for the members of California’s congressional delegation. It’s their job to get federal aid for California’s laid-off workers.
Without a coordinated effort to offset the decline in the defense industry, California’s industrial base is likely to erode further. Avoiding that erosion will take long-term vision and planning--a task for the governor and Legislature. And for the congressional delegation.
Defense: State’s No. 1 Employer * (Thousands of direct employees in California) Aerospace/defense: 485 Financial institutions: 404 Agriculture: 366 Real Estate: 204 Motion pictures: 107 * Aerospace / defense 1990, all other 1989
Source: EDD; McKinsey Analysis
