Defense Shrinkage Fallout: Yet Another Gloomy Report : But, flawed as it is, important task force project raises the right questions
The Los Angeles County Aerospace Task Force had the right idea two years ago when it began the monumental task of addressing problems created by the huge downsizing of the defense industry. Defense cutbacks will mean continued economic disruptions and job losses, but the task force’s grim projection of utter devastation for Los Angeles County is under challenge--and has left some critics wondering about the validity of any of its conclusions. That’s too bad. Whatever the group’s methodological shortcomings, it has drawn much needed attention to serious issues facing the region.
The task force, which was created by the Board of Supervisors, drew fire from critics for imprecision--if not for exaggeration. It said reduced defense spending would mean the loss of as many as 420,000 direct and indirect jobs in Los Angeles County by 1995. But a day after issuing its Los Angeles County Economic Adjustment Strategy report, the task force was backpedaling. It turned out that the job loss estimate was a statewide, not regional, projection based on a simulated, worst-case scenario. The projection for Los Angeles County was less than half the original: about 184,000 job losses.
Even so, on Friday the report was presented to Peter V. Ueberroth, head of Gov. Pete Wilson’s competitiveness council. And three members of the Board of Supervisors went trotting off to Washington to present the report to the White House and members of the California delegation last Thursday. One hopes that the region’s undeniably valid case for federal help wasn’t undermined by the subsequent reports about the study’s flaws. The industry’s problem here is serious enough; it doesn’t need exaggerating.
The confusion over the statistics clouded some valid recommendations of the report, which was a collaborative effort by the Los Angeles County Aerospace Task Force, Economic Development Corp. of Los Angeles County, Community Economic Development Commission and Economic Roundtable.
The task force advocated a three-point strategy that focused on new technology markets to serve California and the world. The report urged Gov. Wilson and the Legislature to develop a statewide strategy for promotion of high technology and technology-based enterprises. It emphasized the need for California to create a business-friendly environment for both small and large businesses by reforming the costly workers compensation insurance system, simplifying environmental regulations and compliance, and tackling high housing and real-estate costs. Education also needs to be improved to provide the state with better-skilled workers.
To retrain laid-off defense workers, the report urged the governor to consider expediting the state’s pass-through of federal job-training funds to the local level and allowing job training funds to be used flexibly to augment training services provided by community college and adult education programs. It urged Wilson to seek more federal job training funds for laid-off aerospace workers.
The task force’s proposed funding initiatives--the creation of Los Angeles County Aerospace High Technology Council, a Los Angeles Technology Resource Center and California Venture Development Fund--require a lot more study and debate. Critics argue that the measures are designed to prop up the major aerospace companies when the emphasis instead should be on the small, fast-growing entrepreneurial ventures--the vital sector that has long been an underlying strength of the state economy. These small businesses are creating most of the state’s new jobs. Providing incentives to encourage innovation, commercialization of technology and entrepreneurship would go a long way toward helping small firms increase their productivity, grow and contribute to the state’s role as a world leader in high technology.
The region’s and state’s large pool of high-tech resources and expertise provide a vast reservoir of opportunities in transportation and environmental systems. More effort should be devoted to generating ideas and programs to replace the lost defense business. Its decline has been well documented--now where do we go from here? That should be a specific task for the Economic Development Corp. of Los Angeles County.
The governor and Legislature, which both sometimes spend too much time maneuvering for partisan advantage, should read this report, flawed as it might be, as a word to the wise.
