Aerospace Job Losses in State

Several editions of The Times have reported projections of job losses from aerospace layoffs made in the recently released “Los Angeles County Economic Adjustment Strategy for Defense Reductions.” As authors of this research report we would like to emphasize that findings from work each of us did confirmed the link between job losses in aerospace and widespread losses in the general economy. The report also points out that the actual number of jobs lost will be determined by federal budget decisions.

Debate around specific job loss projections (in particular, validity of the outside, maximum projection) has obscured the most important findings of the report. A majority of the high-technology industrial base is dependent on large firms with large defense contracts. Some of these firms are not attempting to diversify into commercial markets, and those that are face a difficult transition. The presence of this network of high-technology firms gives the region powerful competitive advantages in the form of skilled workers and a network of specialized firms.

The high-technology/industrial complex in Los Angeles County is heavily dependent on defense funds, but not totally so. Many small and medium-size firms sell most of their output in commercial markets and anticipate future growth.

The crucial question is how the public and private sectors can create an economic environment that supports retention of existing industries as well as diversification into emerging markets such as those for advanced surface transportation systems and environmentally benign industrial technologies.

A particularly important finding of the report is that aerospace job losses are intertwined with other problems in the economy and appear likely to cause lasting damage to the region. It is important that data assembled for the report be used as part of a comprehensive effort to develop a feasible policy agenda for dealing with mounting economic problems.

DANIEL FLAMING

President, Economic Roundtable

MICHAEL BELTRAMO

President, Beltramo and Associates

ALLEN SCOTT

Director, Lewis Center for Regional Policy Studies, UCLA