Working with that Consolidated Federal Funds Report I realized I could actually measure the “Defense Welfare State” in Dayton. 

 

As in that Starship Troopers movie, “service guarantees citizenship” in the Defense Welfare State.  In other words one has to a) be in the military or a veteran, b) be a civilian worker (which can mean being a veteran or retired military, or c) a defense contractor.  to be a ‘citizen’ in the Defense Welfare State.  And being a citizen one gets the benefits.  Which are a living wage (and then some if one is a professional), retirement benefits, and medical care.  And, for veterans, access to the VA medical system.  And then there is that defense contractor community.

 

Here is a measure of military related spending.  The consolidated funds report “defense-related” category understates this so I did some adjustments to include veterans benefits and civilian retirement (this is an estimate of the defense-related retired civilian workforce figure, derived via a comparison with Toledo and Akron MSA).  I call this additional “Defense +”.  Numbers are for 2007

 

 

So , a 3 billion dollar input  into the Dayton MSA for 2007.  This is Darke, Greene, Miami, Montgomery, and Preble counties combined into one number.

 

Slicing the Dayton MSA defense pie by grouping expenditures into various categories, payroll, retirement, procurement, veterans benefits, and a misc. category.    One can see the significance of procurement, and retirements, too.  This raises the issue on how much other non-defense pensions contribute to the local economy.

 

 

 

And a time series.  I was a bit leery of this as these numbers are not adjusted for inflation.  But there is a noticeable pattern of  growth during the Bush/War on Terror era and stagnation, with a end-of-term trough during the Clinton years.

 

 

 

Taking a look at two defense-related programs that don’t fit well anywhere else.  Impact Aid is aid to school districts with large numbers of children of military and civilian defense workers.  AVFEA is apparently an education aid program for military members.  One can see how AVFEA bumped up during the Clinton years, but really grew during the Bush era,  A good example of how the GOP takes care of the military.

 

 

Also included in the “other” category are grants for R&D.  This number is a combination of two research grant programs, and there is a noticeable growth during the era of Mike Turner as congressman.  Correlation does not equal causation, but it’s a darn good hint. Turner is an aggressive ear marker, and may have earmarked in these categories, hence their growth in the recent past.

 

 

Another area where earmarks would play is “procurement”, which is goods and services.  Beyond the obvious like supplies and construction, there are services like engineering, consulting, research, programming, and even some manufacturing.  So this is one way that defense spending would indirectly influence employment and payroll in the private sector

 

 

…one can see a phase shift from $1B as ceiling during the Clinton years to $1B as floor in regional defense procurement during the Bush/War on Terror era.

 

 

For direct payments via payroll here is military + civilian, 1993-2007.  Again, this is not adjusted for inflation, which makes the drop during the 1990s even more notable.  These real declines overriding the masking effect of cost of living increases.  Declines due to end-of-Cold War downsizing and the closure of the largish Defense Electronic Supply Center in Kettering.

 

 

Fortunately these were prosperous times in the Dayton era, so the laid-off government and separated military were able to find work, maybe.

 

Comparing 2006 civilian + military defense payroll with other sectors of the Dayton economy (from County Business Patterns), one can see how manufacturing and health care dominate, but also the defense payroll ranks at # 4, and a close #4 if the non-defense Federal payroll is combined.

 

 

 

Yet, there is that $1.B + annual procurement flowing into the economy, too.  If this is mostly for professional, scientific and technical services (PS&T), some portion of this PS&T sector is subsidized by defense spending.  And since a large part of what happens in the local defense payroll are various types of technological things, one can “add” the defense payroll to PS&T to actually equal the manufacturing sector.

 

 

Equal and perhaps surpass as mass-production unionized manufacturing, with its large payrolls, fades from the scene.

 

An interesting concept is to think about this as a shift in the economic base.  The economic base would be the sectors bringing money into the regional economy (and supporting sectors like FIRE, retail trade, construction, etc) . 

 

We are in a shift from manufacturing to this mix (or overlapping)  PS&T and Defense sectors (assuming firms in the PS&T sector ares marketing outside the region, which they are).  And these may indirectly subsidizing health care, too, since this is a service that is usually not “exported” .  So more evidence of the changing character of the Dayton region.

 

Next, a look at Veterans Benefits and some geography.

 

The question is should we think about this as crowding out the private sector non-military related, complementing it, or no effect?

 

Thanks for the great data. It would be interesting to compare Dayton with other military towns - are there any other Rust Belt towns as connected to the military as Dayton?

Aside from smaller towns with large bases no metro area with as big a presence as Wright-Patterson.  There are places with large military contractor presences, like Grumman on Long Island and Pratt and Whitney in the Hartford area.  One place would be Rock Island with its Army arsenal and maybe Crane, Indiana (Bloomington/Beford), for the Navy. 

 

 

Wonderful job, Jeffrey!

I know a little about Virginia - Petersburg and Fort Lee might be an interesting comparison, though Petersburg was never really the kind of industrial powerhouse that Dayton was. The rest of the Tidewater is even more military but in a different way than Dayton seems to be.