Chapter 3: Science & Engineering Indicators

The Impact of Defense Downsizing on Technical Employment

The end of the Cold War has meant a dramatic curtailment in overall defense spending (see chapter 4 for a discussion of defense R& D funding) that has adversely affected S& E employment. Defense cutbacks began in 1988 and are likely to escalate during the next few years. Therefore, the full impact of the "peace dividend" on S& E employment is unknown. Bureau of Labor Statistics (BLS) estimates made in early 1993 show the United States losing more than 700,000 defense-related civilian jobs between 1987 and 1992, and an additional 1.3 million jobs between 1992 and 1997--a 40-percent reduction over the 10-year period (Saunders 1993, p. 3). (See figure 3-5 and appendix table 3-10.)

Although scientists and engineers comprise only 3 to 4 percent of the total U.S. labor force, they account for a higher proportion--8 to 9 percent--of all defense-related civilian employment.

(Technicians account for an additional 6 percent of defense-related civilian employment.) In 1987, approximately 16 percent of the engineers and 11 percent of the (natural, computer, and math) scientists working in the United States were involved in defense work. Those percentages dropped to 13 and 8 percent, respectively, in 1992.

Engineers are heavily represented in industries that produce military-related hardware and software. In the aerospace industry, they accounted for one-fifth of all jobs, and in the electronic components and communication equipment segments of the electrical equipment industry, they held 12 percent of all jobs in 1992. So engineers working in these industries are more likely to have their job security threatened than those working in other industries (Engineering Manpower Commission 1991a). The percentage of the total engineering workforce involved in defense-related work, however, is much lower today than it was 25 years ago. The number of engineers employed by the Department of Defense and prime and subcontractors in 1990 was only slightly higher than the number employed in 1967 (at the height of the Vietnam buildup). In contrast, during the same period (1967-90), the total number of engineers increased about 50 percent (R. Rivers, cited in Bell 1990, p. 39).

Engineering is one of the fields most affected by the defense drawdown. According to BLS projections, 120,000--or more than two out of five engineering defense-related jobs--have been or will be lost between 1987 and 1997. Most of the losses have occurred or will occur in the electrical/electronics, aeronautical/astronautical, mechanical, and industrial engineering specialties. Another hard-hit group will be those employed in computer, mathematical, and operations research specialties, where the total number of jobs is expected to decline from 69,800 in 1987 to 54,500 in 1997. Physical scientists have experienced or will experience fewer job losses--a total of 6,700 during the 10-year period--but this number represents one-fourth the total number of defense-related jobs that existed in 1987. Technician employment is expected to decline by one-third over the 10-year period. (See figure 3-8.)

R& D employment is also being adversely affected by defense budget cutbacks. The number of federally supported FTE R& D scientists and engineers working for firms classified in the aircraft and missiles industry (the largest employer of federally funded R& D personnel) declined 20 percent between 1989 and 1991. Employment of these R& D professionals declined 6 percent in the electrical equipment industry (the second largest employer) and 47 percent in the machinery industry during the same 2-year period (SRS forthcoming [b]).

For perspective, it is important to emphasize that given the size of the U.S. economy, defense downsizing is "unlikely to cause a short-run macroeconomic catastrophe" (Brauer and Marlin 1992, p. 148). Fewer than 1 percent of all U.S. workers will be affected over the next 5 years (Kosiak and Bitzinger, 1993). Only a few pockets of the economy, i.e., only a few industries, occupations, and communities, are likely to suffer measurable injury. For example:

Some companies currently producing military hardware will be unwilling or unable to convert to products for the civilian market. Some companies have already chosen to downsize rather than venture into new markets. (See Washington Post 1992.)
Some engineers who have spent their entire careers in the defense industry--those who have become highly specialized--may have difficulty finding civilian sector jobs. (Defense workers also tend to be older; this, despite their job experience, makes them less desirable for retraining and employment by civilian firms. See OTA 1992). Finding another job is also likely to mean relocation, a condition some unemployed engineers have been unwilling to accept (Engineering Manpower Commission 1991a).
Some regions of the country--those most heavily dependent on the defense industry--will experience at least a short-term expansion of their unemployment rolls. The states most adversely affected are Washington, California, Arizona, Texas, Missouri, and almost all New England states; the DC-Maryland-Virginia area and Long Island, New York, are also likely to suffer the consequences of reduced military budgets. For some regions, such as the Los Angeles area, the defense cutbacks will continue to exacerbate an already severe unemployment problem; while others with more diversified economies are unlikely to experience as much hardship (Brauer and Marlin 1992).

The expected unemployment of scientists, engineers, and technicians brought about by the end of Cold War hostilities is likely to be mitigated by defense conversion--i.e., federal support shifted from military to civilian technology advancement may mean that the loss in defense jobs will be offset by the creation of new opportunities in emerging industries--and by increased demand for highly skilled workers to maintain international competitiveness (Atkinson 1990). (See chapter 4 for a discussion of various defense conversion projects and programs.)

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