For every $1 billion shifted from military to urban spending, 6,600 more jobs are created than that created by the equivalent defense spending, the U.S Conference of Mayors said Monday.
And, a new study released by the mayors said, a shift of $30 billion a year over a five-year period, would increase the gross national product by $3.5 billion and give citizens $2.2 billion more in disposable income than if the money stayed in the military budget."Even after such a transfer were made," the report said, "the nation's military budget would still be permitted an average annual real spending increase of $41 billion over 1981 levels after inflation."
The study was commissioned by the mayors because of their concern that over the past eight years the nation's spending priorities have been out of balance.
During the 1981-1988 period, six key urban grant-in-aid programs suffered cumulative budget cuts of about $60 billion. In the same period, the Reagan administration's military build-up reached a cumulative total of $328 billion.
Mayor Art Holland, Trenton, N.J., president of the mayors' conference, said the study was undertaken to see what would happen if "a reasonable shifting of federal funds from the current unprecedented military build-up to urban needs" would produce greater economic activity and a net increase in jobs for the nation.
The study, by the Lansing, Mich., Employment Research Associates used a series of computer models to determine the employment, output, income and investment impacts of the shift on a national level and for four cities - Chicago, Irvine, Calif., Austin, Texas, and Trenton, N.J.
In the study, the shift of $30 billion each year was designated for six urban grant-in-aid programs that have been most sharply reduced during the Reagan administration - primary and secondary education, housing and community development, social and community services, urban mass transit, employment and training and public health.
"Virtually every major category of employment, with the exception of the durable goods industries, shows a net gain in jobs," the report said. Non-durable goods, construction, transportation, public utilities, finance, insurance and real estate, wholesale and retail trade and services all show job increases with a shift from military to domestic spending.
"This is partly because most urban spending is domestic, whereas some of the military spending inevitably goes abroad," the report said. "Also, an increasing amount of foreign high-tech components are being imported by American military contractors.
"By contrast, when a city hires a teacher or employs construction workers to build public housing, those jobs remain in the city," the study said.