“But when we compare federal spending on defense to the alternatives, such as health care, education, clean energy, or infrastructure, we find that all of these areas create more jobs than an equivalent amount of military spending,” she adds. Strikingly, Garrett-Peltier found that investments in elementary and secondary education create nearly three times as many American jobs as defense spending, while health care creates about twice as many jobs. Whereas $1 million spent on defense creates 6.9 direct and indirect jobs, the same amount spent on elementary and secondary education creates 19.2 jobs. $1 million spent on healthcare creates 14.3 jobs. She used an economic model called an Input-Output (I-O) model to analyze how many jobs are created for every $1 million in spending, drawing on information from the US Economic Census, Internal Revenue Service tax documents, the US Bureau of Labor statistics, US Bureau of Economic Analysis data, and other sources. “I-O models estimate the various components of the supply chain or the inputs that go into producing any good or service,” Garrett-Peltier writes in the study. “They also show the outputs, where each industry sells its goods or services to various categories of customers.” “By using an I-O model, we can estimate both the direct and indirect jobs associated with any type of spending,” Garrett-Peltier continues. “For example, with military spending, the direct jobs are those created in the Department of Defense whereas the indirect jobs are created in manufacturing, transportation, IT, and other industries that supply goods and services to the military. Similarly, in education, the direct jobs are those for teachers, principals and office staff; the indirect jobs are in industries such as textbook publication, furniture manufacturing, electric utilities, and so on.” That snapshot helps explain why domestic spending creates more American jobs, she notes. First, some of the jobs created by defense spending “leak” overseas, whereas construction or nursing jobs created by investing in infrastructure or health care are created, and remain, in the United States. Second, the labor intensity involved in domestic spending is greater than defense spending.
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