The Aerospace Industries Association enlisted Stephen S. Fuller, a well-known economist at George Mason University, to run the numbers. The outcome of the supercommittee’s negotiations and the specifics of how the budget-cutting trigger would work are still unknown but the study relied on several general assumptions for how the cuts might occur.
In a report released Tuesday, Fuller and AIA start with the assumption that $1 trillion would be cut from defense. The analysis further assumed that $100 billion of that total would be cut in fiscal 2013. Of that $100 billion, AIA estimated that $45 billion would come from military equipment accounts.
In that case, Fuller found, the U.S. economy would lose more than 350,000 defense jobs from the Pentagon’s contractors and its suppliers.
But that would be just the beginning, he said. Because of the job losses, people would have less money to spend and fewer dollars would flow to the businesses that cater to those workers, such as restaurants, causing an additional 650,000-plus people to be out of work. The result would be a total loss of 1,006,315 jobs.
“It rolls through the economy,” Fuller said at an AIA-sponsored event to release the study.
More than half of the affected jobs are in only 10 states, including California, which leads the list with more than 125,000 jobs at risk.
Virginia would be a close second with nearly 123,000 positions, while Maryland is ranked sixth and projected to lose about 36,000 jobs.
Some companies have already started trimming in preparation for expected Pentagon cuts — regardless of whether the trigger occurs.
Lockheed Martin said Tuesday that it has completed a voluntary layoff program in its information systems and global solutions unit, which is based in Gaithersburg. The initiative, meant to reduce the unit’s employee count by 250 in February, follows layoff announcements in Lockheed’s corporate, enterprise business services, aeronautics and space systems units.