The Employment Impacts of Cuts to Federal Spending: Not All Cuts Are Created Equal

Abstract

The majority of the federal workforce involves military-related sectors, including the military, homeland security, and more. But military spending is inefficient for employment: spending on education and healthcare would create more jobs while reducing the federal budget. This report, an update to a previous paper from 2023, reveals that military spending (including both federal defense spending and various private military industries) produces an average of five jobs per $1 million in spending, including both direct jobs and jobs in the supply chain. By contrast, 13 jobs are created for every $1 million in education spending – nearly three times as much employment. Healthcare spending creates 84% more jobs than military spending, while infrastructure and clean energy create from 24% to 64% more.