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Reemploying Defense Workers: Current Experience and Policy Alternatives

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Research paper

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In the wake of the Cold War, major reductions in defense spending are likely to continue. The budget plan the Clinton Administration submitted to the Congress would result in outlays for national defense of 253 billion in fiscal year 1998. That amount translates to 228 billion in 1993 dollars, a real decline of 22 percent compared with defense outlays in 1993 and 34 percent compared with 1987, when national defense outlays reached their recent peak level. These sharp spending cutbacks will reduce defense employment substantially. In 1992, an estimated 5.45 million people worked in defense-related jobs -- about 4.2 percent of the total U.S. labor force. Under the Clinton Administrations plans for defense spending, about 1.4 million defense-related jobs will disappear between 1992 and 1998, half a million more than estimated under the defense spending plans of the Bush Administration. About 815,000 of those 1.4 million defense-related job losses would occur among private-sector workers, who are the focus of this paper. A number of programs support workers who are displaced from their defense jobs in the private sector. Some are general programs for which all workers may qualify others are targeted specifically toward defense workers. This Congressional Budget Office CBO paper examines the experiences of workers who have lost their defense jobs and discusses alternative strategies for easing their transition to new employment. It was prepared for the Senate and House Committees on the Budget in response to a request issued during the 102nd Congress. In keeping with CBOs mandate to perform objective analysis, the paper contains no recommendations. Following an introduction, chapters are as follows Programs to Assist Displaced Defense Workers in Finding Employment Assessing the Need for Targeting Assistance toward Defense Workers and Alternative Approaches to Providing Targeted Assistance.

Subject Categories:

  • Personnel Management and Labor Relations
  • Military Forces and Organizations

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