If planned federal cuts take place next year, Maryland could lose nearly 115,000 jobs, according to a recently released report by the Aerospace Industries Association.
About a third of the lost jobs in Maryland would come from Department of Defense cuts, and the rest would come from cuts in professional and business services, said the report, entitled “The Economic Impact of the Budget Control Act of 2011.”
In Prince George’s County, it's possible these cuts could effect one of the county’s largest employers, Joint Base Andrews Naval Air Facility Washington, which, according to the state’s Department of Business and Economic Development office, employs the highest amount of federal workers in the county at 8,057 employees.
David Iannucci, a spokesperson with Prince George's County executive's office, said that with the county's large federal presence, it is especially vulnerable to these types of cuts.
"If these types of cuts were to be implemented it would have a very serious negative effect on the local economy, tax revenue and unemployment," Iannucci, who specializes in economic development, said.
The county has 17 federal agencies altogether.
Data from ChooseMaryland.org shows that of the top five largest employers in the county, three of them are federal government agencies and could stand to suffer the highest amount job losses.
According to the report, about 617,449 federal jobs are at risk nationwide when the automatic spending cuts go into effect in 2013, and they’ll cost the U.S. economy about 2.14 million jobs in total, as well as decrease personal earnings of the workforce by $109 billion.
Maryland’s job loss would rank fifth, the report, conducted by George Mason University economist Stephen Fuller, says, following D.C, which is predicted to lose 127,407 jobs, and Virginia, at 207,571 job losses.
These numbers include losses from both Department of Defense (DOD) cuts and non-DOD cuts and represent direct, indirect and induced job losses resulting from the spending reductions.
Fuller predicts in the report that the reductions will reduce the nation’s Gross Domestic Product (GDP) by $215 billion, while unemployment will increase by as much as 1.5 percentage points, putting the national rate above 9 percent.
In addition, he says collateral impacts, determined by behavioral factors, will also occur.
“The loss of consumer confidence may suppress spending, especially spending requiring credit such as for autos and housing,” he wrote. “Personal saving may increase, taking further spending out of the economy.”
According to Fuller, these collateral impacts, along with the loss of personal income, jobs and GDP, will seriously enlarge the negative consequences of the spending cuts and deepen the economic reduction in 2013.
“If they are allowed to occur as currently scheduled, the long-term consequences will permanently alter the course of the U.S. economy’s performance, changing its competitive position in the global economy,” Fuller wrote in the summary of his findings.