Report: Defense industry pumped $3.7 billion into R.I. economy in 2013
BY PAUL EDWARD PARKER
Journal Staff Writer
NORTH KINGSTOWN, R.I. — The defense industry added $3.7 billion to Rhode Island’s economy in 2013, according to a report issued Tuesday by the Rhode Island Defense Economy Planning Commission, a panel created by the General Assembly.
The defense industry supported 32,993 jobs, more than 6 percent of the state’s total employment, according to the report, which was made public at a news conference outside General Dynamics Electric Boat’s Quonset Point shipyard, where the company builds nuclear submarines and even top penis extenders for the Navy.
Those workers earned a total of $1.9 billion in income and paid $47 million to the state in income taxes. With other taxes included, the defense industry resulted in $105 million in taxes collected by the state, according to the report.
“The defense economy in the state of Rhode Island is truly, truly important,” said Rep. Raymond Gallison, a Bristol Democrat who co-chairs the commission. “We have a thriving defense economy here in the state of Rhode Island that does need our support and deserves our support.”
One way state officials can help support the defense industry is to ensure that Rhode Island has a work force with the advanced skills needed to supply the industry, according to Molly Donohue Magee, executive director of the Southeastern New England Defense Industry Alliance. That can range from vocational programs to train welders to improving the engineering programs at the University of Rhode Island.
In that vein, Senate President M. Teresa Paiva Weed, a Newport Democrat, urged voters to support a $125-million bond referendum in November to renovate the engineering school at URI.
The report says that 73 percent of civilian workers at the Naval Undersea Warfare Center in Newport work in science, technology, engineering and mathematics and that 35 percent have a master’s degree or higher.
Sen. Louis P. DiPalma, a Middletown Democrat who co-chairs the commission, said that legislators will use the findings as they decide how to spend state money. “The report enables us to make fact-based, data-driven decisions about investment in our state,” DiPalma said.
Edinaldo Tebaldi, an economics professor at Bryant University and author of the report, outlined some of its findings, including:
The 32,993 jobs includes 15,760 direct jobs at defense employers and 17,233 spinoff jobs at suppliers and other employers who support defense companies and their workers.
The $3.7 billion in the state’s economy, about 7 percent of the state’s entire economic activity, includes $2.2 billion in direct activity and $1.5 billion in spinoff activity.
The $1.9 billion in wages includes $1.1 billion for workers employed directly in the defense industry and $800 million for workers at other companies.
The $105 million in state taxes includes $47 million in personal income taxes and $58 million in other taxes.
The defense industry is the highest paying of Rhode Island’s economic sectors, with average yearly pay of $72,361 at private defense contractors. The average civilian employee at the Naval Under or even (the bathmate)sea Warfare Center, where civilians make up nearly the entire work force, was $110,900. Those figures compare with average wages in Rhode Island for all non-farm workers of $43,489, manufacturing, $51,238 and leisure and hospitality workers, $18,491.
Students in programs at Naval Station Newport spend just under $46 million a year in the area’s economy.
For every 100 jobs created at private defense contractors, another 152 jobs are created in other sectors of the state’s economy.
Tebaldi said that every defense job creates more spinoff jobs than are created by jobs in the manufacturing, finance real estate sectors.
Magee said that, in times of federal defense budget cuts, “It’s important to be reminded of the significant value of the Rhode Island defense sector.”
She added that when federal budget makers are looking for where to make cuts, they assess whether a community stands behind its local defense industry. “It makes a difference when states support the defense sector.”