Space Employment in Los Angeles: A Declining Role in the Aerospace Industry?

See, for example, the comments of participants at a symposium entitled “California's Search for New Sources of Economic Growth,” Hirsch Werner Z. Baisden Richard N. , eds., California's Future Economic Growth (San Francisco: Diablo Press, 1965); and Benoit Emile Boulding Kenneth E. , eds., Disarmament and the Economy (New York: Harper & Row, 1963).

Black Ronald P. Foreman Charles W. , “The Clouded Future of Aerospace,” Business Horizons, IX:4 (Winter 1966), 31–40.

“Military Prime Contract Awards by Region and State, Fiscal Year 1962–1966” (mimeo., Office of the Secretary of Defense, Jan. 1967).

This definition of aerospace employment necessarily includes some employment within the four industry groups that is not aerospace employment. For example, establishments producing certain kinds of household appliances (e.g., cooking equipment, laundry equipment, and sewing machines) are grouped in the electrical machinery industry. Also the definition excludes some aerospace employment in other industry groups that cannot be readily identified. For example, grouped in the industry miscellaneous services (SIC 89) are engineering services and scientific research. On balance, the errors are probably compensating.

Estimated by Management Information Systems Division, National Aeronautics and Space Administration.

Kennedy Space Center is located in Brevard County, Florida; Marshall Space Flight Center is in Huntsville (Madison County), Alabama; the Manned Spacecraft Center is in Houston, Texas; the Michoud Assembly Facility is in New Orleans; and the Mississippi Test Facility is in Hancock County, Mississippi. Combined MSF civil service and contractor employment at these locations totaled about 30 per cent of the MSF workforce in 1966.

Using an input-output model, the California Economic Development Agency estimates that the employment multiplier for the Los Angeles–Long Beach area was 2.33 in 1959 (Market for California Products [Sacramento: 1961], p. 62).

The largest components of Gemini inputs excluded because of the definition of aerospace employment used in this article are inputs from the miscellaneous machinery industry (SIC 359, machine shops). This industry comprised about 10 per cent of identified subcontractor inputs. See Bohm Robert A. , “Empirical Evidence on the Geographic and Industrial Distribution of Aerospace Expenditures,” Department of Economics, Washington University, St. Louis, Missouri, Working Paper 6528, June 1966.

NASA-wide, the decrease in expected R&D costs is only slightly smaller. The Budget of the United States, Fiscal Year Ending June 30, 1968, Appendix (Washington, D.C.: U.S. Bureau of the Budget, GPO, 1967), pp. 873–879.

Based on an inflation factor of 3.6 per cent per annum. This was the average annual change in the implicit price deflator for federal purchases of goods and services between 1964 and 1966. If available, an index for federal R&D purchases would probably give a factor for inflation in excess of 3.6 per cent. If MSF funding were stable at $3.1 billion in current dollars, employment on the program would tend to erode over time.

Gilmore John S. Coddington Dean C. , Defense Industry Diversification, An Analysis of 12 Case Studies, U.S. Arms Control and Disarmament Agency, Publication 30 (Washington, D.C.: USGPO, 1966); and “Diversification Guides for Defense Firms,” Harvard Business Review, May-June, 1966, pp. 144–159.