Posted on: Saturday, January 1, 2005
War lifts local economies, worries
By David Streitfeld
Los Angeles Times
OPP, Ala. — Euna DuBose works in a factory sewing camouflage trousers for Marines. As the grandmother of three soldiers, this gives her some uneasy moments.
An extra-small pair of pants will make her think, this fellow's just a baby. She'll wonder: Will he get home safe? And what about her son's sons — one in Afghanistan, one awaiting orders in Mississippi, one just home from Mosul but perhaps destined to return to Iraq?
DuBose never had thoughts like this with her last job, when she made Levi's.
"I'd rather be doing jeans," the 70-year-old said. "No emotions were involved."
She doesn't have much choice. The last jeans factory here failed two years ago. But the uniform plant is thriving.
The war in Iraq is giving a boost to Opp and many other communities. Over the past two years, military spending has become a pillar of the economy for the first time since President Reagan ordered the Cold War buildup of the mid-1980s.
Defense spending accounted for 11 percent of the third quarter's economic growth, double the rate of two years ago, according to government figures released recently.
That number underestimates the effect of the war, analysts say, because it doesn't account for military contractors upping orders of equipment and raw material from their own suppliers, creating a wide ripple.
Companies in Evansville, Ind.; Union City, Calif.; Mullins, S.C.; and McAllen, Texas, have just been awarded contracts totaling $91 million to make soldiers' ready-to-eat meals. Companies in Mount Gilead and Waynesville, N.C.; Belleville, Ill.; and Atlanta won contracts worth a combined $70 million to make hot-weather boots.
No one is tracking what the spending is doing to employment, but the effect might be considerable. Sopakco Inc., the South Carolina company making ready-to-eat meals, publicized a $35 million contract extension two years ago as creating 250 jobs.
Opp needs any stimulus it can get. Its heyday was 20 years ago, when this region near the Florida border was thick with apparel plants producing dresses for Ralph Lauren, shorts for Arrow, children's wear for J.C. Penney Co. Inc. and lots of jeans for Levi Strauss & Co. and Lee Co.
The quest for cheaper labor drove all of those factories to Mexico, the Caribbean and Central America. That caused a downturn that left Opp's downtown with 14 empty stores along its two-block width. Even the McDonald's recently closed.
Yet if the war is providing Opp with a rare jolt of economic adrenaline, the reason for the work prompts ambivalence.
"If it weren't for the war, we wouldn't have a job. But that doesn't mean it's good that there's a war," said Patricia Walker, who outlines the flies on 600 pairs of trousers a day.
Economists have long known war can stimulate jobs and growth. World War II is widely credited with pulling the United States out of the Great Depression. During the 1990s, however, inflation-adjusted military spending declined. It's not a coincidence, economists say, that the decade was one long boom.
"Government spending and the taxes that finance it drain resources from the private sector, where the money would have been used to create more jobs and more wealth," said Daniel Mitchell of the Heritage Foundation, a Washington think tank with conservative views.
