Defense dollars: economic impact of the military.

• Author: Forker, Jennifer
• Position: The military as an economic powerhouse in Alaska

As one of the state's three largest employers, the U.S. military is an economic powerhouse in Alaska. With disposable income and good credit, service people are some of the state's better consumers.

The military. Its members were among the first U.S. citizens to venture into Alaska. They built the Alaska Highway and set up bases in Anchorage, Fairbanks and the far-flung reaches of Adak, Shemya and Galena. No small feat, the military built Alaska's earliest infrastructure, tamed wilderness and for many years was the law of the land.

Even today, the military is among Alaska's top three industries, ranking behind oil and neck-and-neck with fishing. Soldiers, airmen, and coast-guardsmen and women and their families account for 10 percent of Alaska's population.

Despite the downsizings and base closings of the past three years, the military remains an economic powerhouse. The Pentagon spends more than ever in Alaska - $1.7 billion annually. That's more than one-third of all federal spending in the state.

And for every dollar of military spending, economists estimate that about $1.50 to $2 is generated in the economy as Pentagon salaries buy groceries, computers, cars and houses.

Money into the Economy

The military is also one of the state's largest employers, with 17,770 active-duty personnel, 4,460 civilians (usually hired locally) and 7,320 reserve and National Guard members in 1995, according to the Pentagon's most recent figures. The payroll totaled nearly $540 million last year - 6 percent of all the pay Alaskans collected, excluding the self-employed.

"Actually, one of the biggest ways the military puts back into the economy is the civilian pay," says Neal Fried, an economist with the Alaska Department of Labor. "They live off the bases and put the money back into the economy."

Because the military provides many day-to-day goods and services for its members, a military paycheck doesn't go as far locally as that of a civilian. Still, as of 1993, the Department of Labor notes that 36 percent of the armed forces and their families lived off base, receiving off-base housing allowances for buying or renting homes.

They also "have a fairly high disposable income. Businesses think of them as generally well employed, good credit risks," says Fried.

There's a subtler economic idea at work here as well. Military money is worth more to the state, Fried says, because it comes from Outside.

"It's bringing new cash, or new economic activity, into the economy. The rest of America is paying us to help defend them, in a sense, and we're profiting from that. We're an exporter of defense ... we don't make stuff like tanks, we export protection."

Economic Cornerstone

While many may think Alaska no longer relies on the military's millions for its economic survival, as of 1993 Alaska had the nation's most defense-dependent state economy, according to the Defense Budget Project, a nonpartisan research organization that...