College of Business

Jim Lee

 

Chief Economist Shows Resilience of Communities That Face Base Closures

CORPUS CHRISTI, Texas – An upcoming report reveals the resilience of local economies during military base closures or downsizing, particularly when redevelopment efforts prepare workers for other industries.

Dr. Jim Lee, Chief Economist at Texas A&M University-Corpus Christi, said communities facing base closures can offset some job losses with job creation in other industries, a process known as economic redevelopment.

 “Community leaders facing closures or downsizing should focus on redevelopment efforts and the ability of the local labor market to shift to other opportunities while remaining in the community,” Lee said.

The Coastal Bend area was affected by the 2005 base realignment and closure (BRAC) process that ended with the closure of Naval Station Ingleside in 2011.

Another BRAC round isn’t slated to begin until 2015, but concerns continue about economic impacts of additional military reductions in light of recent federal government spending cuts, commonly known as sequestration, and the partial government shutdown in October.

Workforce Solutions of the Coastal Bend is working with Lee to estimate the potential impacts of various scenarios for Corpus Christi Army Depot and Naval Air Station Kingsville.

Lee’s latest study shows that not all jobs are created equal. He took a broad view of the impacts as a whole instead of studying individual communities. Lee applied statistical methods to historical data, specifically county employment and income between 2005 and 2011, the duration of the latest BRAC round. His study showed:

  • More adverse regional economic effects at Air Force bases than Navy or Army bases
  • Overall size of impact varied by the type of personnel (contractors, civilians or military) at the base.
  • Economic reactions are not symmetric: a community’s economy tends to expand when the base expands, but does not perform poorly when it sees a base downsize.

Read the edition of “Economic Pulse” with more about Lee’s BRAC research,http://pulse.cob.tamucc.edu/Econ_Pulse_2014_2.pdf.

Lee cautions that the studies like this tend to generalize effects from base closures, uncovering the ‘typical’ community with military presence.

“With hindsight, we see that the experience of the San Patricio community was anything but typical,” Lee said.

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