San Diego Military Economic Impact Report It’S All About the Courageous Men and Women in Uniform and Their Families Who Serve So Honorably and Sacrifice So Much

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San Diego Military Economic Impact Report It’S All About the Courageous Men and Women in Uniform and Their Families Who Serve So Honorably and Sacrifice So Much SAN DIEGO MILITARY ECONOMIC IMPACT REPORT It’s all about the courageous men and women in uniform and their families who serve so honorably and sacrifice so much. INDEX 04 About 05 Sponsors 06 Executive Summary 07 San Diego – Rooted In The Military 08 Military Spending And Job Creation 12 United States Navy 16 United States Marine Corps It’s all about the 20 United States Coast Guard 22 Navy Medicine courageous men and 24 The U.S. Department Of Veterans Affairs 26 Conclusion women in uniform 27 Acknowledgements and their families who 27 End Notes serve so honorably and sacrifice so much. The San Diego Military Advisory Council (SDMAC) is a Y The Rady School of Management at the University of not-for-profit 501(c)(6) organization established in 2004 D California San Diego is the region’s premier business MAC to advocate on behalf of the military, veterans, and their school, internationally recognized for the intellectual RA D families in the San Diego region. SDMAC’s advocacy contributions of its faculty and quality of its academic AboutS efforts include facilitating the partnership among our programs. The Rady School offers a Full-Time MBA military, elected officials, civic leaders, and the business program, a FlexMBA program for working professionals, community to improve the understanding of the a Ph.D. program, a Master of Finance program, a Master important contributions made by the military. of Science in Business Analytics program, a Master of Professional Accountancy program, Executive Education, SUPPORT SDMAC and BECOME A MEMBER and undergraduate courses. To find out more about the www.SDMAC.org Rady School visit, www.rady.ucsd.edu. About the Military Economic Impact Report SDMAC’s annual Military Economic Impact Report highlights the positive impact of federal defense budgets, veteran benefits, and community involvement by our local military, veterans, and their families on our local and state economies. Through a new partnership with SDMAC, the 2020 MEIR report is a product of the rigorous work of Professor Sally Sadoff and MBA students at the Rady School of Management. Leveraging insights from the frontier of academic research, the team’s experts applied data tools that calculate the impact of military dollars on the San Diego region. The team focused on increased transparency in data and methodology in this year’s report, pioneering a new blueprint for the project going forward. In addition to the data analysis in the 2020 report, the perspectives of both military servicemembers and private sector business leaders have been included to measure both the quantitative and qualitative impact of the military on the community. A separate document that details the report methodology, and the report itself, are available on the SDMAC website, www.sdmac.org, and Rady website, www.rady.ucsd.edu. RADY STAFF SPONSORS Dr. Sally Sadoff Rady Faculty Sponsor RDML (Ret) Mark Balmert Andrew J. Ovrom MBA Student Lead SDMAC Executive Director Daniel J. Reed MBA Student Danson Nguyen MBA Student Mark Wernig Brian J. McArthur MBA Student SDMAC MEIR Chair Joseph A. Baini MBA Student Samuel Jordi MBA Student SDMAC would like to thank the following companies and organizations for their strong and generous support of the Annual 5 SDMAC Military Impact Report (MEIR) which allows for this study to be Sponsors developed and provided to the military and the San Diego region. TITLE SPONSOR PRESS coNFERENCE PLATINUM SPONSORS GOLD SPONSORS SILVER SPONSORS SDMAC | 2020 MILITARY ECONOMIC IMPacT REPORT 6 EXECUTIVE SUMMARY 2020 saw COVID-19 devastate local, national, In this extraordinary environment, the and global economies. The pandemic resulted partnership between San Diego and the military in a loss of vital businesses and services; remains imperative. unemployment rates rose, and communities suffered. San Diego faced dramatic job loss and cuts in spending across all industries. However, Exhibit 1. although the region’s GDP contracted, steady Military Supercluster Drives San Diego Economy military spending, sustained employment, and DIRECT JOBS GROSS REGIONAL community support helped stabilize the region. SPENDING PRODUCT (GRP) FY2020 $33.6 342,486 $52.4 Billion San Diego is home to the nation’s largest (Change Billion (+7.7%) (+5.7%) military community, housing one out of every from (+5.7%) FY2019) four U.S. Marines and one out of every six Sailors; and it contains a large part of Southern % of SD N/A 23% 25% Economy1,2 California’s premier training ranges where more than 75% of U.S. operating military forces prepare for deployment. In FY2020, an estimated 25% of San Diego’s gross regional Defense funds flow into the San Diego product resulted from military spending, an economy through defense contracts to local increase of 2.5 percentage points over initial businesses, compensation and benefits projections for the year. The military maintained provided to military personnel and federal its level of operations throughout 2020 and, civilian employees, retirement and veteran in doing so, contributed greatly to the region’s benefits, and government credit cards used for ability to endure unprecedented economic direct purchases. When considered together, uncertainty. The region is vital to the nation’s the Department of Defense, the Coast Guard identity and defense, and the military continues through the Department of Homeland Security, to serve as a pillar of strength for the area. and the associated Department of Veteran Affairs spending are considered an economic supercluster (Exhibit 1). The strength of this economic force is particularly apparent in Fiscal Year (FY) 2020, with a conservatively estimated 5.7% increase over fiscal year FY2019. Driving the growth is an increase in defense contracts San Diego’s regional economy is fueled in large and the addition of two aircraft carriers. The rise part by the military and defense partnerships we in military related employment, combined with forged over the past century, and the tremendous reduced regional employment in the current contributions to our community from the men economic conditions during the COVID-19 and women who serve our country and call San pandemic, results in the military supporting Diego home,” Mayor Kevin L. Faulconer said. “This a conservatively estimated 23% of San Diego report illustrates how they make our city stronger county jobs, up from 19% of jobs in FY2019. and more resilient, and they will play a major role as we work together to help our economy rebound and recover from this global pandemic. SAN DIEGO: 7 ROOTED IN THE MILITARY The area’s relationship with the 1908, William Kettner started Diego with 25,000 employees, military was strong long before widely promoting the economic expanding to 45,000 employees the region came to be known benefits afforded by the U.S. in 1942, about 22% of the city as San Diego. Juan Rodriguez Navy presence. The 1915 population4,5,6. Military spending Cabrillo first landed in the port Panama-California Exposition contributed to San Diego’s of what was then called San expanded the area’s appeal as a tremendous growth during the Miguel in 1542 and immediately military hub. In the coming years, 1940s. At the time, the Navy recognized the strategic value multiple military investments represented more than $2.5 of the area. However, it was helped San Diego recover from million in monthly payroll and not until 1769 that Spanish the Great Depression. During expenditures in San Diego. The military detachments began to this time, the Navy spent $1.4 military presence continued port in San Diego. The next 150 million, and the Army spent $1.8 growing over time and now years experienced increases in million on construction projects includes over 20 installations in the military presence and, in in our region ($22m and $28m the region. Today, the military is in 2020 dollars, respectively)3. a top employer in San Diego and Consolidated Aircraft continues to provide significant Corporation (CAC) moved its economic value to the region. main manufacturing facility to As COVID-19 contracts the U.S. San Diego in September economy, San Diego remains of 1935, producing many strong, not only as a hub for aircraft used in WWII3. military forces but also as a By the fall of 1941, CAC was place to visit and experience the the largest employer in San nation’s proud military heritage. San Diego Public Military Events and Places to Visit » Fleet Week (November, Downtown) » MCAS Miramar Air Show (September, MCAS Miramar) » Veterans Day Parade (November, Waterfront) » USS Midway Museum (Downtown) » Air and Space Museum (Balboa Park) » Flying Leatherneck Aviation Museum (Miramar) » Liberty Station (Point Loma) » CAF Air Group One WWII Museum (El Cajon) » Veterans Museum and Memorial Center (Balboa Park) » Mt. Soledad Veterans Memorial (La Jolla) » Waterfront Homecoming Sculpture (Downtown) » Fort Rosecrans National Cemetery (Point Loma) SDMAC | 2020 MILITARY ECONOMIC IMPacT REPORT 8 military SPENDING & JOB creation Military Spending Exhibit 2. The San Diego economy is driven by several $52.4 Billion Impact to San Diego GRP8,10,11 large sectors including tourism, technology, and defense. But only the defense sector has ($ in millions) FY2019 FY2020 demonstrated dependable resiliency through both Employee $11,929 $12,341 recession and mandated pandemic closures. The Compensation diversity of the components of FY2020 defense Retirement & $3,577 $3,688 spending (Exhibit 2 and 3) in our region also VA Benefits strengthen other economic sectors, through small Contracts & $16,194 $17,474 business targeted contract awards, spending by Procurement active duty and retired military families, and direct Government $65 $67 purchases of products through the government Purchase Cards charge cards. Employee compensation includes TOTAL DIRECT $31,765 $33,570 the direct wages and benefits provided to active duty military personnel, federal civilian employees, Multiplier Impact $17,789 $18,799 and military reservists in the region across the U.S.
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