Costs of War
Published September 2, 2025
Tags Heidi Peltier
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The Employment Impacts of Cuts to Federal Spending: Not All Cuts Are Created Equal

Paper

Economist and Costs of War Director of Programs Heidi Peltier (Senior Research Associate, Brown University) documents how the majority of the federal workforce involves military-related sectors, including the military, homeland security, and more. However, Dr. Peltier shows, military spending is inefficient for employment: spending on education and healthcare would create more jobs while reducing the federal budget.

The majority of the federal workforce involves military-related sectors, including the military, homeland security, and more. But military spending is inefficient for employment: spending on education and healthcare would create more jobs while reducing the federal budget.

This report, an update to a previous paper from 2023, reveals that military spending (including both federal defense spending and various private military industries) produces an average of five jobs per $1 million in spending, including both direct jobs and jobs in the supply chain. By contrast, 13 jobs are created for every $1 million in education spending – nearly three times as much employment. Healthcare spending creates 84% more jobs than military spending, while infrastructure and clean energy create from 24% to 64% more.

In 2025 the federal government is making large cuts in personnel and spending in various programs that Americans value – including education, healthcare, environmental programs, public parks and lands, and many others. At the same time, the Trump administration is increasing the size of the federal budget by devoting more spending and resources to the military and homeland security, further exacerbating a disproportional federal budget and workforce.

Federal spending on the Department of Defense accounts for half of all discretionary spending (49%) and more than half (60%) of federal employment as of the end of fiscal year 2024. Adding funding for the Departments of Homeland Security and Veterans Affairs, the military sectors make up almost two-thirds (61%) of the federal discretionary budget and 78% of the federal workforce (including both civilians and active-duty military). This is a seven percent increase in the military-related workforce since the previous 2023 report based on fiscal year 2022 data.

Of the 3,669,000 federal workers in 2024, 2,846,077 were employed in either DHS, VA, or DoD.

It is precisely because military spending is exorbitant that so many jobs have been created in the military-related sectors of the federal government. However, a shift in funding from military to non-military programs would result in an increase in employment (since other programs are better job creators than the military) without an increase in the budget.

About the Authors

  • Heidi Peltier

    Heidi Peltier

    Senior Researcher, Thomas J. Watson Jr. School of International and Public Affairs, Brown University, Director of Programs, Costs of War
    heidi_peltier@brown.edu

    Heidi Peltier has been a contributing author to the Costs of War project since its inception in 2010 and joined the staff in 2019. Peltier is an economist who has written on military-related topics including the employment impacts of military and other public spending; military contracting, or what she calls the “Camo Economy;” and other areas at the intersection of militarism and public finance.  She has also written widely on the employment impacts of a transition to a low-carbon economy, and is the author of the book, Creating a Clean-Energy Economy: How Investments in Renewable Energy and Energy Efficiency Can Create Jobs in a Sustainable Economy. Heidi has been interviewed in print, radio, and podcasts regarding her research on the employment impacts of military spending as well as on her research on the clean energy economy. She has presented her work at the U.N. Climate Change Conference, to various public officials at the state and federal levels in the U.S., and at conferences domestically and abroad. Heidi has served as a consultant with the U.S. Department of Energy, the United Nations Industrial Development Organization, the International Labor Organization, and various other organizations.