Does The Gun Industry Create Jobs? Only If The Gain Is Worth The Loss.

This week there was an interesting ripple of gun news out of Indiana where the State Senate began action on a Republican-backed bill that would immunize the gun industry from lawsuits and terminate a civil action against Smith & Wesson and other gun makers that was initiated by the City of Gary in 1999. The suit is similar to a wave of federal suits which attempted to hold the gun industry liable for gun violence but were dismissed after George W. Bush signed a law that immunized the industry in 2005. A year later an Indiana appeals court ruled that the Gary suit was still valid, which is where things sat until last week’s effort by State Senator Jim Tomes and others to get rid of the issue once and for all.

What I found interesting about the issue was the statement attributed to Tomes that the existence of the lawsuit made it impossible for Indiana to attract the gun industry which represented an opportunity for new jobs since the industry’s output, according to Tomes, was worth $37 billion a year.  This number comes from a report issued in 2013 by the NSSF which takes the estimated economic value of the industry’s entire output, which is computed by adding together the wages paid to everyone employed in the industry, along with the revenue of every company supplying products sold by the industry.

conference program pic                There’s only one little problem with this information.  The $37 billion figure is based on the total output of manufacturers, suppliers and induced expenditures.  But if I own a company that makes guns, for example, and the cost of the gun that I sell to a wholesaler includes what I paid a supplier for a part that I use in manufacturing that gun, then adding his revenue to my revenue overstates the total value of the finished product I sold by whatever amount it cost me to add his part to my gun.  In addition, induced expenditures are just an estimate of the percentage of wages that the average consumer spends on everything he consumes, which may or may not be a real number that can be compared to numbers based on wages, profits or sales.

Okay guys, let’s cut the bullshit and get down to business.  The bottom line is that the industry employs 112,000 people who get paid an average of $40,000 a year.  In other words, if the gun business disappeared tomorrow, 112,000 people would be out of work and the GDP would take a hit of fufteen billion bucks; i.e., total revenues plus what they paid the help. Actually, that’s nothing to sneeze at, considering that the entire retail sporting goods market generates about $60 billion in sales revenue each year.

But what the gun industry always likes to ignore in touting its economic strength is the downside of what its products cost in terms of the financial toll of 11,000 homicides and 40,000-50,000 injuries each year.  According to the CDC, the medical costs of non-fatal and fatal gun injuries runs between $2 and $3 billion a year.  While we don’t have a good figure on what these injuries mean in terms of lost income, it wouldn’t be unreasonable to peg that number at somewhere between $10 and $14 billion a year, particularly since many shooting victims survive the assault but are too badly injured to ever rejoin the workforce again.

Comparing the economic losses generated by guns against the economic contribution that the gun industry makes to the GDP, we end up in a zero-sum game.  For every person who pulls down a decent wage from making or selling guns, someone else takes a bullet, the cost of which completely eliminates the financial value that the gun used in that assault represents.  If State Senator Jim Tomes wants to promote the idea that the gun industry creates all kinds of good-paying jobs, someone should show him the other side of the ledger and see if he can understand that guns versus gun violence equals no economic gain at all.

Gun Trafficking in America - cover

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One thought on “Does The Gun Industry Create Jobs? Only If The Gain Is Worth The Loss.

  1. This post has a picture of your 5th book so am responding to that.

    Michael:

    I read your 5th book and was wondering if you were trying to get back in the good graces of the NRA again since you took on the AFT. I have a question about a ‘gun control’ proposal I have wondered about run by states who adopt it rather than the federal government. First a quote to prove I read your book:

    “First the buyer signs and dates the form, then the dealer dates the transmission of the information to NICS and the result and then dates and sign the form when the transaction and the NICS check has been completed.” from R. Weisser, Michael (2015-02-11). Gun Trafficking in America (Guns in America Book 5) (Kindle Locations 723-724). TeeTee Press. Kindle Edition.

    I have been wondering if there ever would be a way to get the pro and anti sides of the gun debate to agree on what to do about having all actual transfers of gun ownership be like automobiles except that it would not be ‘registration’ like there is for cars. If you give your kid a car for a present somehow the car has to end up in the kid’s name as the owner.

    From your perspective would this work? Again, I am thinking at the state level so ATF wold not be the one to enforce it but just maintain the federal database of bad guys and states would have to maintain a separate database of restraining orders and perhaps other things. And of course there is no guarantee bad people still would not get weapons to wreak havoc with on the black market.

    There are three pieces of paper needed: one for the seller, one for the buyer and one for the person with the FFL. With this approach there is proof of a background check but no registration of who has the gun. A seller takes the gun to an FFL and the buy meets the buyer there and the FFL does the phone call and fills out three pieces of paper after proper identification etc but no 4473 form is involved and no questions about one’s personal life.

    The seller gets a piece of a paper (a state form) identifying the gun and the fact the background check was done (like the information in the quote above). The paper does not have buyer information on it.

    The buyer gets a piece of a paper (a state form) identifying the gun and the fact the background check was done (like the information in the quote above). The paper does not have seller information on it.

    The person who made the calls would log the fact the call was made (again a state form) and the outcome like in the quote above but nothing else. And
    i mean nothing else like names and serial numbers at all.

    Perhaps there should be a unique ID on all three forms to link either of the pieces of paper the buyer and seller get back to the FFLs log to verify it is not fraudulent. (the number would need to be on the buyer and seller’s papers also).

    So the NRA could not call this registration since it takes both the buyer’s and seller’s forms to link the buyer and seller. They could call it a nuisance or infringing on my God-given rights etc like they always do.

    The anti groups could be unhappy that there is no way to trace a gun after the transfer but if that is the case it makes it sound true they really want to register and perhaps confiscate guns instead of honoring the 2nd amendment.

    The FFLs? I would guess it means revenue but also more paperwork if the states want to inspect things. (again I think this needs to be done at the state level like in Washington state though I wonder how good that law is the way they did it).

    Now the ATF? My bet is they would want to be in charge anything like this so would try to block it from happening like requiring all FFLs to use ATF form 4473 on every gun FFLs touch even it is is in their inventory for 10 minutes. Perhaps Congress would need to be involved to keep ATF out of it.

    Any thoughts?

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