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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