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Pentagon Payrolls Fuel Nation's Fattest Income Growth

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Anyone who has ever spent much time hanging out around military bases in the United States knows the kind of businesses that flourish just outside the main gate: used car lots, liquor stores, tattoo parlors and other commercial enterprises that confirm the U.S. military is overwhelmingly young and male. The pawnshops, rent-to-own stores and payday-loan joints also suggest that money is tight. But here’s one thing about military paychecks: they are reliable, and they keep coming, especially when the nation is fighting two wars.

That’s what makes new data from the federal government’s Bureau of Economic Analysis so interesting. As one might expect amid a long recession, average personal income in the 366 Metropolitan Statistical Areas — basically cities, to folks like us — fell nearly 2 percent in 2009. It dropped in 223 SMAs, rose in 134, and stayed flat in nine. Looking more closely at the 134 where average income rose, much of the rise was due to payments like unemployment insurance. Net earnings by workers actually bumped up in only 57 MSAs.

Your tax dollars at work: the Air Force's Arizona "boneyard" of no-longer needed warplanes/DoD photo

Government payrolls were responsible for much of that growth — and military paychecks were the key engine of income growth for many of the cities that saw their average pay grow the fastest last year. In fact, the 11 cities with the fastest income growth all boast major military installations that help drive their local economies:

– Jacksonville, N.C., home to the Marines’ Camp Lejeune, saw its personal income grow by 14.4 percent in 2009, the biggest hike in the nation.

– Fayetteville, N.C., home to the Army’s Fort Bragg, saw its personal income rise by 6.6 percent.

– Clarksville, Tenn., home to the Army’s Fort Campbell, had a jump in personal income of 4.6 percent.

– Killeen, Texas, home to the Army’s Fort Hood, saw its income jump by 4.5 percent.

– El Paso, Texas, home to the Army’s Fort Bliss, had a personal-income boost of 3.8 percent.

– Colorado Springs, Colo., home to the Army’s Fort Carson and the Air Force’s Schriever and Peterson bases, the Air Force Academy, and the Pentagon’s Cheyenne Mountain command post, saw its personal income rise by 2.1 percent.

– Honolulu, Hawaii, home of the Navy’s Pacific Command, had a 1.2 rise rise in personal income.

–Norfolk, Va., home of the Navy’s Atlantic Fleet, saw its income rise by 1.2 percent.

– Washington, D.C., home of the Pentagon and dozens of other military posts, had a 1.1 percent boost in personal income.

– San Antonio, Texas, home to many Air Force and Army bases, saw its personal income rise by 0.8 percent.

– Baltimore, Maryland, home to Fort Meade and its massive National Security Agency, had a  personal-income hike of 0.7 percent.

These data are analyzed in a new report by the National University System Institute for Policy Research (now there’s a snappy name), which studies the economy of San Diego. Hey, isn’t that a big Navy town? You bet. “San Diego is holding up much better than the rest of the state in recent years largely because military payrolls significantly increased,” the institute’s study notes. “Absent that countervailing factor, the region would likely be suffering much higher rates of unemployment and much graver economic dislocations.” The Pentagon could only do so much: military payrolls in San Diego rose from $9.9 billion to $11.2 billion last year, a 13.5 percent hike. Unfortunately, private-sector paychecks plunged by $4 billion.

The $64 billion question: what does it mean when the nation’s cities with the fastest-growing payrolls are dedicated to fighting wars instead of cancer, building brigades instead of bridges, and training combat engineers instead of computer engineers?

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