Texarkana, TX 58° View Live Radar Sat H 59° L 38° Sun H 60° L 39° Mon H 58° L 40° Weather Sponsored By:

Study: Depot layoffs will hurt economy

Study: Depot layoffs will hurt economy

Job losses will lead to loss of hundreds of millions of dollars

July 15th, 2018 by Karl Richter in Texarkana News

A University of Arkansas study concludes that recent layoffs at Red River Army Depot will have negative effects that reach far beyond those who lost their jobs, resulting in hundreds of millions of dollars lost in the regional economy.

The study used a computer model to project the total jobs, wages and productivity to be lost as a result—direct or indirect—of nearly 600 RRAD layoffs announced in the spring.

Document: Economic Impact of RRAD Layoffs

Economic Impact of RRAD Layoffs

It focuses on the five counties where 551 of the 585 people who lost their jobs resided: Bowie, Cass and Red River counties in Texas and Miller and Little River counties in Arkansas. It refers to those counties as the Texarkana Labor Shed.

Assuming those workers will seek jobs elsewhere and relocate, the study projects that the direct loss of their wage earnings will be almost $67,000 each per year, taking a total of $36.9 million out of the labor shed's economy annually.

That loss of earnings "spills over into consumption expenditures that eventually have a multitude of effects on economic activities that reduce output, GDP (gross domestic product), earnings, and the number of jobs in the labor shed.

"It is estimated that the loss of $36.9 million in wage earnings would reduce economic activities (output) by approximately $25.4 million in the Texarkana Labor Shed. In turn, this reduction contracts GDP by $14.9 million and reduces earnings further by $7.9 million," the study report states.

The study estimates that the layoffs will result in 391 additional jobs lost in the labor shed, including 168 jobs lost as a result of fewer purchases in the RRAD supply chain and 223 as a result of reduced consumer spending.

In its final conclusion, the study estimates a total loss in economic output of $255 million, in GDP of $161 million and in household earnings of $85 million.

The International Association of Machinists and Aerospace Workers, which had members among those laid off, commissioned the study from the Arkansas Economic Development Institute, a part of the College of Business at University of Arkansas at Little Rock.

Researchers used economic modeling software called RIMS II to reach the study's conclusions. Developed by the Bureau of Economic Analysis, RIMS II "is a tool providing users a means to assess the potential economic impacts of various economic events. The model produces input-output multipliers that estimate a variety of impacts including output, employment, and earning effects," the study report states.

On Twitter:
@RealKarlRichter

Getting Started/Comments Policy

Getting started

  1. 1. If you frequently comment on news websites then you may already have a Disqus account. If so, click the "Login" button at the top right of the comment widget and choose whether you'd rather log in with Facebook, Twitter, Google, or a Disqus account.
  2. 2. If you've forgotten your password, Disqus will email you a link that will allow you to create a new one. Easy!
  3. 3. If you're not a member yet, Disqus will go ahead and register you. It's seamless and takes about 10 seconds.
  4. 4. To register, either go through the login process or just click in the box that says "join the discussion," type your comment, and either choose a social media platform to log you in or create a Disqus account with your email address.
  5. 5. If you use Twitter, Facebook or Google to log in, you will need to stay logged into that platform in order to comment. If you create a Disqus account instead, you'll need to remember your Disqus password. Either way, you can change your display name if you'd rather not show off your real name.
  6. 6. Don't be a huge jerk or do anything illegal, and you'll be fine.

Texarkana Gazette Comments Policy

The Texarkana Gazette web sites include interactive areas in which users can express opinions and share ideas and information. We cannot and do not monitor all of the material submitted to the website. Additionally, we do not control, and are not responsible for, content submitted by users. By using the web sites, you may be exposed to content that you may find offensive, indecent, inaccurate, misleading, or otherwise objectionable. You agree that you must evaluate, and bear all risks associated with, the use of the Gazette web sites and any content on the Gazette web sites, including, but not limited to, whether you should rely on such content. Notwithstanding the foregoing, you acknowledge that we shall have the right (but not the obligation) to review any content that you have submitted to the Gazette, and to reject, delete, disable, or remove any content that we determine, in our sole discretion, (a) does not comply with the terms and conditions of this agreement; (b) might violate any law, infringe upon the rights of third parties, or subject us to liability for any reason; or (c) might adversely affect our public image, reputation or goodwill. Moreover, we reserve the right to reject, delete, disable, or remove any content at any time, for the reasons set forth above, for any other reason, or for no reason. If you believe that any content on any of the Gazette web sites infringes upon any copyrights that you own, please contact us pursuant to the procedures outlined in the Digital Millennium Copyright Act (Title 17 U.S.C. § 512) at the following address:

Copyright Agent
The Texarkana Gazette
15 Pine Street
Texarkana, TX 75501
Phone: 903-794-3311
Email: webeditor@texarkanagazette.com