23.4.2026 by Lorah Steichen - While Pentagon budgets have steadily increased in recent years, the arms industry has become more consolidated, more automated, and less labor-intensive. The warfare state is not an effective economic development strategy for working people.
Amid the United States’ illegal, costly, and broadly unpopular war in Iran, the Trump administration recently asked Congress to approve a record-breaking $1.5 trillion military budget — the largest military spending proposal in US history. The administration claims that record war spending will pay for a “once-in-a-century revival of American industry,” while hawks in Congress argue that the spending spree will “revitalize” the military industrial base by investing in a “skilled, patriotic defense workforce.”
But new research from Transition Security Project suggests that military spending increases are unlikely to translate into broad gains for American workers.
While Pentagon budgets have steadily increased over recent decades, the arms industry has become more consolidated, more automated, and less labor-intensive — upending the idea that the warfare state is an effective economic development strategy for working people, and strengthening the case for a state-led shift toward a civilian industrial base focused on green manufacturing.
Half of the Pentagon budget is funneled to private weapons manufacturers, but higher spending has not produced more jobs. Employment in military industries has fallen significantly since Cold War peaks, from an estimated 3.2 million workers during the 1980s to about 1.1 million in 2020, despite Pentagon budgets growing by roughly 22 percent over the same period. Meanwhile, job quality in the sector has also deteriorated: wages have declined, pensions cut, and unionization collapsed to roughly 10 to 14 percent on average across major military contracting firms, while company revenues from military contracts have grown substantially.
Taken together, these trends challenge a persistent assumption in Washington policymaking that military spending is an effective jobs program for American workers. In reality, rising Pentagon budgets have become increasingly decoupled from employment growth, delivering diminishing returns to workers even as they enrich a small group of military contractors, executives, and shareholders.
Today weapons production is highly capital-intensive, meaning the war industry is one of the least effective ways to create jobs. This dynamic has been reinforced by long-term changes in how the workforce is organized: subcontracting and strategic relocations to lower-wage, weaker-union regions have fragmented the workforce and eroded collective bargaining power.
Emerging trends in automation, low-cost and expendable “attritable” weapons, new defense tech companies, and corporate consolidation are likely to further weaken organized labor in the sector and reduce the availability of stable jobs. At the same time, the rise of a new cohort of Silicon Valley military tech firms like Anduril, Palantir, and SpaceX is only accelerating this shift. Backed by venture capital and growing political influence, these firms are helping to remake the defense industrial base around speed and scalability over cost or even performance, incorporating “just-in-time” manufacturing and distributed supply chains.
Flush with multibillion-dollar Pentagon contracts for AI systems, drone swarms, and autonomous platforms, these companies are poised to join the top tier of military contractors — whether by displacing the legacy firms or expanding alongside them as budgets bulge.
Military tech firms are already reshaping the sector. Citing “increased pressure from non-traditional entrants,” Northrop Grumman recently told its workers to expect a “culture change,” announcing plans to “fail fast, learn faster,” using artificial intelligence to automate manufacturing processes. The company — one of the “Big Five” weapons profiteers, deriving roughly 85 percent of its revenue from US government sales — is a key contractor in Donald Trump’s flagship Golden Dome missile defense initiative, a project Pentagon watchdogs and even some engineers have characterized as technologically unfeasible, while warning that it could ultimately heighten rather than reduce nuclear risk, undermining the national security rationale used to justify what could amount to a trillion-dollar taxpayer expense.
The growing influence of military tech barons in defense procurement reflects a long-standing pattern in which weapons contractors exert outsize political influence to secure sustained military funding, further consolidating corporate power while continuing to erode the unionized jobs that once defined the sector.
In other words, the US war industry is a dead end for workers.
But the solution isn’t to expand military spending or attempt to reform the war industry; it is to build a new industrial base focused on green manufacturing instead of military production — redirecting skills, infrastructure, and state capacity away from war and toward socially beneficial sectors that actually deliver stable, broadly shared gains for working people.
It’s not a new idea. In fact, military-industrial conversion was an oft-debated topic in Cold War–era labor and peace politics, when unions, activists, and some policymakers argued that military spending could be redirected toward civilian production to strengthen employment, reduce pervasive militarization, and better align public investment with social needs.
Labor unions, in particular, have long served as a crucial entry point for dialogue around industry reform and alternatives, in part because their members often have greater protections to express views at odds with their employers without risking being fired over speech. During the Cold War, the International Association of Machinists and Aerospace Workers — the largest union in the defense sector — advocated for worker-led economic conversion efforts amid a widening gap between the spiraling Ronald Reagan–era military budget and the economic realities of everyday Machinists and working-class communities.
Though conversion efforts waned after the Cold War, its central premise remains highly relevant as the need for a large-scale green industrial transformation becomes increasingly urgent. And while it doesn’t go as far as calling for economic conversion, the Machinists’ 2024 Climate Jobs Agenda articulates a role for its membership in “climate and clean energy industries,” stating that the union is “poised to push for solutions that protect our planet while building union power.”
And while modern efforts to build coalitions toward industrial conversion must contend with the nonunion majority of the military contracting workforce, with its high turnover and fractured subcontractor networks, these structural realities also make worker organizing and cross-sector alliances all the more important. This, in turn, creates a critical window for workers and their unions to advance coordinated transition strategies that align job security with broader public priorities and societal goals.
The case for economic conversion of military industries is pragmatic: for one, most military contracting firms already produce civilian goods and services alongside military technologies, reinforcing that military industrial sites can be used to produce far more than weapons. At the same time, public investment yields far greater employment and economic returns when directed toward areas like clean energy, infrastructure, health care, or education than when funneled into Pentagon spending. Shifting funding toward these sectors would not only increase overall employment, it would also reduce emissions and, most importantly, the violent loss of life embedded in military strategy, prioritizing universal safety over the profits of military contractors.
Redirecting public procurement power toward these sectors would mean using the state’s purchasing and contracting capacity to scale up renewable energy, green transit, and other essential infrastructure, steadily channeling investment into communities and industries that support decarbonization, job creation, and long-term economic stability.
While antiwar sentiment is arguably at its highest level in decades and war profiteering remains broadly unpopular across political parties, preferences for civilian public investment consistently outweigh calls for expanded military spending. Support for increasing the military budget is marginal; only one in ten Americans think the United States should spend more on war, while demand remains strong for investments that produce stable, socially necessary jobs. And for workers in military industries, planned conversion offers not a loss but the prospect of more secure employment in sectors that meet public needs while generating broader social benefit.
The task ahead is to align public policy with popular will: curbing militarism while delivering the jobs, stability, and public goods that people deserve.
