Loss of depot jobs likely to hurt local economy

(25th January, 2012)

With the potential loss of hundreds of jobs at Anniston Army Depot, few aspects of the local economy will likely escape unscathed, according to economists who spoke with The Star Wednesday.

The U.S. Army announced Wednesday it will cut approximately 500 jobs from the depot beginning after March 30 due the ending of the Iraq war and decreased funding. While hundreds will soon be without steady income, the decision is expected to have more far-reaching consequences. From retail to tax revenue to housing, the disappearance of so many jobs will be felt throughout Calhoun County’s economy, some experts say.

“The loss of 500 jobs would be a pretty profound impact in any county or city,” said Keivan Deravi, professor of economics at Auburn University Montgomery.

Deravi said without steady income, the unemployed workers would spend less at retail business and could find it hard to pay their mortgages. Many of them might also have to leave the county or state to find work, meaning a permanent loss of retail spending and tax revenue for the area. Based on average annual spending trends in the state, he said, the loss of 500 people could mean between $10 million and $25 million in estimated lost annual retail and tax spending for the area – if the laid-off workers stay unemployed.

Deravi said that while the state could expect an economic hit due to the military draw-downs under way, the effect might not be too bad since the overall national economy has shown relative improvement in the past year.

“The best-case scenario is that the economy starts picking up speed as the draw-downs really kick in,” he said.

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Anniston Star

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