Guns and the Economy

Katie Pavlich

4/24/2013 7:30:00 AM - Katie Pavlich

The firearms industry offers well-paying jobs, blossoming retail sales, and—liberals’ favorite—whopping tax revenue. But threats of new regulations and bans, combined with the overwhelming power of the executive branch when it comes to gun control, are putting at risk the industry’s positive role in the economy. Katie Pavlich investigates for Townhall Magazine.

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... Overall, the combined size of the U.S. commercial gun and ammunition market totals around $32 billion in economic impact nationwide.

According to the National Shooting Sports Foundation (NSSF), in 2011 alone, industry equipment expenditures hit $5.3 billion. Firearms make up $2.4 billion of that figure, while ammunition for rifles, handguns and shotguns totals $693,249,814. Other accessories like telescopic sights, decoys and game calls, handloading equipment, components, other hunting and shooting equipment, hunting dogs and associated costs make up the rest. Total spending by all hunters tops $24 billion each year. The majority of these items are purchased in sporting goods stores, specialty shops and pro-shops employing thousands.

There are nearly 60,000 gun dealers in the U.S. The average salary of a gun industry worker is $140,000 per year, according to First Research. Nearly 100,000 people are employed directly by the industry while another 111,000 are employed indirectly.

Take Turner’s Outdoorsman, a California company founded in 1971 with 15 stores and more than 300 employees.

“Our employees have medical benefits available to them,” Turner’s Outdoorsman Vice President of Operations Bill Ortiz tells Townhall. “We’re matching a 401k for the third year in a row, this year at 4 percent. Vacation, holidays, all of those benefits.”

When Ortiz talks about employees and benefits, he isn’t just talking about management or senior positions. Basic sales and cashier positions are eligible for benefits.

Beyond providing well-paying jobs to hundreds of people, Turner’s operations benefits the local real estate market through leases for their stores. Outside of their stores and distribution centers, Turner’s partakes in a retail tackle show each year to showcase and support vendors whose goods are sold by the company. At the show, Turner’s sets up a full-sized store to allow vendors to sell their goods.

The show attracts 15,000 consumers every year who test out countless amounts of new firearms. The show setup generates in a week what one store would have generated in a month. The owner of the rented facility gets the gate and parking lots sales during the event, and vendors and people working concessions see a positive impact on their bottom line.

“There are many vendors that don’t sell stuff in our stores day in and day out that are allowed to come—guys that do multiple earplugs and other types of shooting-related things that we don’t sell,” Ortiz says. “Because of our accounts and the size of our accounts, we’re probably responsible for quite a few sales representatives in Southern California that wouldn’t necessarily be employed if it wasn’t for Turner’s and an account like Turner’s.”

Sales contribute to higher profits and more taxes at the local, state and federal level, not to mention that employment with the company produces more income tax and property tax. Surprisingly, despite the many gun control measures it has in place, California has one of the highest number of Federal Firearms Licensees in the country.

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“I don’t think it’s widely appreciated just how internationally connected the U.S. firearms sector is,” Heritage Foundation Senior Research Fellow Ted Bromund, Ph.D., tells Townhall.

Firearms imports are approximately 35 percent of the U.S. firearms market, according to the ATF and United States International Trade Commission. About 5.5 million are manufactured each year in the U.S., with approximately 250,000 being exported by the U.S. while 3.5 million additional firearms are imported from other countries, totaling 9 million new firearms in the U.S. commercial market each year.

“There are a lot of countries … [from which] the U.S. imports at least 10,000 firearms a year. Slightly over half of them are handguns and the remainder being rifles and shotguns,” Bromund says. “What you see is that this is … worldwide traffic directed to the United States.”

SpringField Armory, for example, is located in Croatia, and one of the company’s most popular pistols, the Spring- Field XD semi-automatic handgun, is manufactured there. Beretta Italy manufactures shotguns and exports them to the United States.

Brazil serves as the largest foreign commercial exporter to the United States and exported 846,619 firearms in 2011. Austria was second, coming in at 522,638, according to ATF. Germany, Belgium, Russia, Turkey, Canada, Romania, Czech Republic, Finland, Spain, Italy and Croatia and many others all depend on purchases from the United States.

Many of the countries currently exporting to the United States are part of a fragile European Union that’s already on the brink and has very little economic growth. Eighty-five percent of the commercial firearms that are sold in the world for commercial uses are used in the U.S. marketplace. In 2012, more than 100 countries attended the firearms industry’s annual trade show known as the SHOT Show. SHOT is also the fifth-largest annual trade show held in Las Vegas.

“We want to have that trade to be strong,” Executive Director of the FireArms Import/Export Roundtable Trade Group Johanna Reeves tells Townhall. “If our ability to deal international is impacted negatively, then what that’s going to do is force our allies to go somewhere else. And who are they going to go to? China.”

But is international trade really up for grabs when it comes to new gun control measures? Absolutely. In fact, many expected President Obama to take advantage of this readily available power grab—the banning of imports—a long time ago.

“They don’t even have to do anything by legislation to have an impact on the industry because the powers they have … through two [existing] laws: [the] Gun Control Act and Arms Export Control Act,” Reeves says. “Congress gave ATF enormous power in what they can allow and disallow for imports.”

The executive branch has power in this area for two main reasons. Current law gives ATF unfettered justification or power to decide what is and what is not “sporting.” The United States only allows the import of firearms that meet this definition and, therefore, ATF has unrestricted power over what’s importable or not.

Excerpted from Townhall Magazine's May feature, "A Force for Good: Guns and the Economy" by Katie Pavlich. To read more of Pavlich's report, subscribe to Townhall Magazine today.