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November 13, 2013

High Unemployment for Iraq & Afghan Vets

Patrick W. Allen

Since the height of the modern day great recession, the country’s unemployment rate has been on a downward slope.


This is true for civilians and military veterans alike. The most recent job report revealed that the economy added 204,000 jobs, while the unemployment rate sat at 7.3 percent. The report also showed veterans’ unemployment at 6.9 percent — lower than the national rate, as it has been before and after the recession.


Unemployment rate for recent veterans.


However, there is a catch. While it is true that veterans as a whole have a lower unemployment rate than non-vets, it is a different story for the men and women who served in Iraq and Afghanistan. Recent veterans, or Gulf War II-era veterans, have an unemployment rate that remains higher than the rest of the country.


As of October 2013, the unemployment rate for Gulf War II-era veterans sits at 10 percent. This has been the case since most of these vets began civilian life. But why is this so? The answer to this question requires the evaluation of contributing societal and economic factors.


Cause of unemployment of recent veterans.


In a study that looks at the plight of these young men and women, economists Jason Faberman and Taft Foster of the Federal Reserve Bank of Chicago present an interesting case.


While attempting to answer why so many of these vets are not finding jobs, their research shows that demographics and the labor market may have a minor role. However, they believe that wartime deployment is the major cause.




According to Mr. Faberman and Mr. Foster, Gulf War II-era veterans tend to be younger and less educated than the average worker. This is not a huge surprise considering that most new veterans enter the military with only a high school diploma. Their study finds that a little more than 14 percent of new veterans have a college degree. In the general population, young people with a high school diploma tend to have a higher unemployment rate.


Data from the Bureau of Labor Statistics (BLS) shows that individuals with a high school diploma have an unemployment rate of 7.3 percent, while people with a bachelor’s degree or higher sit at 3.8 percent. The BLS also shows that Americans between the ages of 20 and 24 have an unemployment rate of 12.5 percent. This rate declines consistently for older citizens.


However, while demographics may have a small role in Gulf War II-era veterans’ unemployment, history shows that this factor isn’t as significant as one might think. Yes, younger people tend to be unemployed at higher rates than older people; however, this has not always been the case for veterans. According to Mr. Faberman and Mr. Foster, between 1994 and 2004, the unemployment rate of new and older veterans remained similar. It was not until 2005 that recent veterans had a significantly higher unemployment rate than older veterans.


Labor Market.


The study also looks at the effect a poor economy has on the labor market.  The premise behind this line of thought is that the industries that tend to employ veterans (construction, manufacturing, transportation, utilities and government) were hit hardest by the recession.


While the study does show a decline in growth for these industries after 2007, they reached positive growth after 2010. And new veterans were hired in these fields at the same rate as the general public. Because of this, the labor market cannot completely explain the gap in employment between recent veterans and the general public.


Wartime Deployment.


In their research, Mr. Faberman and Mr. Foster conclude that wartime deployment is the major cause for high unemployment among new veterans. Factors they cite include:


&#61607 The physical and psychological trauma soldiers undergo in war.

&#61607 More war-related training as opposed to training that would take place during peacetime which could transfer better to the job market.

&#61607 Lower re-enlistment of individuals who might otherwise pursue a military career.


These factors are supported by data which shows the difficulty faced by some veterans after returning home from war.


A 2012 study from the Department of Veterans Affairs shows that nearly 30 percent of Gulf War II-era veterans treated at VA hospitals were diagnosed with PTSD (posttraumatic stress disorder). Also, in terms of re-enlistment, retention rates in a bad economy tend to spike, meaning that veterans often choose to remain in the military in an economic downturn.


However, according to Mr. Faberman and Mr. Foster, retention during the recession fell short of previous downturns as this period coincided with the wars in Iraq and Afghanistan. This, in turn, may have led to veterans more qualified for military careers pursuing civilian jobs.


Meeting our obligation to recent veterans.


This information opens the door for us to begin to understand why so many of our most recent veterans are struggling to find work after returning home. Also, it potentially provides more reason for our nation’s leaders to use restraint when considering military force as the effects of war go far beyond the immediate physical toll.


Currently, the Obama Administration and state governments have put in place efforts to increase the hiring of new veterans. These actions include efforts to have skills learned in military training recognized in the private sector, along with putting incentives in place for companies that hire veterans.


While these actions are admirable, alone, they are not enough. As a nation, we will not have begun to meet our obligation to the veterans of Iraq and Afghanistan until they are able to find employment at a rate that at least meets those of the men and women who served before them.


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