February 29, 2011

Recent Veterans' Unemployment Figures Dip, but Skeptics Fear Drop may be Misleading

BLS Report shows unemployment improving, but there is more to stats than meets the eye

WASHINGTON, DC - A report was issued at the end of March from the Bureau of Labor Statistics that on the surface seemed to be a promising sign for veterans’ unemployment. However, the good news has received a dose of cold water from experts claiming that now is no time to declare victory with military joblessness.

The February jobs report showed that the unemployment rate for OEF/OIF veterans had dropped significantly to 7.6 percent, which followed the decline from January and was actually lower than the 8.3 percent overall unemployment rate for the first time in years. Another survey of veteran’s ages 18-24 showed a sharp decline as well, with 17 percent of young veterans out of work compared to 30 percent a few months ago.

However, despite these positive numbers, many analysts are not comfortable calling this decline a trend.

"We tend to call a trend a trend and we are starting to see what seems like a trend, but we don't want to overstate it and say the problem is solved," said James Borbely, an economist at the Department of Labor.

Also contributing to this doubt was another report that assessed the veteran unemployment rate during the entirety of 2011 that painted a bleaker picture. The annual report said the unemployment rate for those who served in Iraq and Afghanistan averaged 12.1 percent, versus 8.7 percent for the overall population and up from 11.5 percent for veterans the year before. Furthermore, the last sampling involving young veterans ages 18-24 taken at the end of 2011 showed their rate at a whopping 30 percent, rates comparable to that of the Great Depression.

Kevin Schmiegel, who is leading the U.S. Chamber of Commerce efforts to find jobs for veterans, said the monthly drops cited for January and February seem so different from past results that he's skeptical that the jobs picture has improved that much. He's putting more stock in the latter report, even if the information is more dated.

"If you look at a whole year, you're going to get a more accurate picture than if you look at an individual month," Schmiegel said. "I think the data reflect that the picture hasn't gotten better."

According to GI Go Fund Executive Director Jack Fanous, the veteran unemployment rate may be coming down in the future, but such a steep decline in a short period is not reflective of current realities.

“Unemployment among veterans will go down in the future, I am confident of that. I think the recent federal tax credit to hire veterans (VOW to Hire Heroes) coupled with strong and knowledgeable companies showing the intelligence to hire vets will bring unemployment down significantly. But it is too soon for anything definitive. Our Job and GI Bill at Rutgers Newark earlier in the month featured over 500 veterans looking for work, more than we’ve had at any job fair in years, which shows just how great the need still is out there.”

What could also play a role in this is the reduction in post-9/11 GI Bill benefits that took effect last year. In August 2011, the VA capped GI Bill benefits at $17,500 per year and linked the monthly housing stipend to the number of credit hours a student-veteran takes.

This was a big reduction from the previous unlimited tuition reimbursement and the full housing stipend provided for full-time or part-time students. And while many veterans who were already receiving the GI Bill benefits were grandfathered into the new program and were able to keep their current benefits, some have nevertheless had trouble receiving benefits and has led many to look for work in order to avoid being in debt.

There are a number of possible explanations, but there is one general consensus about the new veteran unemployment prospects: wait and see.