Veterans unemployment is at historic lows. Can it last?

Years of focus on finding post-military jobs for service members have helped push the veterans unemployment rate to historic lows. Now, the biggest obstacle to veterans finding jobs may be Congress itself, if the debt-ceiling budget fight leads to a gut-punch for the U.S. economy.

Officials from the Bureau of Labor Statistics announced on Friday that the veterans unemployment rate fell to 2.1% in April, the lowest mark since the start of 2000, when the agency began tracking monthly unemployment for the group.

Four of the five lowest monthly veterans unemployment rates recorded in the last 23 years have come since early 2022. The veterans jobless rate has been at least 1% lower than the national rate each of the last three months. The country’s unemployment estimate for April was 3.4%.

“It’s hard to see this as anything but great news,” said Jeff Wenger, senior economist for the RAND Corporation. “Unemployment is falling for all groups in America, but it’s falling even faster for veterans. The country really focused on this for years, and now we’re winning.”

That focus has included years of improvements to the military’s transition programs, boosted funding for Veterans Affairs’ job assistance efforts, and a concentrated drumbeat from congressional lawmakers about the value of hiring veterans.

Three years ago, at the start of the COVID-19 pandemic in America, more than 1 million veterans in the United States were collecting unemployment benefits. Last month, that number was about 184,000 individuals.

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“In a lot of ways, we’ve seen a full reversal of the ‘broken veteran’ narrative,” Wenger said. “Today, instead of seeing veterans as not employable, we’re seeing companies really seek them out.”

But in a twist, Congress’ current fight over the country’s debt ceiling may threaten that positive veterans employment news. Last month, analysts from the Brookings Institution warned that even with a short-term default “the economy is likely to suffer sustained — and completely avoidable — damage.”

A politically-based recession brought on by the effects of a national credit default could hit industries with high populations of veteran employees.

“When we’ve seen the technology sector layoffs in recent months, that’s an industry that doesn’t really have as many veterans, so the effects have been minimal,” said Rosalinda Maury, director of applied research at the Institute of Veterans and Military Families at Syracuse University.

“But industries like leisure, hospitality and retail, those are ones that could really hurt veterans if there are economic issues during the summer.”

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Cutbacks to transportation jobs brought on by slower corporate growth or cutbacks would also significantly impact veterans. About one in every 13 working veterans in America today has a job in that industry. For non-veterans, it’s about one in every 20 workers.

However, Maury said the biggest potential impact would be if a debt ceiling default caused issues with federal and state government hiring, or forced furloughs of those workers. Nearly one-fourth of all veterans have jobs in federal or local government posts, well above the 13% rate for non-veterans.

Wenger said if such a situation arises, the government jobs issues are likely to be only a temporary problem, unless the political showdown drags on for months. In that case, veterans unemployment is likely to increase as national unemployment rates also rise.

“It’s hard to be too doom and gloom right now on veterans employment,” he said. “But we have to see what happens next.”

Congressional leaders are scheduled to meet with President Joe Biden on Tuesday to discuss solutions for the debt ceiling impasse. The May unemployment numbers for veterans are due out on June 2, around the same date that Federal Reserve officials have warned the country may hit the debt limit and start seeing economic side effects.