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Douglas P. McCormick
Douglas P. McCormick
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Living paycheck to paycheck and struggling to make ends meet has become all too common for American households, particularly for our military families. The Department of Defense has made great strides to promote financial literacy, financial independence and economic empowerment within the veteran community. They have accomplished this through programs such as home and small business loans, access to education, access to government contracts through veteran preferences in contracting and access to career and business training through transition assistance programs. But in spite of this substantial progress, we have yet to tackle the largest opportunity to create financial security and readiness among this community: extending this financial and economic empowerment to military spouses.
We expect our military and their families to be portable, but military spouses are not afforded the same expectation when it comes to their careers. Ninety percent of military spouses are female, and it’s imperative that the military and corporate communities come together to ensure that these women have access to attractive professional opportunities while their spouses are off defending American freedom and values.
Yet, according to a recent study commissioned by Blue Star Families, military spouses have lower labor force participation rates and experience unemployment and underemployment at substantially higher rates than the broader population. The study found that 43 percent of military spouses do not participate in the workforce compared to 26 percent of civilian spouses with similar characteristics. Military spouses face unemployment rates of 18 percent compared to the national average of 4.4 percent. For the lucky spouses who find employment, 35 to 40 percent are considered underemployed, defined as having lower compensation levels relative to their education and experience level.
This cost to society related to this lack of opportunity is estimated to be between $710 million to $1.07 billion per year. But more concerning than the economic cost is the unnecessary financial strain this places on a soldier’s family, the reduction of battlefield readiness and effectiveness and a resulting decrease in the military’s ability to attract and retain the best talent.
This problem is also felt on a personal level. These numbers translate into real hardship in the lives of real people. Take Amanda Yeram, the wife of a U.S. Marine. A former Marine, mom and college graduate, Amanda had hopes of finding a job that would help support her family. But for five years after she left active duty — a period where her husband continued his military service — Yerman struggled to even get an interview.
“Employers want to know that the person they hire and invest time in training is going to be around for a while,” acknowledged Yerman. “But when your family is changing military bases every two or three years, that is not always an option.”
There are numerous plausible explanations for the disparities that Amanda and thousands of other military spouses experience, from the challenges of maintaining a demanding job while a partner is deployed for extended periods of time to lack of career opportunities where most soldiers are stationed, frequent relocations and cultural norms that may promote a more traditional caregiver role for a military spouse. While the cause of poor economic opportunity for spouses may be debatable, the need to rectify it is not.
Fortunately, the military can address this problem with increased awareness, resources and smart policies. It must start with an expanded definition of veteran financial readiness, one that goes beyond the soldier. Financial readiness and opportunity is a family issue — not a soldier issue — and lack of economic opportunity has negative consequence regardless of who in the family experiences it. We recommend four initiatives to overcome this challenge:
1. Family-focused financial literacy training: The services have long recognized that a military career presents unique financial demands for soldiers and has created programs to teach them how to navigate these challenges. Military spouses should be included in this training. They are more likely the people who will manage family finances during periods of prolonged separation and the ones who must be prepared to assume these responsibilities alone should their partners not return from combat. Finally, with proper training and skills, the spouse can be an important contributor — both in terms of income and knowledge — when the family transitions back to civilian life.
2. Career counseling for military spouses: Today, we have transition assistance training for soldiers which teaches them how to translate their military service experiences into good civilian careers. We need a similar program for military spouses at the beginning of service that teaches them how to use their civilian skills within the military ecosystem and develop new skills that are easily portable when the family is forced to move. Basic training in this area will promote employment during active duty and empower spouses to build an interesting career, which can be an important family asset after service.
3. Expanded eligibility of veteran empowerment programs: The service has successfully promoted economic opportunity among veterans through the GI Bill, Small Business Loan Programs and government contracting preferences, which promote access to education, capital and business opportunities. When determining eligibility for these benefits, we should not discriminate between service member and spouse; these programs should be designed to promote opportunity for the military family, not simply the veteran. The Small Business Administration is leading the way with this mindset by making a variety of loans, business education and counseling services available to military spouses. However, we need to do more: GI Bill benefits should be fully transferable to spouses without limitation, and a small business owned by a military spouse should receive veteran-owned contracting preferences.
4. Public-private partnerships promoting remote employment: While companies struggle to find and retain the right talent, technology is rapidly changing the norms of employee relationships and the viability of telecommuting. DoD, veteran service organizations and the private sector must work together to facilitate an environment that helps companies identify and recruit underemployed military spouses. For example, Blue Star Families recently partnered with Salesforce.com to train military spouses for technical career paths that are both well-paid and flexible.
Maximizing soldier welfare necessarily means ensuring family welfare. The biggest opportunity to achieve financial security for our military families resides in securing attractive employment opportunities for military spouses. Military service is a family business — let’s ensure we take care of the family.
Douglas P. McCormick is the author of "Family Inc.: Using Business Principles to Maximize Your Family's Wealth." Currently Managing Partner at HCI Equity, McCormick has spent two decades managing money for institutional clients such as insurance companies, pension funds, entrepreneurs and high net-worth families, helping them grow their businesses to create sustainable long-term value. McCormick holds a Master of Business Administration from Harvard Business School and a Bachelor of Science in Economics from the U.S. Military Academy at West Point.
Kathy Roth-Douquet is CEO of Blue Star Families, the nation’s largest chapter-based military family organization, and is the recipient of the Secretary of Defense Medal for Outstanding Public Service.
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