At a time when the Pentagon is considering plans to cut military spending and downsize the armed forces, our nation’s men and women in uniform are experiencing a crisis in career confidence.
U.S. servicemembers are increasingly worried about job opportunities for today’s out-of-work veterans – and they feel uncertain about the future of their own careers in the armed forces. Recent survey findings from the First Command Financial Behaviors Index® reveal that just one in four middle-class military families (senior NCOs and commissioned officers in pay grades E-6 and above with household incomes of at least $50,000) believe there will be sufficient jobs in the civilian workforce for unemployed veterans.
These anemic confidence levels underscore the high unemployment rates we are seeing among veterans today as well as proposed plans for defense cutbacks and downsizing tomorrow. Recent data by the Bureau of Labor Statistics shows unemployment among young veterans is over 13 percent. When active-duty servicemembers see highly trained and tested veterans struggling to meaningful work, they are justifiably worried about the thousands of vets who will be entering the civilian workforce in the next few years.
Military families are not particularly encouraged by government solutions, either. Three out of five servicemembers are aware of the VOW to Hire Heroes Act, a new law that provides employers with tax credits for hiring out-of-work veterans. But of those familiar with the VOW Act, nearly half are not confidentthat it will increase job opportunities in the civilian workforce.
In addition to concerns for out-of-work veterans, many servicemembers are worried about their own careers in the armed forces. The Index reveals that 37 percent of respondents are concerned about their future in the military. Top worries cited by servicemembers or their families are:
- Effects of downsizing forces/personnel (29 percent)
- Effects of budget cutbacks on pay, benefits, etc. (21 percent)
- Changes to benefits after retirement (19 percent)
- Being prevented from serving in the military by being forced out or not permitted to enlist (12 percent)
- Job security (11 percent)
Given anticipated cuts to defense spending, one in four respondents say they are "not at all confident" or "not very confident" about their career in the military. When asked to consider the effect of proposed cuts to military retirement benefits, career confidence falls even lower. Roughly one third of respondents say they are "not at all confident" or "not very confident" about their military career. Roughly two out of five respondents say they expect to continue serving in the military for five years or less.
Military families recognize the changes that are coming their way, and they are justifiably worried. It is worth noting that when asked about their future in the military, just 9 percent of respondents cited concerns about personal safety related to deployment. Certainly the risk of combat injury or death remains a real concern for our men and women in uniform, but it is now being overshadowed by vast financial and career uncertainties related to a shrinking defense budget. At a time when economic concerns continue to weigh heavily on many middle-class families, servicemembers and their families are facing the added worries of how their lives will be affected by a broad reshaping of the U.S. military.
Scott Spiker is Chief Executive Officer at First Command Financial Services, Inc. He is a Navy veteran and a graduate of the U.S. Naval Academy.
First Command Financial Services and its subsidiaries, including First Command Bank and First Command Financial Planning, assist American families in their efforts to build wealth, reduce debt and pursue their lifetime financial goals and dreams—focusing on consumer behavior as the first and most powerful determinant of results. Through knowledgeable advice and coaching of the financial behaviors conducive to success, First Command Financial Advisors have built trustworthy, lasting relationships with hundreds of thousands of client families since 1958. Compiled by Sentient Decision Science, Inc., the First Command Financial Behaviors Index® assesses trends among the American public’s financial behaviors, attitudes and intentions through a monthly survey of approximately 530 U.S. consumers aged 25 to 70 with annual household incomes of at least $50,000. Results are reported quarterly. The margin of error is +/- 4.3 percent with a 95 percent level of confidence. www.firstcommand.com/research Sentient Decision Science was commissioned by First Command to compile the Financial Behaviors Index®. SDS is a behavioral science and consumer psychology consulting firm with special vertical expertise within the financial services industry. SDS specializes in advanced research methods and statistical analysis of behavioral and attitudinal data.
First Command Financial Services, Inc., is the parent of First Command Financial Planning, Inc. (Member SIPC, FINRA), First Command Insurance Services, Inc. and First Command Bank. Financial planning services and investment products, including securities, are offered by First Command Financial Planning, Inc. Insurance products and services are offered by First Command Insurance Services, Inc. in all states except Montana, where as required by law, insurance products and services are offered by First Command Financial Services, Inc. (a separate Montana domestic corporation). Banking products and services are offered by First Command Bank. Securities products are not FDIC insured, have no bank guarantee and may lose value. A financial plan, by itself, cannot assure that retirement or other financial goals will be met. In Europe, investment and insurance products and services are offered through First Command Europe Limited. First Command Europe Limited is a wholly owned subsidiary of First Command Financial Services, Inc. and is authorised and regulated by the Financial Services Authority. Certain products and services offered in the United States may not be available through First Command Europe Limited.