Underemployment And Why It’s the Real Problem for Transitioning Veterans
On its worst days, veteran unemployment was at an annual high of 9.9%. That was back in 2011. For younger veterans, the numbers were grim: as high as 34.5%—higher than at the peak of the Great Depression. Over the years, a concerted effort to get those veterans working led to record lows.
These days, veteran unemployment tends to sit lower than the national average. On its face, that sounds like good news (and it is), but it also obfuscates a troubling truth.
Unemployment measures whether you have a job. It says nothing about whether that job is any good, if it uses your skills, pays what your experience is worth, or whether it has anything to do with the time spent leading people and being good at what you did in the U.S. military. It also doesn’t measure how you feel about potentially being undervalued, underutilized, and/or underpaid. That’s called “underemployment,” and for hundreds of thousands of veterans navigating their first steps into civilian life, it’s a common crisis.
The Meaning of Underemployment
Underemployment is the mismatch between what a veteran is capable of and what they're actually doing, usually when someone holds a job that doesn't match their education, experience, or skill level. Underemployment doesn’t just undermine financial stability; it can wreck your entire sense of self-worth. It can mean working part-time when you want full-time. It can mean working a job for which you are dramatically overqualified. For veterans, it can find a former NCO who managed a workshop filled with people and equipment in life-or-death scenarios working an entry-level role that could have been filled by someone fresh out of high school, not the Armed Forces of the United States.
It can feel like your entire career is being wasted. And it sucks.
Syracuse University's D'Aniello Institute for Veterans and Military Families (IVMF) tracked post-9/11 veterans in a longitudinal study and found that 61% reported being underemployed within three years after leaving the military. After just over six years, 59% still reported underemployment. You can kind of understand taking a low-wage, low-effort job just to have money coming in after separating: That’s a short-term adjustment while finding some footing. When it happens for years and years to a lot of veterans, it's a structural problem.
Moreover, one in 10 vets report both underemployment and dissatisfaction with their pay—a burden directly linked to turnover, financial strain, and measurably worse wellbeing outcomes. A lot of us have felt this at one time or another; we just may not have known there’s a word for it.
The Tip of the Iceberg
The Bureau of Labor Statistics measures unemployment with a simple question: do you have a job? If the answer is yes, congratulations: you're employed (insofar as the government is concerned), regardless of whether that job pays a living wage, uses your skills, or has anything to do with your work experience.
That question and all the words after “job” and “job that makes you feel fulfilled and useful as a human with purpose” are why the veteran unemployment rate, while technically accurate, tells almost nothing about how veterans actually fare in the real world. A 2019 Pew Research Center survey found that 42% of post-9/11 veterans felt overqualified for their first civilian job based on their skills, experience, and training. Only 46% said their qualifications were "about right." Nearly half the veterans who found work after service found work that didn't fit, but the headlines about veteran employment emphasize the unemployment rate, which looks fine. On the surface.
Fast-forward to June 2024 when AEI reported the unemployment rate for veterans aged 18–24 was 12.3%, higher than their non-veteran peers at 9.3%. Young veterans, fresh out of the service, are struggling even on the metrics that are supposedly great.
Reasons for Veteran Underemployment
The driver of veteran underemployment isn't a lack of skill; it's in the translation, specifically the resume translation. Military experience is difficult to communicate in civilian terms, and most veterans need to learn how to make that translation, preferably before they separate.
The federal government invests upwards of $13 billion annually in military-to-civilian transition programs, but real employment outcomes are inconsistent, and underemployment still very much a problem. So it’s not the money or the effort on the government’s end; it’s that the civilian hiring force just doesn't know how to read military experience, and there are veterans who don't know how to present it.
Consider the standard military resume bullet, "Managed 15-person team conducting SIGINT collection in austere forward-deployed environments." This means very little to a civilian hiring manager. The skills are real and valuable, but the language buries the lede. Veterans are trained to communicate in the structured shorthand of military operations. Civilian hiring happens in a totally different dialect. This is the chasm between two worlds, and it’s one with real financial consequences.
Then there's the unbearable weight of losing the security blanket of a regular paycheck. When separation day arrives, there's no money coming in unless you find a source of cash on your own. “Premature acceptance of suboptimal jobs to replace income" is a primary driver of underemployment,” the IVMF report says, and this compromise early in a young veteran’s career sets a lower trajectory that can follow them for years. "Many employers struggle to understand how military skills, particularly leadership, translate to civilian jobs,” Katie Davenport, assistant research professor at Penn State's Clearinghouse and lead author on the IVMF study, wrote. “Also, veterans can feel pressure to accept jobs quickly after they leave military service and may not be as selective as they should be."
As I said earlier in this article, it’s understandable that a veteran would think this way (I also enjoy eating food and having a place to live. Money is really useful for that stuff). But it should be the last resort—not part of a separation plan.
The Financial Consequences
Underemployment isn't just frustration at career trajectory. A veteran who accepts an entry-level job when their experience qualifies them for mid-level management isn't just earning less today. They're setting a lower baseline for every future salary negotiation, saving for retirement at a slower rate, and potentially forfeiting benefits that would otherwise offset the true cost of leaving military service. Worse still, the consequences can be life or death.
Underemployment brings with it depression, anxiety, anger, low job commitment, and poorer health outcomes in transitioning veterans. A 2024 study found unemployed veterans were twice as likely to experience depression as employed veterans. And finances are a massive threat to separated veterans (and many active duty troops. Financial issues contributed to 16% of suicide deaths among veterans, and 23% among those still serving. It doesn’t exist in a vacuum, either; financial problems “interact with PTSD, depression, and social isolation to create a lethal environment,” according to the Veterans Justice Project.
Beating Veteran Underemployment
Veterans in jobs below their capacity are more likely to leave quickly, and while job-hopping ultimately improves salary and satisfaction, it also adds turbulence to an already difficult transition. The best outcome, the research consistently finds, is matching the right job at the start. Focusing on improving two targets early in the transition process leads to better outcomes. These are finding full-time employment faster and finding a larger starting salary. Veterans can improve their chances in these areas by interview coaching with a mentor, resume writing assistance that translates military skills into civilian language, and/or career planning that aligns realistic expectations with the demands of the labor market.
The Department of Labor’s Veterans' Employment and Training Service (VETS) offers free resume translation assistance. Hiring Our Heroes, a program of the U.S. Chamber of Commerce Foundation, provides career services including resume coaching and employer connections at no cost to veterans. Military OneSource has career resources available to veterans for up to 180 days after separation. There are others; these are just places to start.
Taking the first job that comes along is a mistake (unless it’s the kind of fulfilling work we’re talking about). Veterans who held out for positions that matched their qualifications (even if it meant a longer job search) ended up with higher salaries and greater job satisfaction. The financial pressure to accept any job immediately is real, which is why veterans need emergency savings adequate to fund a deliberate search rather than a desperate one.
