Veterans' unemployment is rising. Blame federal layoffs.
- - - Veterans' unemployment is rising. Blame federal layoffs.
Emma OckermanJuly 12, 2025 at 8:30 AM
The unemployment rate for veterans is trending higher compared to a year ago — especially among women — as the federal government bleeds workers.
Veterans saw their unemployment rate rise to 3.7% in June from 2.8% in the same month last year, while women veterans specifically saw their unemployment rate jump to 4.4% from 3.2% a year earlier. That’s despite a labor market otherwise defined by stasis: The overall unemployment rate has remained steady in the past year, hovering between 4% and 4.2%.
Veterans have historically had a lower unemployment rate than non-veterans. But one driver has shifted significantly this year: job cuts across the federal workforce, which the Trump administration has sought in what it describes as an effort to make the government leaner and more efficient.
“The biggest factor of all is really what’s going on with the federal government hiring,” Heather Long, chief economist at the Navy Federal Credit Union, told Yahoo Finance. “The federal government has often been a top employer for veterans, which makes sense. They’re serving our country — now they want to continue to serve in a more civilian capacity.”
The federal government has lost 69,000 jobs since January, not including workers on paid leave or receiving severance pay, according to the Bureau of Labor Statistics, and is on track to lose thousands more before the end of the year. In 2024, BLS data showed 12% of all employed veterans worked for the federal government — a rate that was even higher for employed female veterans at 17.4%.
“More than 1 in 6 women veterans actually works for the federal government, which is way higher than the rates you see kind of across the population,” said Katherine Gallagher Robbins, a senior fellow at the National Partnership for Women & Families.
Women’s share of the veteran workforce hit an all-time high in 2024 at 13.8%, nearly doubling from where it was in 2000, a National Partnership for Women & Families analysis found. What’s more, younger veterans who served after 9/11 are more likely to be women when compared to their older counterparts, according to a 2024 report from RAND. They’re also more likely to identify as people of color and be raising children, with many of them being single parents.
More job cuts coming
Federal jobs can be attractive for a number of reasons: They’ve been perceived as stable in the past, and they often offer better benefits than the private sector for people who have only some college experience or a high school diploma. Many veterans even receive preference over non-veterans in federal agencies’ hiring.
But further federal job losses are on the way, which could impact veteran unemployment even more.
“It is unprecedented to see this level of pulling back on the federal workforce,” Robbins said.
The Office of Personnel Management said in a July 1 press release that “hundreds of thousands more workers will drop off the rolls in October 2025, when workers depart the federal government as part of the Deferred Resignation Program,” while “tens of thousands” more workers have received reduction-in-force or termination notices and only remained on government payrolls due to court orders, which the administration was fighting.
Last week, the US Supreme Court cleared the way for still more federal job cuts to move forward.
The Department of Veterans Affairs, meanwhile, had initially considered cutting up to 15% of its workforce this year, but announced Monday that it was already on pace to reduce staff by 30,000 people by the end of the fiscal year due to a combination of “employee reductions through the federal hiring freeze, deferred resignations, retirements and normal attrition,” making further cuts unnecessary. A quarter of the VA’s staff consists of veterans, according to the Pew Research Center.
If the Trump administration continues with its workforce reduction plans, “more veterans will be in the unemployment line,” said Steve Smith, a spokesman for the AFL-CIO, a federation of 63 national and international labor unions that represent nearly 15 million people, in an email. “This is why unions have vigorously opposed Trump’s federal workforce cuts and have filed a number of lawsuits challenging them.”
When Yahoo Finance asked about the unemployment rate faced by veterans specifically, McLaurine Pinover, spokesperson for the federal government’s Office of Personnel Management, said in a statement that the agency ”recognizes the dedication and service of all federal employees, including our veteran workforce, and remains committed to supporting them during this transition.”
“While workforce restructuring can be a difficult process, we are working to ensure affected employees have access to available resources and opportunities,” Pinover said.
Johnathan Severs, the director of client programs at Hire Heroes USA, a veteran employment nonprofit, wrote to Yahoo Finance that the number of veterans impacted by job cuts still “remains relatively low compared to those voluntarily exiting,” though Hire Heroes USA has “a nearly 50% weekly decline in client requests related to federal employment, which may reflect a broader shift in how veterans are approaching their career options.”
Federal workforce reductions may play a role in rising veteran unemployment, but “the situation is more complex than a single cause,” Severs noted.
Where do veterans go from here?
Newly unemployed veterans are encountering a challenging job market right now, facing some employers who are reluctant to make big hiring decisions and competition from recent college graduates who can’t find work.
Outside of healthcare, education, and law enforcement, “the job market is really frozen,” Long said.
But job training programs could help veterans find their way, Long said. The Navy Federal Credit Union, where 5.6% of current employees are veterans or currently serving, participates in the federal government’s SkillBridge program, for example. That program allows transitioning service members to gain civilian work experience through training or apprenticeships.
“The hope is the Trump administration will do more in that area, and they’ve talked about it,” Long said. “There was actually an executive order a couple of months ago that was around growing apprenticeships and growing skill-based training.”
Severs also recommended that veterans take a closer look at industries including defense contracting, cybersecurity, healthcare, skilled trades, and tech.
“Across all these sectors, veterans can be highly competitive when supported by targeted training, credentialing, and resources that help translate their experience into civilian terms,” Severs said.
However, employers may need to be more considerate of the fact that veterans are more likely to have a disability when compared to the general population, while many veterans are parents and have childcare needs.
Ultimately, veterans “have so much to offer, but they are, particularly when you’re looking at young people, often competing with people who are coming out with four-year degrees or master’s degrees,” Long said. “That’s where you really need a company to value the military experience properly.”
Emma Ockerman is a reporter covering the economy and labor for Yahoo Finance. You can reach her at [email protected].
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