It will positively impact the lives of some vets -- just don't expect it to reduce the national unemployment rate
Unemployment is a problem for recent veterans. On Friday, I noted that the unemployment rate for Veterans of the post-9/11 Gulf War was a staggering 12.1% -- nearly 50%* higher than the rest of the population. Anyone concerned about this problem should be pleased to see that President Obama's proposal to provide firms a tax credit for hiring Veterans is gaining traction in Congress. But we shouldn't confuse the measure with a way to create jobs and boost the economy more generally.
Just to Be Clear: This Is a Good Idea
In what follows, I don't wish to discourage anyone from thinking that this tax credit would be a good idea. It helps to correct what I consider a grave injustice. If these brave men and women chose not to fight for their country but merely remained civilians instead years ago, then many would more likely be employed today. But instead a large number happen to be hitting the job market at a historically bad time, so many are having trouble finding work. Providing employers a small incentive to hire veterans will help to solve this problem.
President Obama proposed this as a part of his jobs plan unveiled in September. It has mostly fizzled in Congress, but the GOP will likely support this measure. After all, helping veterans is something Republicans and Democrats can both agree on. It would provide a tax credit under the following conditions:
- Up to $2,400 to hire any veteran who has been unemployed for at least four weeks
- Up to $5,600 to hire any veteran who has been unemployed for longer than six months
- Up to $9,600 to hire a veteran with service-connected disabilities who has been unemployed for longer than 6 months.