Reducing Barriers To Entrepreneurship Among Military Spouses

Posted on October 12th, 2022

Military spouses should be the next frontier of entrepreneurship support.

An amendment recently introduced by Sens. Amy Klobuchar (D-MN) and Thom Tillis (R-NC) to the National Defense Authorization Act (NDAA) would encourage support for military spouse entrepreneurs. Military spouses are an important potential source of new businesses—and entrepreneurship is a critically important economic option for military spouses. But to realize entrepreneurial ambitions, they need help.

Yet their labor force participation is low: about 57% compared to 76% overall. During COVID-19, about four in 10 military spouses who had been employed left the workforce. Unemployment is also consistently higher among military spouses and, when employed, they tend to earn less than other workers, in part because of a higher likelihood of underemployment.

A 2016 analysis by the Sorenson Impact Center (at the University of Utah) and Blue Star Families found that these employment and earnings gaps—and their consequences—add up to a total “social cost” of between $700 million and $1 billion per year. (Social cost includes foregone tax revenue, unemployment benefits, and public costs related to health issues.)

These labor market issues are a consequence of circumstantial challenges. Unsurprisingly, as a 2018 report from the Council of Economic Advisers found, they encounter “geographic and temporal constraints” because of relocations of their active duty spouses. This is not a tragedy—it’s part of maintaining a modern military. The tragic part is that our laws and policies at the federal and state levels don’t do much to mitigate the barriers this lifestyle places on military spouses. There are some programs in place at the Defense Department. And, in 2019, Congress passed the bipartisan Portable Certification of Spouses Act, intended to assist with overcoming barriers posed by state-level occupational licensing requirements.

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