In this episode of MoneyTalk with MFLN Personal Finance, Dr. Barbara O’Neill discusses the third webinar in the Permanent Change of Station series, which was held on April 2, 2019 and hosted by Zona Lewis of Military and Family Community Policy and Vicki LaFollete, Department of Defense Project Lead for the Military Families Learning Network. Watch the recording of this webinar and find additional resources from the event here: PCS: Research and Tools for Supporting Military Transitions webinar recording.
This webinar relied heavily on research from the 2018 RAND Report called Enhancing Family Stability During a Permanent Change of Station. Can you briefly touch on the findings of this report?
The RAND Report was written as a result of the 2017 Defense Authorization Act that required the Secretary of Defense to submit a report to Congress discussing actions taken to enhance the stability of military families undergoing a Permanent Change of Station (PCS). The Department of Defense requested assistance from RAND to conduct a review of the impact of PCS moves on military family stability. The research team used longitudinal data that tracked the careers and incomes of more than 900,000 military spouses from 2001 to 2012. The research included existing literature, published survey data, and feedback from interviews of DoD personnel. The overall take-away: PCS moves cause a decline in spousal earnings and labor force participation.
Another key finding is that there are both First Order Disruptions (e.g., employment, changing schools, child care) that are experienced directly as a result of a PCS and Second Order Disruptions (e.g., school performance, psychosocial outcomes, and family functioning) that are experienced indirectly as a result of a PCS.
Another bit of research covered by this webinar was the 2016 RAND Report on the Effects of Military Change of Station Moves on Spousal Earnings. What financial impact do military spouses experience?
Specifically, PCS moves reduce working spouses’ earnings by approximately $3,100. Husbands experienced larger dollar losses in earnings than wives, but most military spouses are females. Spouses with young children under age 6 are particularly impacted by PCS moves. One reason is that these spouses may require more time out of the labor force to help their children adapt to a move.
Besides financial disruptions, what are some of the psychosocial disruptions military families experience as a result of a move?
The high unemployment rate among military spouses really stood out to me. Their unemployment rate is 24% and this rate has held steady since 2012. Unemployed spouses had been looking for work for an average of 17 weeks (about 4 months). In addition, only 60% of military spouses were satisfied with the military way of life. This turns the tables on the oft-quoted statement “happy wife, happy life.” Another fact that stood out is that the average time between PCS moves in 23.8 months. That’s a move every two years!
The military covers the cost of moving, so why are military families losing money as a result of a move? What other financial obligations are a result of a move?
Just like civilians who move, there are many tangible and intangible expenses. One is the loss of social support networks that must constantly be rebuilt. Another is continually recurring security deposits for rent and utilities (unless you can successfully get a former service provider to vouch for you). Another is lost earnings and forgone retirement savings opportunities and lower future Social Security benefits based on career earnings.
Where can financial educators and practitioners go to get referrals and resources to support military families during moves?
Free resources are available through Military OneSource including its “Installations” and “Plan My Move” web pages that can help military families with personalized moving plans and affordable housing and relocation. The Department of Defense also has information about travel allowances. I encourage financial practitioners to view the webinar and look at all of the screen shots of online resources that are available to assist military families.