Journal of the Vietnam Veterans Institute 3(1):  22-36, 1994

 

[RWT1] Discrimination Against Veterans by the Federal Agency Charged with Protecting Veterans' Rights

 

 

 

R.W. Trewyn

 

 

Defining the Problem

 

One of the best kept secrets on the college campus, and elsewhere, over the past twenty years is that veterans - Vietnam-era veterans and disabled veterans - are to be granted affirmative action employment rights comparable to women and minorities.  At least, that’s the stipulation under the law if the college, or any other employer, has federal contracts in excess of $10,000.  However, as anyone familiar with the situation can attest, veterans have been afforded considerably less than parity with women and minorities in that regard.  So, what happened?  What went wrong?

 

The Vietnam Era Veterans Readjustment Assistance Act was originally enacted in 1972, but congressional concerns over the high rate of unemployment among young Vietnam veterans led to a General Accounting Office (GAO) review of the problem[1] and a rewrite of the law in 1974.  Affirmative action was added to the readjustment assistance package as a means for overcoming the employment difficulties facing these veterans.  The federal statute, 38 USC 4212, specifies that “the party contracting with the United States shall take affirmative action to employ and advance in employment qualified special disabled veterans and veterans of the Vietnam era” ... shall (i.e., must) take affirmative action to employ and advance in employment.  Clearly, the employment privileges - the legally mandated civil rights - are to apply to the initial hiring process as well as subsequent promotional opportunities.

 

Furthermore, the enabling regulations promulgated by the U.S. Department of Labor state that the affirmative action shall apply “at all levels of employment including the executive level,” and that it shall include, but not be limited to:  “hiring, upgrading, demotion or transfer, recruitment or recruitment advertising, layoff or termination, rates of pay or other forms of compensation, and selection for training.”[2]  The parameters outlined are essentially identical to those specified for women and minorities by amended Executive Order 11246 (enacted in 1965 for minorities and amended in 1972 to include women); another affirmative action mandate specifically covering federal contractors. 

 

A preliminary examination of compliance with Executive Order 11246 versus 38 USC 4212 on college campuses in Ohio led the Center for the Study of Veterans in Society (CSVS), a nonprofit research institute, to conduct a more thorough investigation into the significance of the problem for veterans.  The results of that investigation noted shortcomings with the federal statute, but the primary cause for noncompliance with the 1974 veterans’ law appeared to be lack of enforcement by the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP).[3]  Supporting evidence for this view was provided by a subsequent GAO report,[4] although the GAO was rather more critical of the legislation itself. 

 

OFCCP is charged with monitoring federal contractors for compliance with the provisions of Executive Order 11246 and 38 USC 4212, as well as provisions of the Vocational Rehabilitation Act of 1973 covering individuals with handicaps and/or disabilities.  OFCCP is also granted a variety of enforcement mechanisms, including the ability to suspend contracts.  By these means, OFCCP is to ensure that federal contractors provide affirmative action employment rights to women, minorities, veterans, and the disabled.  However, the CSVS and GAO studies confirmed that veterans have been denied their affirmative action rights under the law. 

 

Additional evidence has now been obtained which suggests that the denial of veterans’ civil rights has had more far-reaching and ominous consequences than could have been imagined from the earlier analyses.  The additional evidence and consequences thereof are the topics of this report.

 

Noncompliance with the Law

 

In 1992, there were 7.4 million Vietnam-era veterans in a civilian labor force composed of 122.9 million men and women eighteen years of age and older,[5] i.e., Vietnam-era veterans constituted 6.0% of the total as shown in Figure 1.  That percentage has remained relatively stable over the past few years, with a gradual downward trend.  For example, the value was 6.4% in 1988, with 7.5 million veterans of the Vietnam era in a labor force of 117.5 million.[6]

 

In a dynamic employment arena such as that in the United States, one might expect the annual hires of Vietnam-era veterans by federal contractors to be roughly proportional to their representation in the civilian labor force.  By definition, affirmative action should yield a level of employment even higher.  The report provided by CSVS to the House Committee on Veterans Affairs demonstrated this not to be the case in 1991,3 and similar results have now been obtained for 1992.  Federal contractor employment of Vietnam-era veterans nationally was well below the 6.0% level, averaging a mere 2.8% in 1992;[7] down from 2.9% in 1991.  And as shown in Figure 2, only two states, Nevada and Alaska, exceeded a new employment level of five percent, while New York, New Jersey, Hawaii, and Massachusetts failed to reach the two percent level.

 

The fact that federal contractors in some states managed to hire Vietnam-era veterans at near the level expected by chance, would indicate that the 6.0% level is not an unreasonable goal.  In fact, the federal contractors in Guam surpassed these expectations by hiring 8.2% Vietnam-era veterans in 1992; data suggestive of affirmative action as required by law.  To make that judgment unequivocally, however, one would need to know the actual composition of the labor pool for each state and territory; information not provided in the Department of Labor report.  Likewise, one would need to know the composition of each federal contractor’s workforce to determine with certainty whether veterans have been provided or denied their affirmative action rights.  Unfortunately, the Department of Labor does not collect this data as part of the VETS-100 report each contractor is required to file on an annual basis, i.e., the data collection is flawed.  This is curious considering the Department of Labor was cited by the GAO in 1974 for problems with data collection.1   

 

Some useful information can be gleaned from the VETS-100 report, however.  Contractors are required to provide data regarding the total number of new hires each year as well as the number of Vietnam-era veterans hired, thereby allowing the state by state performance evaluation partially depicted in Figure 2.  Individual federal contractors can be examined by this means as well.

 

Two universities were reviewed with regard to their hiring practices as part of the previous CSVS study,3 and because the results illustrate so demonstrably the nature of the employment problem facing veterans, the data will be presented here as well.  As shown in Figure 3, the University of Cincinnati (UC) and the Ohio State University (OSU) have performed in less than stellar fashion in recent years when it comes to the hiring of Vietnam-era veterans; at least, the data provided by each university would suggest this to be the case.  Federal contractors have been required to file the VETS-100 report annually since 1988, but UC apparently failed to do so the first three years.  OSU, on the other hand, managed to submit the reports each year, but the percent of Vietnam-era veterans hired dropped precipitously, reaching a low of 0.1% in 1990 (1 veteran out of 889 new hires).  Veterans at OSU argued that the aggregate data were indicative of discrimination, but officials with the university testified before the Ohio State Senate in 1991 that they were, in fact,  providing affirmative action to veterans as required by law.[8]

 

A formal complaint had already been filed with OFCCP in 1988 alleging discrimination against Vietnam-era veterans at OSU based on the failure to provide affirmative action,[9] but it was not until congressional pressure was brought to bear in 1991 that a compliance review was conducted.  The Department of Labor justified the delay in investigating because the complaint was general in nature rather than specific.[10]  The rationale put forth was that OFCCP is equipped to investigate and resolve complaints of discrimination against individuals, but the allegations against OSU involved discrimination against all veterans.  Therefore, they hadn’t bothered to investigate.  Congressional inquiries changed that.

 

Following the compliance review, a conciliation agreement was signed between OFCCP and OSU in 1992 in which the university was cited for seven major violations:  (1) no affirmative action programs for veterans or the disabled; (2) no one in charge of implementing affirmative action for veterans or the disabled; (3) jobs not listed with the Ohio Bureau of Employment Services; (4) data not adequately collected or used; (5) information about affirmative action benefits not disseminated internally or externally; (6) no review of employment practices to insure affirmative action; and (7) a climate of harassment, intimidation, and coercion for veterans.  Not a trivial list by any means.  However, except for the moderate increase in percent of new hires in 1992, back up to 2.5% (Figure 3), and the establishment of an Office of Veterans Affairs, little improvement has been noted by veterans at OSU.  Actually, the harassment, intimidation, and coercion for veterans may have gotten worse.  Furthermore, no explanation has been forthcoming from OFCCP as to why it should have taken almost two decades for them to discover that a major federal contractor like OSU had no affirmative action programs for veterans or the disabled. 

 

Further Evidence Indicting OFCCP

 

Evidence continues to mount that the blame for lack of affirmative action for Vietnam-era veterans and disabled veterans can be placed directly at the feet of officials within OFCCP; an agency whose internal culture appears hostile towards veterans and the disabled.  An evaluation of the financial agreements mediated by OFCCP on behalf of the various protected groups supports this disturbing conclusion.[11]  One can begin by looking at the number of complaints filed by members of the various protected groups for the years 1990 through 1992 (Figure 4).  In each instance, there were hundreds of complaints filed annually, with the totals for individuals with disabilities topping one thousand.  Women and minorities are depicted together because the data obtained from OFCCP was categorized according to the legal basis for the complaint, in this case, Executive Order 11246. 

 

While the number of complaints filed by veterans was low compared to the other protected classes, there may be good reasons why veterans fail to file.  As can be seen in Figure 5, few cases filed by veterans resulted in financial agreements being mediated on their behalf; the average being about 5% per year.  And similarly, individuals with disabilities were not well served by OFCCP, with only 20-30% of the cases resolved in their favor. Women and minorities, on the other hand, won their cases greater than 50% of the time all three years; a favorable settlement level each group might reasonably expect. 

 

However, if the results look appalling when the number of cases are examined, the situation gets even worse when monetary awards are reviewed.  As shown in Figure 6, veterans and the disabled fared exceedingly poorly, especially veterans.  Twenty to twenty-five million dollars in cash benefits were awarded annually to women and minorities, whereas veterans received $104,077, $447,530, and $260,592 for the years 1990 to 1992.  At least the disabled reached the seven figure plateau, with benefits ranging from $6.6 to $7.8 million.

 

Because the representation in Figure 5 as to the number of cases resolved favorably on behalf of protected group members was so illustrative, a similar depiction was generated for cash awards - the bottom line.  Again, as can be seen in Figure 7, veterans and the disabled were relegated to second class status by OFCCP; an unambiguous conclusion whether one examines the average cash benefit per award granted or per case filed. 

 

And finally with respect to the financial agreements mediated by OFCCP, the relative distribution of cash benefits was derived for 1992, the most recent year for which data is available.  As shown in Figure 8, veterans received less than 1% - one percent - of the cash benefits for the year.  Women and minority members who filed less than one-third of the complaints in 1992 received greater than three-fourths of the monetary rewards.  Equity?  Parity?  Not by any criteria most people would recognize. 

 

Perpetrating a Crime Against Veterans

 

Unfortunately, the crime perpetrated against veterans by OFCCP may not be limited to those veterans who filed complaints fruitlessly.  That may represent but a trivial monetary loss by Vietnam-era veterans and disabled veterans even if parity in cash awards should have been realized.  In fact, OFCCP’s failure to enforce affirmative action as mandated by 38 USC 4212  (“... to employ and advance in employment ...”) may ultimately cost hundreds of thousands of veterans hundreds of thousands of dollars in lifetime earnings.  How’s that for a legacy of service to America?

 

A 1987 article by Crane and Wise[12] establishes the broad framework for this assertion.  These economic researchers made use of the National Longitudinal Study of the High School Class of 1972, along with ensuing surveys up to 1979, to determine the effect of military service on civilian earnings.  Although the sample size in the national study on which the article was based is not overwhelming large (roughly 23,000 high school seniors from 1,300 schools), the conclusions are profound.  As stated by Crane and Wise:  “After controlling for other attributes of high school graduates, the weekly earnings on civilian jobs of those who served in the military were in 1979 approximately 12 percent less than the earnings of those who worked in the civilian sector.”  Twelve percent less, seven years after graduating from high school.

 

One needs only to construct a simple, hypothetical case study to understand how this might occur; it’s obvious.  Consider two high school graduates in 1972, one goes in the military, the other goes to work for a large manufacturing corporation.  Then, after completing military service, the veteran goes to work for the same corporation.  The postulated implications are illustrated in Table 1.

 

 

 

Table 1.  Effect of Military Service on Civilian Earnings:  A Hypothetical Case Study.(1)

 

Age

 

 

Nonveteran

 

Veteran

 

Difference

 

Total

18

$12,000

 

 

 

19

12,480

 

 

 

20

12,979

 

 

 

21

13,498

$12,000

$1,498

$1,498

25

15,791

14,038

1,753

8,116

30

19,212

17,080

2,132

17,989

40

28,439

25,282

3,157

44,618

50

42,097

37,424

4,673

84,037

60

62,313

55,396

6,917

142,383

65

$75,814

$67,398

$8,416

$181,347

 

(1) Assuming a three-year tour of duty and an annual increase in wages of 4% each year.

 

Using the simple assumptions for this theoretical case study (three years on active duty and wage increases of 4% annually), what are the differences in annual earnings seven years after graduation, at age 25?  Approximately 12 percent; just what was found by Crane and Wise.[13]  What are the differences in annual earnings at age 50?  Approximately 12 percent.  And what are the differences in annual earnings at retirement, at age 65?  Approximately 12 percent.  It’s not a difficult scenario to follow, but the long-term cost of military service can become staggering, over $180,000 in this example.  And if one uses $20,000 as the initial wage, the total difference in lifetime earnings jumps to over $300,000.

 

Furthermore, one need not rely on the Crane and Wise study to support the simplified civilian earnings model in Table 1.  In one of the most methodologically sound analyses to date, J.D. Angrist reported a similar - even greater - effect of military service on civilian earnings.[14]  In his 1990 paper, Angrist set out “to measure the long-term labor market consequences of military service during the Vietnam era.”  He used the draft lotteries of 1970, 1971, and 1972 to assign risk of induction parameters to individuals born between 1950 and 1953, restricting his investigation “to men who turned 19 in the year they were at risk of induction.”  By this means, he was able to identify “draft eligible” and “draft ineligible” subjects.  Angrist then used Social Security records to monitor the earnings of these individuals from 1964 to 1984, with the longest period for assessing the effect of military service on earnings being fourteen years, from 1970 to 1984. 

 

Angrist’s investigation established that prior to the draft lottery, there were no significant differences in the earnings of the two groups, a valuable control for his study.  However, the situation changed dramatically for those who became eligible for the draft; their annual earnings dropping appreciably compared to the draft ineligible group.  And by analyzing the Social Security records to 1984, Angrist was able to conclude that “long after their service in Vietnam was ended, the earnings of white veterans were approximately 15 percent less than the earnings of comparable nonveterans.”  Fifteen percent in this case.[15]  Taken in conjunction with the Crane and Wise study, it would appear that the rationale behind Table 1 is sound, only the magnitude of the career losses would be in doubt.

One could argue, of course, that seven years (the time frame for the Crane and Wise study) or even fourteen years (the maximum time frame in the Angrist study) is not sufficient to draw such sweeping conclusions; perhaps the individual veteran just hasn’t had enough time to catch up.  But, how would the veteran go about catching up?  By going to college on the GI Bill, back when it was still available?  Possibly, but the college campus was not a friendly place for veterans during the Vietnam era.  It still isn’t.[16]  And as might be expected in that hostile environment, fewer Vietnam-era veterans completed their undergraduate studies than nonveterans,[17] and those who did would still be behind their nonveteran peers ... other college graduates.[18]

 

How else might veterans catch up?  What employment principle could possibly overcome the loss in seniority caused by service to the nation?  Probably only one ... affirmative action!  That would be especially true if employers were required to take “affirmative action to employ and advance in employment qualified special disabled veterans and veterans of the Vietnam era.”

 

Consider, once again, the Department of Labor’s regulations regarding affirmative action for covered veterans.2   It shall apply “at all levels of employment including the executive level,” and it shall include, but not be limited to:  hiring, upgrading, demotion or transfer, recruitment or recruitment advertising, layoff or termination, rates of pay or other forms of compensation, and selection for training.”  Would affirmative action in all these areas allow the veteran to catch up?  Perhaps.[19]  At least, the veteran would be given a fighting chance.  Regrettably, by not enforcing their own regulations, officials within OFCCP have stolen that chance from veterans.

 



Notes

 

[1] The findings are summarized in a report entitled:  Employment Services for Vietnam-Era Veterans Could be Improved (B-178741), General Accounting Office, 29 November 1974.

[2] Information contained in:  Title 41, Code of Federal Regulations, Chapter 60, Section 250; specifically, 41 CFR 60-250.6(a).

[3] Written testimony from the Center for the Study of Veterans in Society entitled:  Title 38, United States Code, Section 4212:  Implementation and Enforcement by the U.S. Department of Labor, by A.H. Miller, J.A. Stever, and R.W. Trewyn.  Submitted to the Veterans Affairs Committee of the U.S. House of Representatives at the request of Chairman G.V. (Sonny) Montgomery, 15 October 1993.

[4] A report entitled:  Federal Contractor Hiring: Effect of Veteran Hiring Legislation is Unknown (GAO/GGD-94-6), General Accounting Office, 18 October 1993.

[5] Data compiled from Tables 1 and 8 in a report entitled:  BLS Reports on Labor Market Situation of Vietnam-era Veterans.  Published in:  Bureau of Labor Statistics News (USDL 92-255), U.S. Department of Labor, 14 May 1992.

[6] Data compiled from Tables 1 and 8 in a report entitled:  BLS Reports on Labor Market Situation among Disabled Veterans of the Vietnam Era.  Published in:  Bureau of Labor Statistics News (USDL 88-489), U.S. Department of Labor, 30 September 1988.

[7] Calculations are based on data contained in a summary report entitled:  Veteran Employment Totals by State:  09/24/93.  The report was provided by Richard E. Larson, Freedom of Information Act Disclosure Office, Veterans Employment and Training, U.S. Department of Labor, in response to a Freedom of Information Act request forwarded to the Secretary of Labor, Robert Reich, on 6 November 1993.  

[8] Reported in an article entitled:  OSU says it’s doing its best to help vets; they disagree, by T. Doulin and R. Snell.  Published in:  The Columbus Dispatch, 20 February 1991.

[9] Trewyn versus Ohio State University (Complaint No. E880445).  Concerns over the lack of affirmative action for veterans and the disabled at OSU led to months of unproductive correspondence with university officials.  When it became clear that the university had no affirmative action programs for these groups and that university officials had little interest in implementing such programs, a complaint was forwarded to the Chicago regional office of OFCCP on 27 December 1988; supplemental information supporting the allegations was obtained and forwarded on 30 December 1988.  OFCCP responded, assigning the complaint number, on 8 February 1989.

[10] Reported in an article entitled:  Veterans advocate wonders why OSU audit was delayed so long, by T. Doulin.  Published in:  The Columbus Dispatch, 22 September 1991.

[11] Data provided by Robert B. Greaux, Director of Program Operations, OFCCP, U.S. Department of Labor, in response to a Freedom of Information Act request forwarded to the Secretary of Labor, Robert Reich, on 4 November 1993.

[12] A National Bureau of Economic Research Project Report from the John F. Kennedy School of Government, Harvard University, entitled:  Military service and civilian earnings of youths, by J.R. Crane and D.A. Wise.  Published in:  Public Sector Payrolls (David A. Wise, Editor), University of Chicago Press, Chicago, pp. 119-145, 1987.

[13] In fact, Crane and Wise reported that veterans earned approximately 12% less; the inverse calculation was used here, i.e., that nonveterans would earn approximately 12% more.

[14] A report from the Department of Economics, Harvard University, entitled:  Lifetime earnings and the Vietnam era draft lottery: Evidence from Social Security Administration records, by J.D. Angrist.  Published in:  The American Economic Review, 80: 313-336, 1990.  A number of earlier studies that attempted to assess the effect of military service on civilian earnings (some showing positive effects, some negative) are cited in this report; the shortcomings of the earlier works are addressed.  Also see:  Errata, The American Economic Review, 80:  1284-1286, 1990.  A typographer’s error is reported in the earlier article whereby the titles and captions for Figures 1 and 3 were inverted.

[15] The differential in annual earnings in the early 1980s (for veterans and nonveterans in their early 30s) was reported to be approximately $3,500, well in excess of the difference projected in Table 1.

[16] Many reports on the problems veterans face on the college campus in the 1990s have originated from analyses in Ohio.  See, for example:  E. Holland’s A peacetime war, Ohio State Quest, 14(1): 5-7, 1992; A.H. Miller and J.A. Stever’s Anti-vet bias at OSU: Love beads vs. dog tags, Campus Report, 7(4): 3-8, 1992; J.A. Stever and R.W. Trewyn’s Veterans and the campus war, The Ohio AMVET, 7(1): 14-15, 1992; and A.H. Miller’s Political correctness in state universities: What state legislators need to know, The Heritage Lectures, published by the Heritage Foundation, Washington, DC, 1992.

[17] From a report entitled:  The Vietnam-era cohort:  Employment and earnings, by S.R. Cohany.  Published in:  Monthly Labor Review, 115: 3-15, 1992.

[18] While a loss in seniority similar to that depicted in Table 1 would occur when comparing veteran and nonveteran college graduates, that in no way negates the fact that higher education should increase one’s civilian earning potential.  As a result, it is possible that those veterans who were able to make use of their GI Bill benefits could exhibit more earning potential over their lifetime than nonveterans with a high school education.  The actual benefits derived by veterans were quantified in another article by J.D. Angrist entitled:  The effect of veterans benefits on education and earnings, Industrial and Labor Relations Review, 46:  637-652, 1993.  The 1987 Survey of Veterans was employed by Angrist to determine that for each year of additional education, annual earnings of veterans increased by 4.3%.  For those veterans who received the benefits, 1.4 years of additional education were accrued, on average.  However, the 6% (1.4 years times 4.3%) increase in annual earnings would not overcome the 15% loss in earnings experienced by white Vietnam-era veterans (Angrist, 1990; footnote 14).

[19] As already stated, these are the same affirmative action rights provided to women and minorities by Executive Order 11246; rights which are rigorously enforced by OFCCP.  Angrist’s 1990 studies (cited in footnote 14) found only short-term detrimental effects of military service on the earnings of nonwhite Vietnam-era veterans.  It’s possible, therefore, that affirmative action, provided under the aegis of Executive Order 11246 and the Civil Rights Act, was able to overcome the long-term negative impact for nonwhite veterans.


 [RWT1]

Note: Also, read related article by clicking here.