The long standing assumption is that military members have long been paid less than their civilian counterparts. For a long time, this was true – stories of military members receiving food stamps were common, as were military members and their families living in sub-standard housing because that was all they could afford. But the government has come a long way in recent years to bring pay and benefits up to par with civilian standards. Now, some groups are wondering if they have gone too far, leading some to question whether the government should slow the pay raise cycle, or even put a one year freeze on military pay raises.
Will the Military Reduce or Stop Pay Raises?
Of course, it is way too early to give a definitive answer now, but this is something to track. Military pay and benefits are taking up an increasingly large part of the military budget each year, and the Department of Defense is looking at all possibilities available to reduce costs across the board, and this includes things like ay and benefits, less frequent permanent changes of station, and cutting weapons systems acquisitions. The government has also recently discussed changes to the military retirement system as well as possible changes to Guard and Reserve drill pay.
How Could Military Pay Change?
This article is based upon a study from the Rand Corp, and independent think tank. They were tasked with examining the military pay system and comparing it to various factors such as civilian pay, retention numbers, force strength, future military needs, and other internal and external factors. What they discovered was that the military pay system has grown quickly over the last decade plus (basic pay is up 45 percent since 2000), and many military members are now compensated more than civilians with comparable education and experience (there will of course, always be outliers, depending on which job someone does in the military vs. the civilian world; the study is based upon a total overview of the military, not individual jobs).
Some of the options they proposed include:
- Setting the basic pay increase at half a percentage point below the ECI for one year
- Freezing basic pay for one year
- Instituting a series of below-ECI increases, such as ECI minus half a percentage point for four years.
When Would Changes Take Place?
Secretary of Defense Leon Panetta made recommendations to Congress to ”provide more limited pay raises beginning in 2015.” Keep in mind, this is only a recommendation, and no actual legislation has been introduced. The Department of Defense is in a tough spot, as they have been tasked to help reduce our nation’s deficit by cutting hundreds of billions of dollars from their budgets in the coming years. Reducing pay rate increases would only be a small part of the necessary cuts, along with possible cuts to health care, retirement benefits, National Guard and Reserve Drill Pay, and other benefits.
Will These Pay Raise Reductions Happen?
The study isn’t just running numbers and recommending cuts. They are taking other factors into account. They recognize there could be backlash from the military and civilian communities if these pay raise cuts take place, and they note there could be political aspects to consider (I know I wouldn’t want to be the Congressman who puts a proposal like this together!).
Here are some observations from the report:
Choosing among these options requires balancing two effects of any rollback in pay, whether brief or prolonged. The first is the amount of money saved. The second is the level of concern that might be voiced in Congress, in the military, and in the public at large over what may be perceived as a devaluing of military service or a failure to appreciate the sacrifices of service members during a time of war. Thus, policymakers will need to weigh the advantages and disadvantages of each option before deciding on a course of action.
Here is another link to the report.
What are your thoughts about these potential changes to military pay raises? Fair, or too much?