While civilian salary increases have slowed to a crawl in the last five years, a new Pentagon report shows rapidly-growing military payrolls have proved immune to the economic pain felt in the private sector.
The Defense Department’s latest Quadrennial Review of Military Compensation confirms that after years of special benefits provided by Congress, it's now much more lucrative to be a soldier than a civilian. While average pay for civilians with a two-year college degree rises $3,000 between their tenth and twentieth year in the workforce (to reach $45,000), comparable enlisted Defense personnel see their salaries increase $15,000 in that time (to reach $73,000).
In fact, at every point in someone’s career, pay in the armed services tops that of civilians. In their first year, military officers make $20,000 more than private sector workers with a bachelor's degree, according to the review by representatives from the Army, Navy, Air Force, Marine Corps, National Guard and various Defense bureaus. By their twentieth year, that difference has grown to $60,000. And the shortfall is larger for civilians with some college experience or a high school diploma.
A separate report last month by the Center for American Progress, a non-partisan educational institution, concluded that the military's salaries overall have risen 28 percent since 2000, with the average cost per soldier growing from $64,606 to $80,292 in 2012. Defense personnel experts attribute this to Congress’ desire to reward troops for their service in recent wars — including a pay bonus begun in 2004 — and a swelling of the armed forces’ top ranks.
Former Secretary of Defense Robert Gates pushed, to no avail, for major changes to Pentagon compensation and warned of its rising costs before leaving the position last July. In a speech at The American Enterprise Institute, he called the military pay system a “rigid, one-size-fits-all approach … left over from the last century.”
“A more tiered and targeted system — one that weights compensation towards the most high demand and dangerous specialties — could bring down costs while attracting and retaining the high quality personnel we need,” Gates said.
For many years, Defense pay was pegged to civilian pay, and meant to rise at the same rate. But Congress changed the rules in 2004 by mandating that soldiers’ pay increase at the rate of the Employment Cost Index plus 0.5 percent. It was meant to bolster military recruitment efforts for the conflicts in Iraq and Afghanistan.
Gordon Adams, a former Office of Management and Budget associate director for national security and international affairs under President Bill Clinton, said the Hill’s push came at a time when the Pentagon’s pay was often worse than the private sector’s. But Congress’ rationale has been weak for some time, according to critics. Since 2006, the Pentagon has been able to meet its recruitment goals every year, according to the center’s report. Adams said a slowing private sector economy, not the special pay, is responsible for the military’s recruiting success.
The Pentagon has proposed leveling off pay increases starting in fiscal year 2015 and has estimated that plan would save $16.5 billion by 2020. But it has encountered resistance from Congress, which has continually shown support for pay raises at all levels of the armed forces. Lawmakers have also blocked targeted increases for positions where recruiting has lagged, such as drone operators and information technology specialists.
“The best ideas for reigning in costs are all known — this has been researched to death. It’s the politics that kills you,” Adams said. “Congress and [military] retirees want everyone to get their raises across the board — rather than in specific areas where pay lags — and it’s good politics, but it’s not good force management.”
Ben Freeman, who specializes in Defense personnel issues at the Project on Government Oversight, notes that there are also more highly-paid officers on the rolls now. Historically, wars have swelled the military’s lower ranks, but it now has less than five enlisted personnel for every officer for the first time in 200 years, he said.
And soldiers — especially those who have served 10 or 15 years — have huge financial incentive to stay on the rolls longer and rise through the ranks. Under a policy put in place in 1948, they have to stay in the military for 20 years to access their retirement benefits and pension — a retirements “cliff” that complicates managing personnel costs.