USA — Military Pay Competitive With Private Sector

WASHINGTON — Mil­i­tary com­pen­sa­tion is com­pet­ing well against the pri­vate sec­tor, as evi­denced by the high rate of recruit­ment and reten­tion, a Defense Depart­ment offi­cial told a Sen­ate sub­com­mit­tee today.

There­fore, the depart­ment is focus­ing on tar­get­ed spe­cial pays and bonus­es as an effi­cient means to give incen­tives for peo­ple to sign up for hard-to-fill and hard-to-retain spe­cial­ties, William J. Carr, deputy under­sec­re­tary of defense for per­son­nel pol­i­cy, told the Sen­ate Armed Ser­vices Committee’s per­son­nel sub­com­mit­tee.

Using reg­u­lar mil­i­tary com­pen­sa­tion – basic pay com­bined with hous­ing and food allowances and fed­er­al tax advan­tages — as a com­par­i­son, mil­i­tary mem­bers are paid high­er than 70 per­cent of their pri­vate-sec­tor peers of sim­i­lar edu­ca­tion and expe­ri­ence, Carr said.

A $340 mil­lion invest­ment in such pays could pro­vide $30,000 bonus­es to more than 11,000 ser­vice­mem­bers the mil­i­tary espe­cial­ly needs, Carr said, while the same amount would buy only a 0.5 per­cent across-the-board basic pay raise for all ser­vice­mem­bers. At the same time, how­ev­er, it is impor­tant to ensure reg­u­lar com­pen­sa­tion remains com­pet­i­tive, he said, not­ing the department’s request for a 1.4 per­cent across-the-board pay increase for next year.

Carr called spe­cial­ty and incen­tive pays “essen­tial,” espe­cial­ly for spe­cial oper­a­tions forces and peo­ple with med­ical, den­tistry, men­tal health, avi­a­tion and nuclear skills. The ser­vices paid out $6.4 bil­lion in spe­cial­ty pays last year, com­pris­ing 4.4 per­cent of the per­son­nel bud­get. The depart­ment is request­ing $5.6 bil­lion for 2011.

The decrease does not mean such tar­get­ed incen­tives are less impor­tant, Carr said. Rather, he explained, it reflects less need to use them dur­ing the slow eco­nom­ic recov­ery.

When recruit­ing and reten­tion dropped in the strong job mar­ket of the late 1990s, Con­gress and Defense Depart­ment offi­cials react­ed quick­ly, Carr said. Since 2002, pay has risen 42 per­cent, hous­ing allowance has gone up by 83 per­cent, and the sub­sis­tence allowance has grown by 40 per­cent, he said, com­pared to a 32 per­cent rise in pri­vate-sec­tor salaries.

Three out­side mil­i­tary experts — Bren­da Far­rell of the Gov­ern­ment Account­abil­i­ty Office, Car­la Tighe Mur­ray of the Con­gres­sion­al Bud­get Office and James Hosek of the RAND Cor­po­ra­tion think tank’s nation­al secu­ri­ty divi­sion — tes­ti­fied with Carr and agreed that the over­all mil­i­tary com­pen­sa­tion pack­age com­pares well against the pri­vate sec­tor, with some stud­ies plac­ing mil­i­tary com­pen­sa­tion equal to or greater than 80 per­cent of their civil­ian coun­ter­parts.

Vir­ginia Sen. Jim Webb, a for­mer Navy sec­re­tary who chairs the sub­com­mit­tee, said mil­i­tary pay has risen dra­mat­i­cal­ly in the three decades of the all-vol­un­teer force.

U.S. Depart­ment of Defense
Office of the Assis­tant Sec­re­tary of Defense (Pub­lic Affairs)