2012-07-01 "Military pay more superior to civilian than ever" by Tom Philpott
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As private sector salaries flattened during the last decade, military pay climbed steadily, enough so that by 2009 pay and allowances for enlisted members exceeded the pay of 90 percent of private sector workers of similar age and education level.
That’s one of the more significant findings of the 11th Quadrennial Review of Military Compensation report released last week, given its potential to impact compensation decisions by the Department of Defense and Congress as they struggle to control military personnel costs.
The military pay advantage, which had been a worrisome gap in 1999, is larger now than it has ever been, said QRMC director Thomas Bush.
“I believe it is and there is a chart in our report that illustrates that. (It) shows where we are, which is probably the highest point that we have been” compared with civilian pay, Bush said.
The military gained its lead with annual raises from 2000 to 2010 that exceeded private sector wage growth and some extra increases in housing allowances to eliminate average out-of-pocket rental costs. Meanwhile, civilian pay growth stalled as markets collapsed and jobs disappeared.
Officer pay by 2009 exceeded salaries of 83 percent of civilian peers of similar age with bachelor’s and master’s degrees. Enlisted are compared to workers with high school diplomas, some college or associate’s degrees.
To make its pay comparisons, the QRMC used Regular Military Compensation, which combines basic pay with Basic Allowance for Housing and Basic Allowance for Subsistence plus the federal tax advantage on the tax-free allowances.
By 2009, the report says, average RMC for enlisted exceeded the median wage for civilians in each comparison group — high school diploma, some college and two-year degrees. Average RMC was $50,747 or “about $21,800 more than the median earnings for civilians from the combined comparison groups.”
For officers, average RMC was $94,735 in 2009. That was “88 percent higher than earnings of civilians with bachelor’s degrees, and 47 percent higher than earnings of those with graduate-level degrees,” the report says.
Neil Singer, a former senior analyst at the Congressional Budget Office who advised a recent commission on military pay issues as it studied ways to address the nation’s debt crisis, said he supports the QRMC’s call to target more money to individual skills by expanding use of special and incentive pays and also giving more recognition to members who serve in combat.
An obvious way to pay for that, Singer said, is to freeze across-the-board raises until RMC “comparability” with private sector wages is restored to levels endorsed by earlier QRMCs. The 1.7 percent across-the-board raise planned for January, for example, would cost more than $1 billion. That money should be used instead as pay incentives for Special Forces, linguists and other high-demand skills highlighted by the QRMC as well as to expand benefits for those who see combat, wounded warriors, their families and caregivers.
In 2002, the 9th QRMC concluded that keeping RMC at the 70th percentile of private sector wages would sustain a volunteer force. The 11th QRMC didn’t do the work to “revalidate” that benchmark, said director Bush, “so I am reluctant to say the 70th is the right percentile. . . . (It) would be appropriate to validate that over several QRMCs so we’ll know we’re in the right ballpark.”
The 11th QRMC also isn’t calling for a military pay freeze.
“We have given the department facts they can use to balance competing interests,” Bush explained.
Excluded from its pay comparisons with civilian workers are other elements of compensation that would make the military advantage appear wider. The military pays no FICA payroll tax on BAH and BAS, for example. Also, active-duty members receive free health care for themselves and family members if enrolled in Tricare Prime, while health insurance costs for civilian workers have increased steadily during the decade.
If health benefits were compared, says the report, the take-home pay advantage over civilians would grow by $3,000 and $7,000 per year for enlisted, depending on family size, and by $2,000 to $4,800 for officers. The officer advantage is smaller because more of their peers in the private sector have employer health coverage.
Marine Staff Sgt. Andrew Gallagher, 29, doesn’t believe pay comparisons using only age and education level, even with associate’s degree earners tossed in the mix, is fair to career enlisted.
Gallagher will pass the 12-year mark in the Corps this November. He has served three tours in Iraq, the second shortened by wounds suffered in an IED attack. His total pay, before taxes and including BAH and BAS, is about $58,000 a year at Camp Lejeune, N.C.
“I believe the amount and levels of training an individual receives over a career in the military far exceeds an associate’s degree level of training,” Gallagher said. He notes that his own career has been peppered with six-to-eight-week training periods, attending classes and receiving more training for 12-to-16 hours a day versus perhaps only four hours each day at a college.
His extra training included an Infantry Squad Leaders Course, an Infantry Unit Leaders Course, Small Arms Weapons Instructor qualification, correspondence courses in war fighting and advance war fighting, and recruiter school which he compares to management-level sales training.
Gallagher said he wouldn’t be surprised to see the pay comparisons lead to smaller raises for a while. If someone wants to claim he is overpaid, the staff sergeant concedes, well, he might be. Because even if his pay were frozen for the rest of his career, he told me, he’d still stay a Marine.
“They will have to pull me away, kicking and screaming,” said the married father of two. “The Marine Corps has allowed me to provide for my family. . . . I appreciate that. I know they’re not going to cut my pay. As long as they don’t do something crazy like that, they could pay me the same amount forever.”
And if he were still on recruiting duty, he’d tout that 90th percentile on pay — not to prospective recruits but their parents. If recruits are swayed by it, Gallagher said, the Corps probably doesn’t want them.