Scaled-back pay raises called 'insidious'

2015-02-16T12:36:27-05:00

From: Marine Corps Times

Your military paycheck is getting smaller.

It's happening despite raises in military pay every year, military advocacy groups warn. And they say it will keep shrinking if Pentagon officials get their way.

Critics say the Pentagon's intensifying zeal to hold military raises under the rate of average private-sector wage growth is threatening to resurrect an old specter: a so-called "pay gap" that some say slowly drains away the purchasing power of military families.

"It's insidious, because troops are still seeing a 'raise' in their pay," said retired Air Force Col. Mike Hayden, director of government relations for the Military Officers Association of America. "But your dollars don't go as far. You don't have the same discretionary income as before."

Over the years, Pentagon officials have consistently downplayed such concerns, saying basic pay is just one aspect of a robust pay-and-benefits package that stacks up very well against the private sector when considered in total, even with the recent smaller basic pay raises.

During the rollout of the White House's 2016 defense budget request in early February, Air Force Lt. Gen. Mark Ramsay, the Defense Department's director of force structure and resources, sought to reassure troops, stating: "We are all about our people."

But, he added, "Dollars we saved in pay and compensation ... help balance out readiness and capability."

Critics say that won't matter if troops feel unappreciated and leave the ranks. The Air Force Sergeants Association says the recent pay decisions have "re-opened the wound of a pay gap" and threaten retention. The Association of the U.S. Army has labeled pay equity one of its top concerns in coming years.

Lagging behind?

The 2016 defense budget request calls for a 1.3 percent increase in basic pay, 1 percentage point below the estimate of average private-sector wage growth next year. If approved, it would be the third consecutive year troops would get raises lower than their civilian counterparts.

For 2014 and 2105, service members received a 1 percent bump in basic pay — the two smallest raises in the history of the all-volunteer force, dating back to 1973. Next year's proposed raise would be the second-smallest in that time period.

According to MOAA's calculations, the gap has vanished only once, for a single year — 1982, when a massive 14.3 percent catch-up raise for the troops was approved in an effort to compensate for the parsimony of the 1970s. But in 1983 and beyond, military raises again lagged civilian pay growth to an extent that the gap grew as high as 13.5 percent in 1998 and 1999.

Above-average raises again narrowed the gap over the first decade of this century, but it has never been smaller than 2.4 percent, from 2010 through 2013. This year, it has widened for the first time since 1999, growing to 3.2 percent.

MOAA and other critics estimate that a 1.3 percent basic pay raise next year that lags private-sector wage growth would widen the gap between military and civilian pay to around 5 percent, an annual salary difference of about $1,500 for most midlevel enlisted troops and around $3,000 for midlevel officers.

And if the Pentagon's long-term plans are approved, that gap could rise steadily over the next four years, approaching double digits, MOAA says. Hayden noted that when the gap peaked at over 13 percent in the late 1990s, it took almost a decade of compensation corrections to deflate.

"Once you start capping pay, it becomes so easy to keep doing it until you really hurt retention," he said.

Hayden said MOAA is already hearing anecdotal evidence of troops bailing out of the service for civilian life mainly because of compensation trims.

Pentagon officials have repeatedly told Congress the lower pay raises are not ideal but are not crippling, and once again are disputing suggestions of a significant gap between military and civilian pay.

They have also noted that a focus on troops' paychecks does not consider other pillars of military compensation such as housing benefits free health care and heavily discounted prices at base commissaries.

However, the Pentagon's budget plan calls for further cutbacks in housing allowances so that troops cover about 5 percent of their costs out of their own pockets; suggests that prescription co-pays may rise again under the military's health plan; and seeks to trim back subsidies for commissaries, driving up prices and shortening store hours.

Taking a fresh look

In testimony before the Senate Armed Services Committee, incoming Defense Secretary Ash Carter noted that "compensation and benefit costs must be balanced with readiness and modernization requirements to ensure we maintain the highest quality, ready, and modern military force."

In coming weeks, Carter will return to Capitol Hill for more budget hearings at which he will defend the lower pay raise proposal.

Last year, House members pushed to have the military pay raise at least match private-sector wage growth, but accepted a lower pay raise after negotiations with the Senate.

Members of both chambers promise a fresh look at the issue this year, along with the long-term personnel changes recommended in the Military Compensation and Retirement Modernization Commission report.

Hayden said he is hopeful that his and other groups can successfully lobby lawmakers to block the Pentagon plans this year, even while military leaders argue that the billions saved by the pay changes over coming years could fill critical needs elsewhere.

"The question is, when is enough going to be enough?" Hayden said. "We need the military to speak out about the negative impact this has on their wallets too. Once you start trimming back on pay, you're starting to threaten readiness."

http://www.marinecorpstimes.com/story/military/benefits/pay/2015/02/16/pay-gap-insidious/23355935/

Response by LCDR Rabbah Rona Matlow made Feb 16 at 2015 1:04 PM

2015-02-16T13:04:33-05:00

I have posted several comments about this on RP in recent weeks. It is a horrible breach of faith with the troops to cut your active duty pay and increase copays while keeping you at such high OPTEMPOS.

No incumbents get re-elected to DC!

Response by SGT Jim Z. made Feb 16 at 2015 1:06 PM

2015-02-16T13:06:05-05:00

I agree that pay raises over the last few years have been ridiculously small. However, they have also been small in the civilian sector as well. Last year my company capped all pay raises at 3% and you had to have a top of the line evaluation to get the 3%. Most my co-workers received 1-2% pay raises which was on scale of course we weren't being shot at or blown up. I personally believe that members of Congress need to scale their pay raises and re-allocate that money to soldier and retiree pay.

Response by SGT William Howell made Feb 16 at 2015 1:38 PM

2015-02-16T13:38:38-05:00

I just read that Obama may well be the 17th best President we ever had. Of course that is from the liberal media. I wonder how well he would fair if we asked the troops?

It reminds me of Jimmy Carter times. My father was in during that time and we lived of food stamps, yet the government kept expanding. It took Reagan coming in to get us out of poverty.

Why is it so hard for liberals to take care of the people that serve this country?

Response by SSG Private RallyPoint Member made Feb 16 at 2015 1:48 PM

2015-02-16T13:48:03-05:00

In reality there is actually no pay raise. As that is all they seem to advertise is the actual pay raise. What they are not making public is the decrease in Housing allowance and the fact that prices at the mess all went up by .95 for breakfast and I would have to check on the Lunch Dinner side as I usually bring my lunch to work.

When it is all said and done though we are actually not getting a raise but rather losing money with decreases in the paycheck elsewhere.

I personally do not live paycheck to paycheck but for those that do this really hits them hard.

Coupled with those at the top wanting to change two Uniforms within the same fiscal year is really hurting our Soldiers.

Response by SFC Private RallyPoint Member made Feb 16 at 2015 8:21 PM

2015-02-16T20:21:49-05:00

All I can say is in 1 year, they can stop paying the Military. I'll be retired, they can find some other sucker to underpay, overwork and continuously screw over.

Response by TSgt David Holman made Feb 16 at 2015 9:50 PM

2015-02-16T21:50:58-05:00

I watched several strong medics get RIFed when we were cutting down our ranks due to the budget. We are well compensated for what we do (sorry, but I don't know any EMTs/RMAs that make near what I do on the outside). Yes it is disappointing that our raises are lessening, however if it is what it takes to keep the mission going, so be it. As long as they don't continue to view compensation as the only cutting point, I am willing to take a little less of a raise to make sure that people aren't fighting for a job.

Response by SPC(P) Jay Heenan made Feb 17 at 2015 2:25 AM

2015-02-17T02:25:37-05:00

This is dumb. Of course our raises are getting smaller, so is our numbers and so is the DoD budget. I think people are just frustrated with our elected officials. They are the only ones that don't seem to be suffering. I think folks are just tired of them telling us how we need to do more with less, but they aren't giving anything up. I haven't read anything that states they are going to pay us LESS, they are just lowering our raises...we ARE still getting raises, just smaller ones.

Response by 1SG Hector A. Rivera made Feb 17 at 2015 2:26 AM

2015-02-17T02:26:02-05:00

I have yet to meet someone who remains in the service strictly because of the pay. It is a fact that we are well compensated for what we do, and I'm almost 100% sure that it is not the same in the civilian sector.
However, the issue is what the pay raises, and military pay in general communicates. We give up so much of our lives, and our families lives to the uniform, only to hear politicians basically say "They'll be all right." Meanwhile, they continue to give themselves huge pay raises and earn retirement after much less than half of what service members have to serve in order to earn 50% of their pay is insulting...

Response by Capt Richard I P. made Feb 17 at 2015 8:48 AM

2015-02-17T08:48:43-05:00

A brilliant talent retention strategy.

Response by MAJ Private RallyPoint Member made Feb 17 at 2015 8:49 AM

2015-02-17T08:49:10-05:00

Do any of you actually miss the 1-2%? It's like $20.

Response by PO1 Private RallyPoint Member made Feb 17 at 2015 11:37 AM

2015-02-17T11:37:01-05:00

What?!? We get pay raises?!? Never noticed....

Response by GySgt Private RallyPoint Member made Feb 17 at 2015 12:13 PM

2015-02-17T12:13:30-05:00

In civilian world, supply and demand dictate compensation. The military is also responding to that. I am happy that comp has increased over time for troops. However, many troops are running into challenges when leaving the service and their skills are not transferable. A lot are now getting paid way less than when on active duty. Civilians are very aware of comp impacts with career changes.

Response by SPC David Hannaman made Feb 17 at 2015 1:32 PM

2015-02-17T13:32:01-05:00

Although the article seems straightforward mathematically the issue really isn't. Pay raises are only one part of the equation.

If you get a pay raise, but inflation and CPI (Consumer Price index) raises at the same rate as that pay increase then your situation hasn't really changed. By the same token if Inflation and CPI is higher than the raise you actually got a pay *decrease* because the dollars that went into your bank account don't buy as much bread, milk, gas, electricity, etc. (you just feel better about it).

It's important to understand that and make adjustments to your budget.

In the military there's an adjustment that you don't get in civilian life, that is there's a bump in pay that goes along with time in service. However, I did some quick calculations and it looks like it's about 4% for two years (Inflation and CPI averages about 3% per year).

Bottom line, working hard and getting promoted beats waiting on the politicians to take care of you.

Response by MSG Private RallyPoint Member made Feb 17 at 2015 1:55 PM

2015-02-17T13:55:01-05:00

I don't much worry about the yearly pay raises. Don't get me wrong after ten years you are talking a 10% pay increase at 1% a year and that is great. I am more concerned with the BAH cuts coming soon, depending on the area you live this could create a hardship for some. Soldiers should not have to worry about reevaluating their living situation once they PCS for the government to save a few pennies.

Response by MSgt Private RallyPoint Member made Feb 17 at 2015 2:01 PM

2015-02-17T14:01:09-05:00

I now work for city government and have not had a raise for the last three years. But I do make pretty good money and have good benefits. And I hear many complain about how terrible we are paid. I believe many in government are spoiled and greedy, everybody always wants more. And although I like to see our military compensated very well because I think they deserve it for the sacrifices they make. When you look at the whole package the military is doing pretty good. Granted some in the lower rates may need assistance but it is the same in the civilian sector. It seems these days everyone wants to start at the top. In my humble opinion the military is much better compensated today then say forty or fifty years ago. Wages are the biggest expenditure of must every business so naturally that is the first to be attacked and cut.

Response by LCDR Rabbah Rona Matlow made Feb 17 at 2015 2:29 PM

2015-02-17T14:29:10-05:00

For those who have the patience and time to read it, here is the link to the commission on modernization of military compensation:

http://www.mcrmc.gov/index.php/reports

Please note that of the members, only two wore a uniform, and neither have been in for a while. It is really unfortunate that civilians, who have little concept of what the military does, make decisions like this.

For those who commented that we actually have it pretty good re pay and benefits: Sure, if you never deploy, are never on duty, and have no significant military unique injuries, then yes it's a good deal.

For the rest of us, when you average out the pay over the hours we deploy, it is so far below the minimum wage it's not funny.

Sure, most of us didn't or don't do it for the $$, but at the same time, we do expect to be compensated fairly, in uniform and after, for what we contributed to our country.

Response by MAJ Private RallyPoint Member made Feb 17 at 2015 11:30 PM

2015-02-17T23:30:05-05:00

I'll be quite honest. I am living proof anyone can be a Major..I graduated with a Crim degree and had to get a waiver as I didnt have a high enough GPA in my major lol....The point-17 years of service-11AFS, 6 of that AFS from deployments and MOBs in the reserves..Even the most difficult/ stressful staff jobs are a cake walk (minus combat zone deployments) in comparison to the civilian sector. Even having a few weeks of 17 hour days is balanced out with tons of 4 day weekends and weeks of 8 hour days..most folks still find enough time in the workday to blow two hours on FB..A job that provides decent retirement, basically 2 full months of leave/ holiday weekends..name a civilian Job where mid level management makes over 100K a year and doesn't have to provide real KPIs, deliverables in the form of Productivity/ TE..and has a Crim degree for education..

Response by 1LT Private RallyPoint Member made Feb 18 at 2015 12:54 AM

2015-02-18T00:54:00-05:00

Before cutting "military pay" you need to understand the parts of the military budget. Military pay doesn't exclusively mean salaries as you would think in the civilian world. Rather, it includes things like pensions, training days for the reserves, and travel expenses. So, I'd be skeptical when someone claims doomsday when we start discussing a cut in military pay. They could be trying to protect their pensions.

Do I think we should cut military pay? Yes, we should cut some pensions. The biggest expense causing a deficit each year is not acquisitions, health care, or current salaries; rather it is the pension payments and pension accrual cost. We save pensions for jobs with the least transferable skills to the civilian world like combat arms positions and cut pensions for those with administrative support jobs. It's a win-win. The government doesn't abandon the combat soldier to fend for themselves after years of self-less service and we save the taxpayers dollars from those soldiers that don't need it. Like in Catch 22 , if your sane enough to get a cushy job in the military, you should be sane enough to get a civilian job and the government does not need to help you as a veteran.

We could also change the pay grades and factor in "social income". For instance, instead of paying bureaucrats on staff significantly more than a line soldier based on rank, we could factor in the position at hand. We could pay them the same salary ,but say the fact you don't have to ruck march and roll in mud is part of your "social income." Or, the privilege of administering policy can also be part of your "social income". It is a way of cutting "overhead" instead of cutting the direct labor.

Response by MSgt Private RallyPoint Member made Feb 18 at 2015 8:49 AM

2015-02-18T08:49:17-05:00

Do I think the discussion in this article is a big deal? Not too much...but here's the thing: Not a year goes by that we don't hear about our pay, retirement, medical, education, housing and other benefits being targeted to help save the Gov money. My beef with the budget roller-coaster is simple. There are many unnecessary programs still going and wasteful spending happening. It doesn't make sense to me to target service members and their families before cutting these things out.

Response by SFC Private RallyPoint Member made Feb 18 at 2015 9:58 AM

2015-02-18T09:58:40-05:00