Published: Saturday, March 15, 2008
Military pay is now on par with civilian
A new Department of Defense study of military compensation finds no pay gap exists today between service members and civilian peers.
But the study, conducted over the last two years, advises defense leaders to adopt a new tool for comparing military and private sector compensation so that service members learn to appreciate the full value of their more favorable package of pay, benefits, allowances and tax breaks.
The military compensation study also calls for changes to key elements of cash compensation:
Housing allowances for people without dependents living off base should be raised in stateside areas as budgets permit, so that over time it covers the full cost of rent and utilities.
Defense pay officials began to close this gap for single members but there's still a way to go before they no longer face out-of-pocket costs to rent housing of similar size and quality to civilian peers.
Partial housing allowances paid to single members living in barracks or aboard ship should be raised and made variable, based on the type of living quarters.
The services should raise permanently the basic pay of members advanced ahead of their peers. This would be done by assuming, for pay purposes only, that top performers entered service a year earlier than they did so they would reach longevity steps built into the military pay table sooner than peers. The same authority could be used to make more competitive pay offers to physicians.
Defense officials will study the recommendations and decide what changes the administration wants to embrace, seek new legislative authority where needed to make compensation more flexible or efficient.
Dr. Jan "Denny" Eakle, a retired Air Force brigadier general and former deputy director of the Defense Finance and Accounting Service, has served as the pay study director since it began work in February 2006.
In an interview, she said "it's a bit disingenuous" to still refer to a 3.5 percent pay gap today between the military and private sector, based on wage growth since 1981, when officials declared military pay had reached "comparability" with private sector civilians.
These pay gap claims are based solely on basic pay and ignore hefty increases in housing allowances, a major element of military compensation. Eakle said that when allowances are counted, cumulative growth in military compensation since 1981 has exceeded civilian pay growth by 6.5 percent.
But military people need a new tool to recognize the "real value" of their pay and benefits, she said.
The new study also would assign a value to military retirement for members entering the career force and value additional tax breaks on military allowances tied to Social Security taxes and state taxes avoided.
New military compensation would add $4,300 to $16,100 to the value of enlisted member compensation and $4,100 to $30,000 to officer compensation, Eakle said, when comparing military pay and benefit values to the private sector.
If Defense leaders chose to adopt the new rules, Eakle said, pay comparability should be declared when members exceed the 80th percentile of compensation for civilians of the same age and education level.
Asked if the new rules would serve to hold down future military pay raises, Eakle said basic pay adjustments will continue to be tied, by law, to annual private sector wage growth. But service members should begin to see more clearly the relative value of their compensation elements.
"Our intent is to have a better measure to compare two individuals -- one wearing the uniform, one in the private sector -- and say, 'What would this member have to make, were he a civilian, to be at the same standard of living,' " Eakle said. She later added, "We need to educate the force on what the real value of their compensation is."
E-mail milupdate@aol.com.
But the study, conducted over the last two years, advises defense leaders to adopt a new tool for comparing military and private sector compensation so that service members learn to appreciate the full value of their more favorable package of pay, benefits, allowances and tax breaks.
The military compensation study also calls for changes to key elements of cash compensation:
Housing allowances for people without dependents living off base should be raised in stateside areas as budgets permit, so that over time it covers the full cost of rent and utilities.
Defense pay officials began to close this gap for single members but there's still a way to go before they no longer face out-of-pocket costs to rent housing of similar size and quality to civilian peers.
Partial housing allowances paid to single members living in barracks or aboard ship should be raised and made variable, based on the type of living quarters.
The services should raise permanently the basic pay of members advanced ahead of their peers. This would be done by assuming, for pay purposes only, that top performers entered service a year earlier than they did so they would reach longevity steps built into the military pay table sooner than peers. The same authority could be used to make more competitive pay offers to physicians.
Defense officials will study the recommendations and decide what changes the administration wants to embrace, seek new legislative authority where needed to make compensation more flexible or efficient.
Dr. Jan "Denny" Eakle, a retired Air Force brigadier general and former deputy director of the Defense Finance and Accounting Service, has served as the pay study director since it began work in February 2006.
In an interview, she said "it's a bit disingenuous" to still refer to a 3.5 percent pay gap today between the military and private sector, based on wage growth since 1981, when officials declared military pay had reached "comparability" with private sector civilians.
These pay gap claims are based solely on basic pay and ignore hefty increases in housing allowances, a major element of military compensation. Eakle said that when allowances are counted, cumulative growth in military compensation since 1981 has exceeded civilian pay growth by 6.5 percent.
But military people need a new tool to recognize the "real value" of their pay and benefits, she said.
The new study also would assign a value to military retirement for members entering the career force and value additional tax breaks on military allowances tied to Social Security taxes and state taxes avoided.
New military compensation would add $4,300 to $16,100 to the value of enlisted member compensation and $4,100 to $30,000 to officer compensation, Eakle said, when comparing military pay and benefit values to the private sector.
If Defense leaders chose to adopt the new rules, Eakle said, pay comparability should be declared when members exceed the 80th percentile of compensation for civilians of the same age and education level.
Asked if the new rules would serve to hold down future military pay raises, Eakle said basic pay adjustments will continue to be tied, by law, to annual private sector wage growth. But service members should begin to see more clearly the relative value of their compensation elements.
"Our intent is to have a better measure to compare two individuals -- one wearing the uniform, one in the private sector -- and say, 'What would this member have to make, were he a civilian, to be at the same standard of living,' " Eakle said. She later added, "We need to educate the force on what the real value of their compensation is."
E-mail milupdate@aol.com.
Comments
(
