Military Pay Competitive With Private Sector

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live-free-today_20091125111853_money-stacks-1024x768Military compensation is competing well against the private sector, with service members getting higher salaries than 70 percent of their private-sector peers of similar education and experience, William J. Carr, deputy undersecretary of defense for personnel policy, yesterday 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 counterparts that have similar schooling and background, Carr told the committee.

A $340 million investment in such pays could give $30,000 bonuses to more than 11,000 service members 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 service members. At the same time, however, it is important to make sure 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, which makes up for 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; rather, it reflects less need to use them during the slow economic recovery, Carr said.

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

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