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Reporting for Duty: Weighing in on Military Pay

Imagine a job where, on graduating high school, you're eligible for a signing bonus as hefty as $40,000, your healthcare plan is sterling, your gym membership is free, and if you have a family, your compensation climbs.

The employer offering that job is the U.S. military. At first blush, signing up with Uncle Sam sounds better than some pay scales and packages in the private sector. Indeed, military pay scales have improved recently, according to a June 2007 Congressional Budget Office study. After re-enlistment rates dropped in the late 1990s, lawmakers and the Defense Department boosted military pay scales, the study explains.

The CBO estimates that "regular military compensation adjusted for inflation-basic pay, allowances for food and housing, and the tax advantage that arises because those allowances are not subject to federal income tax-grew by 21 percent for the active-duty enlisted force as a whole between 2000 and 2006." And, "as of 2006, military compensation compared favorably with civilian compensation."

But there are drawbacks.

"Many military jobs are more hazardous, require frequent moves, and are less flexible than civilian jobs in the same field. Members of the armed forces are subject to military discipline, are considered to be on duty at all times, and are unable to resign, change jobs at will, or negotiate pay," the study says.

Understanding Military Pay Scales and Compensation

Stephen Norred, managing partner with Kaye/Bassman International, an executive search firm, said the military must stay competitive with the private sector.

"The military is competitive within itself, and with the private sector when you consider the whole picture," said Norred, who specializes in helping people transition from military to civilian careers.

The "whole picture" Norred referred to involves the different ways military pay is measured: basic pay, housing and food allowances, tax advantages, health care, retirement and veterans' benefits, and special pay and bonuses.

For example, the average enlisted Army soldier in 2006 earned $41,700 in basic pay and housing and food allowances; when including special pay and bonuses, the earnings rise to about $44,900, according to an August 2007 issue brief by the CBO.

It's also important to understand there are two workforces within the military, said
Terry Howell, managing editor for Military.com.

"The enlisted side is your skilled labor through middle management-cooks, computer technicians, aviation electricians, etc. ... The second workforce is the officer workforce. These are people who come to the military with little experience but they have a college education," said Howell, a retired Coast Guard Chief Petty Officer. "It's the difference between someone in the mail room and someone in the board room."

Military pay scales have 10 pay grades (ranks) for commissioned officers and nine for enlisted service members, he explained. As both groups advance in rank and log more years of experience -- and if they have families -- their pay scale and compensation increases.

In 2006, compensation for a single enlisted member was $29,700 at the lowest pay grade and $85,900 at the highest; an enlisted member with a spouse and two children earned $32,800 at the low end and $89,600 at the highest, according to the CBO.

Comparing Military Pay Scales and Civilian Pay Scales Is Tricky

Congress recently approved a plan to increase military pay by 3.5 percent; the Bush administration had proposed a 3 percent raise.

A Washington Post article says the 3.5 percent increase "appears in line with private-sector pay plans for next year. A recently released survey of more than 1,000 employers conducted by Mercer Human Resource Consulting showed the companies plan to provide average pay raises of 3.8 percent in 2008, about the same as this year's average private-sector raise."

But making a direct comparison between military pay scales and civilian pay scales is difficult for several reasons, the CBO says.

Working conditions between the two can be extremely different. Military personnel put their lives on the line in danger zones, and often change locations every few years-their civilian counterparts typically don't face the same job requirements.

Pay scale comparisons also can overlook training and education. The military focuses on recruiting high-school graduates and provides them with the training they need to do their jobs. On the flip side, private employers tend to hire people already educated and trained.

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