Setting the Level and Annual Adjustment of Military Pay
Abstract
A key objective of the military compensation system is to enable the military to attract and retain personnel in sufficient numbers and quality to meet its manpower requirements, and to do so efficiently. With respect to the quality of military enlisted recruits, the U.S. Department of Defenses (DoDs) stated requirement is that 90 percent of recruits each year and in each service must be at least high school graduates and that 60 percent must be above average in terms of aptitude. To meet these requirements, past commissions, including the work of the Ninth Quadrennial Review of Military Compensation (9th QRMC) in 2002, found that military pay should be set at around the 70th percentile of the earnings for similar civilians. The 9th QRMC found that pay must be higher than average civilian pay because of the unusual demands and arduous nature of military service. The specific benchmark of the 70th percentile was chosen based on research from the 1990s that used data from the late 1980s and mid-1990s. Setting military pay involves not just setting the level but also determining the annual military pay adjustment. By law, the annual increase in military basic pay is guided by changes in the Employment Cost Index (ECI), a measure of the growth in private-sector employment costs computed by the Bureau of Labor Statistics within the U.S. Department of Labor. The ECI is also used to guide changes in the pay of federal General Schedule civil service employees, and, since 1967, the annual pay adjustment for military pay has been tied to the adjustment for General Schedule employees.
Document Details
- Document Type
- Technical Report
- Publication Date
- Jan 01, 2020
- Accession Number
- AD1118214
Entities
People
- Beth J. Asch
- Jason M. Ward
- Michael G. Mattock
- Troy D. Smith
Organizations
- RAND Corporation