“People are our most valuable resource.” How many times have we heard this platitude? Too many. The retort is oftentimes how exactly are service members valued? How does the leadership of our military institution value them and their service? The work of our Foundation is centered about fair and just treatment of military personnel. We have consistently believed that service members who are treated along the lines of the American principles of fairness and justice will serve dutifully and honorably which, thereby, improves the quality of the national defense. But aside from those intrinsic incentives, which are frankly not progressing at nearly the rate they need to, what about extrinsic rewards, i.e. pay…?
We performed a cursory look at member pay and housing allowance and the unsettling trends of both over the past decade or so and here is what we’ve discovered: military pay and supplemental pay is lagging the fight, and is doing so at a not-so-insignificant pace.
One Example: The Air Force “Critical Juncture”
For the average pilot in the Air Force, the 12-year mark is a critical juncture in which their service commitment is ending and they are faced with the decision of remaining in the service or not. This is the reason we examined O-4 with 12 years of service pay trends over time and here is what we ascertained:
In 2013, a 12-year O-4 in the military made $6,853.00 per month in base pay. Adjusted for inflation (source: U.S. Bureau of Labor and Statistics), that salary would be the equivalent of $8903.00 in today’s dollar. Conversely, a 12-year O-4 today makes $8666.00 per month.
Translated: this particular officer band has taken a $237 per month pay cut over the past decade; one in which they have made incredible sacrifices mind you. Let’s take a moment to put this in perspective: recruiting is in the toilet, and competitor industries are dolling out major pay hikes to the tune of 40%, even retroactive ones, and officers in the U.S. military have taken a pay cut!?
It harkens back to my days on the Air Staff when I’d hear “but we can’t compete with the airlines in terms of pay…”
Given these stats, all we can say is: “Dudes, you’re not even trying!!”
For those enlisted, you’re fairing a little better, but the gap is closing…
An E-7 at 12 years made $3673.20 a month in 2013 which is $4772.07 a month in today’s dollar. Current salary: $4900.50 a month (where’d they come up with the $0.50 anyways?). So, you all are fairing a little better but as you can see from the graph below, the raise you enjoyed relative to inflation is quickly dissolving.
Getting Crushed: The Housing Allowance
Before delving into this topic, we will address all the Poindexters out there who will be hair-triggered to explain what the formula for Basic Allowance for Housing (BAH) is and what it accounts for and doesn’t and yada yada. But here are the facts: the housing market has exploded in this country and BAH has simply not kept pace. If you go to Manhattan, Kansas and buy a house today, it will cost you 35% more than it did in 2015. If you owned a house and wanted to rent it out, you’d do so at a rate commensurate with your mortgage and/or rental rates of other houses similar to yours and those have increased at similar rates. This is not Nobel-laureate type economics here. So, we looked at the percentage increase in median home prices at a few military locations throughout the nation (send us yours if you’re interested), then looked at the percentage that BAH has increased during that same time. As you can see, it’s not good and some of the largest disparities are at locations with some of our largest presences (Killeen, TX, e.g.).
But the Military Doesn’t Control Pay
“This sweeping hold is undermining America’s military readiness. It’s hindering our ability to retain our very best officers. And it’s upending the lives of far too many American military families.”-Defense Secretary Austin on the Senate’s delays of Flag Officer Confirmations
True – the military does not control personnel pay. Those authorizations come from our Congress. But could our military leadership not be testifying and advocating for those pay and BAH increases? They absolutely could! What have they been clamoring about lately though, calling out their civilian leadership on? How they themselves were not getting moved and promoted fast enough.
As a former USAFA Commandant used to tell us: “Life is all about priorities.”