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Military Pay and Benefits: Key Questions and Answers

Abstract : In the late 1990s, the military services were facing considerable recruiting and career retention problems. In responding, Congress was mindful of how low pay had contributed to decreased recruit quality in the late 1970s. It authorized larger pay raises, increased special pays and bonuses, more recruiting resources, and repeal of planned military retired pay reductions for future retirees. In the midst of these efforts, the terrorist attacks of September 11, 2001, took place, providing a sense of national unity and military purpose. The 9/11 attacks and the programmatic changes noted above initially helped recruiting substantially in the early 2000s. However, initial recruiting results for the first few months of 2005 indicate that the grueling pace of deployments to and from Iraq and Afghanistan, combined with the dangers of combat, have finally begun to cause long anticipated recruiting problems. Career retention is difficult to measure, due to the suspended separation and retirement of many personnel since September 11, 2001, but so far retention has been more than satisfactory. Debate continues over what kinds of pay and benefit increases are best for improving recruiting and retention. Of particular interest is the balance between across-the-board pay raises on the one hand, and ones targeted by grade, years of service, and occupational skill, on the other; and between cash compensation on the one hand and improvements in benefits such as housing, health care, and installation services on the other.