The U.S. Department of Defense periodically calculates the average annual
pay of its enlisted troops and officers, compared to civilians (of the same age
and education). Currently, enlisted troops make $5,400 more than their civilian
counterparts, while officers make $6,000 more. A new government study suggests
that various tax breaks actually increase that to $10,600 for enlisted troops,
and $17,800 for officers.
This news is
unlikely to result in a cut in military pay. The hardships of wartime service
have caused several temporary pay increases, for things like combat pay and
enlistment and re-enlistment bonuses. These have increased average compensation
by over ten percent. For example, re-enlistment bonuses have gone from $98
million a year a decade ago, to nearly $600 million a year now. Housing has
been upgraded and Congress has increased life insurance benefits. All this is
done for the same reasons civilian organizations do it in a tough labor market.
You raise pay to keep jobs filled. The Department of Defense has borrowed these
analytical techniques and pay polices to keep the ranks full during wartime,
the first time that has ever been achieved.