Gap, What Gap?

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The Government Accountability Office (GAO), on April 1, 2010, released a 54 page report to some various congressional committees; the subject, "Military Personnel: Military and Civilian Pay Comparisons Present Challenges and Are One of Many Tools in Assessing Compensation." A difficult subject such as this deserves a long title and a ton of research. The report is a result of requirement placed on the GAO to study the pay gap between the military and the private sector by the "National Defense Authorization Act for Fiscal Year 2010."

The current method of determining how big the pay gap is should also figure an element of the military family's overall earning power which I believe is greatly reduced due to the relatively frequent moves made when a member transfers from one duty station to the next. Although the GAOs report does in fact discuss the frequent moves in the body of the report and in a concluding observation (page 21):

While serving in the military offers personal and professional rewards, such service also requires many sacrifices, frequent moves and jobs that are arduous and sometimes dangerous. As a result, ultimately the department's ability to recruit and retain personnel is an important indicator of the adequacy or effectiveness of its compensation.

The report is ambitious in its approach, as it attempts to consider every possible cash and noncash compensation imaginable, but doesn't address the frequent moves in any formula. To illustrate how they compared various jobs, there is a chart on page 46 that made some assumptions that each and every member can or will stay to become retirement eligible. Among other things, the chart doesn't consider overtime compensation most of the civilian jobs listed do receive - I mean heck, let's be real - who works just a 40 hour week in the military?

The GAO report does discuss the current method of using the Employment Cost Index (ECI) to determine future pay raises; moreover, it discredits the method of using ECI because it doesn't take into consideration cash and noncash compensation outside of basic pay. Coincidentally, the work of putting together this report started in November 2009 - the ECI used to determine a proposal for 2011's pay raise was released on 30 October 2009.

I suspect, combined with the fact that the economy has been in dire straights, unemployment is running about 9.7%, and recruiting is as successful as it ever has been that a pay raise beyond the current 1.4% proposal by President Obama is about all we will see for 2011. Yes, the report concludes that more study is needed, but provides just enough fodder to help congressional members shrug off H.R. 4427 (18 cosponsors), a bill to raise the pay an additional .5% to 1.9% - just as has been passed since 1999. Also, I think our military retirement system and Tricare in its entirety will come under significant challenge in the next year - all in the name of, ...DOD's need to balance its personnel costs with its desire for new equipment and infrastructure (page 6 of report).

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