Military News - Military Times

Your 2009 pay raise

The Bush administration is seeking a 3.4 percent raise for all service members next year — the minimum that could be requested under federal law and an amount that advocacy groups are already saying is too small.

The proposed raise, part of the White House’s 2009 defense budget request to be unveiled today, would equal the average growth in private-sector wages in 2007, as measured by the Department of Labor’s Employment Cost Index, or ECI. As such, it would be the minimum raise allowable under current law.

Military pay is tied by law to the ECI, which tracks quarterly changes in compensation for most private-sector and all state and local government employees.

Here are some examples of what a 3.4 percent pay increase would mean:

* An E-4 with more than three years of service now earns $1,949.10 per month; that would rise to $2,015.40 per month on Jan. 1 under the Pentagon plan.

* An E-7 with more than 10 years of service now earns $3,263.10 per month; a 3.4 percent raise would turn that into $3,374.10 per month.

* An O-3 with more than six years of service now earns $4,763.10 per month; that officer would earn $4,925.10 per month with a 3.4 percent pay increase.

The proposed 2009 raise is almost equal to the 3.5 percent increase for this year that was finalized Jan. 28, when Bush signed the revised 2008 Defense Authorization Act.

However, by merely matching private-sector wage growth, the proposed 2009 military raise would not continue to close a so-called “pay gap” that some say exists between military and civilian compensation.

The gap has supposedly existed since 1982, the second year of two massive pay increases under President Reagan that marked the last time rough parity is thought to have existed between military and civilian wages. The gap peaked at 13.5 percent in 1999, but in this decade, a series of raises slightly above the annual increase in the ECI has narrowed the gap considerably.

For 2008, the administration originally proposed a pay raise of 3 percent, which would have matched the ECI increase for 2006. The Pentagon argued that five consecutive years of robust increases had effectively eliminated any remaining gap.

But Congress eventually decided on a 3.5 percent raise for this year, in a nod to the idea that a gap still exists. According to military advocacy groups, the 2008 raise that took effect a few weeks ago has reduced the pay gap to about 3.4 percent.

Some advocates are already preparing to urge Congress to boost the administration’s proposed raise for 2009.

For example, the Military Coalition, an umbrella group of more than 30 military and veterans associations, said it hopes Congress will rally around a 3.9 percent pay raise, a half-percentage point above the Bush request, which would continue to slowly close the pay gap.

According to the 9th Quadrennial Review of Military Compensation, completed in 2002, overall regular military compensation — basic pay, housing and food allowances, and the tax benefits of those tax-free allowances — should be at the 70th percentile of comparable earnings of civilians with some college education. In other words, troops generally should be paid better than 70 percent of their civilian peers.

That figure was chosen as the target because the QRMC found that based on historical data, the military did not have recruiting or retention problems when pay was at that level.

The Congressional Budget Office issued a study in 2007 that found that in 2006, total cash compensation and the tax benefits of tax-free allowances for the average enlisted member exceeded the 75th percentile.

2009 Basic Pay: Proposed 3.4% Increase

Years of service: 0-20 22-40

2009 Drill Pay: Proposed 3.4% Increase

Years of service: 0-20 22-40

Discuss: The proposed increases