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Is the military paying troops too much? Yes and no, study finds

The military has been paying service members much more than the minimum benchmark it set decades ago, according a Pentagon-funded study, so it should probably raise the benchmark.

For roughly the past 20 years, the Defense Department has set its uniformed pay grades at about the 70th percentile, meaning 70 percent of civilian jobs that require similar levels of experience and education pay less than the military, and 30 percent pay more. But as part of a regular review of the compensation system, Rand Corp. experts suggest updating that policy.

“Analysis of military and civilian pay in the 1990s indicated that pay at around the 70th percentile had historically been necessary to enable the military to recruit and retain the quality and quantity of personnel required,” according to the report, part of a compensation review done every four years. “But more recent research has found that military pay has exceeded the 70th percentile benchmark in recent years, raising the question of the continued relevance of this benchmark.

This balance has gotten out of whack as military pay raises accelerated through the 90s and the first decade of the new millennium. At the same time, according to the research, average wages across the U.S. have dropped.

Officers, generally, are making closer to the 77th percentile of comparable civilian wages, while enlisted troops are at the 85th percentile.

“These findings suggest that the RMC percentiles may be too high, since recruit quality today exceeds DoD’s benchmarks and, further, quality and retention both exceed the levels observed during the late 1980s and mid-1990s, when the 70th percentile was established,” the report found. “That said, these findings do not necessarily imply that the 70th percentile continues to be the appropriate benchmark.”

Rather than slowing the growth of military pay to get it closer to current civilian standards, according to Rand, the Pentagon’s policy should more closely reflect the reality of pay as it is now.

Between the 75th and 80th percentile would make sense for enlisted troops, the report found, with the 75th for officers.

Crunching the numbers

The goal is to find the sweet spot, where DoD pays troops just enough to attract high-quality recruits and encourage those currently serving to stay in.

At a minimum, DoD aims for 90 percent of its recruits to be high school graduates, with at least 60 percent of them scoring above-average on the Armed Forces Qualification Test.

In 2018 and 2019, according to the numbers, nearly 97 percent of recruits were high school graduates and 75 percent had above-average aptitude scores. This suggests, according to the report, that perhaps the military is overpaying, because it is recruiting more educated people than it actually needs.

According to the numbers, recruit quality has been steady in recent years, except when you take out the Army’s numbers ― then, military recruit quality for the other services has been on a steady upswing, while retention has been at record highs across the Army, Navy, Marine Corps and Air Force.

However, according to the report, more technically advanced specialties ― particularly where the rise of cyber warfare is concerned ―likely requires these higher-quality recruits.

“The higher recruit quality and retention could also reflect increases in recruiting and retention resources that also affect outcomes, such as enlistment bonuses, reenlistment bonuses, and recruiters,” according to the report. “Past studies have found that outcomes are positively related to these resources.”

For that reason, the report recommends not only creating a new benchmark to pin military pay to, but also increasing DoD’s recruit quality percentage requirements, so they more closely reflect what the department has shown itself able to accomplish.

“First, changes in defense threats, readiness requirements, and military technology may have shifted manpower requirements toward higher-aptitude recruits in some services,” according to the report. “If this is the case, then DoD should increase the recruit quality benchmarks and consider resources other than higher pay, such as bonuses and special and incentive pays, to achieve those benchmarks.”

However, in considering changes, the department should keep in mind the current recruiting environment, given how few American youth are physically, medically and behaviorally qualified to join up.

“Second, even if current recruit quality benchmarks remain valid, there are reasons to believe that the recruiting environment is more difficult than it was in earlier periods, due to factors that are not transitory (such as a historically low unemployment rate), making recruiting requirements more difficult to achieve today than in earlier years,” according to the report.

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