During the last presidential campaign, George W. Bush raged about the need
to improve living conditions for military personnel and their families.
After learning that thousands of servicemembers were on food stamps, Bush
told the Armed Forces Journal International, "This is not the way that a
great nation should reward courage and idealism. It is ungrateful, it is
unwise, and it is unacceptable." Accordingly, he promised that one of his
first actions if elected would be to spend $1 billion to increase military
pay and upgrade substandard military housing. He upped the ante after his
inauguration, promising about $6 billion for pay, health benefits, and
housing.
But if you drive through any military base and end up at the base
exchange--the military department store (complete with home and garden shop
and liquor store)--what do you see? In addition to clean-cut men and women
walking purposefully past manicured lawns along clean streets, do you notice
anything incongruous? Take a good look at the cars. Notice the military
stickers on the windshields. If you look closely at the vehicles with blue
and red stickers (denoting officers and enlistees), look how new and
well-kept they are. Then look at what servicemembers and their families are
toting out of the busy complex: TVs, VCRs, stereos, jewelry, clothes . . .
everything imaginable.
How can this be? We've all heard for years that military personnel are
living in poverty, some receiving food stamps. The outrage comes not only
from pandering politicians, but also from some military personnel themselves
and especially their lobbyists like the American Legion, the Veterans of
Foreign Wars, and almost a dozen other groups.
Every year, as Congress debates the military budget, you're likely to hear
much wailing and gnashing of teeth among military boosters. Stories about
shabby housing and servicemembers living on food stamps are tossed around as
if the entire military is living in Dickensian squalor. Members of Congress
duly express their support for military pay increases with only the vaguest
notion of how the military compensation system is structured and how it
compares to that of civilians. A budget is enacted, usually with increases
even with, or higher than, the cost of living. And individual servicemembers
howl at the injustice of being denied even more.
Complexity = Confusion
The system used to compensate servicemembers is so complex and arcane that
neither lawmakers nor most uniformed personnel really know how military
compensation compares with civilian pay. The system currently used
originated in 1922, when the Army, Navy, Marine Corps, and Coast Guard
consolidated their systems. The new one was created to compensate--in cash
and in kind--a relatively small number of people living in a completely
different milieu from today's.
>From the system's creation up through most of the Vietnam War, the armed
forces operated as the surrogate parent of their personnel--especially
enlistees. In return for loyalty, competence, diligence, and in some cases
bravery, the military would take care of your every need: housing, food,
clothing, medical care, retirement, and pocket money. Even in the early
years of the all-volunteer force, most junior enlistees and many (if not
most) junior officers were unmarried. They lived and dined on base. If they
were stationed aboard ship, they lived and ate meals aboard ship, not
ashore. With a few exceptions, the only ones who were married and lived off
base were officers and senior enlistees. These people received a cash
allowance to compensate for housing and food they would have received if
they were single and lived on base.
For most, the cash components of compensation provided for a good time in
town and little else. The in-kind components, especially extensive
recreational facilities, provided free on-base options between pay days.
Only senior officers had enough cash income to pay for an upper-middle-class
lifestyle.
Today, each service has dozens of occupational specialties, technology
touches every aspect of life (both in and out of the military), women serve
alongside men virtually everywhere, few military personnel live in military
housing, and 60 percent of them are married. Plus, young people are far more
independent and individualistic when they enter the service and expect a far
greater level of material comfort than their predecessors. Despite these
changes, the generals and admirals cling to the antique compensation system
their grandfathers knew. Lawrence J. Korb, Assistant Secretary of Defense
for Manpower in the Reagan Administration, says the current system "is
outmoded and outdated." It is so complex that listing its various components
can make your eyes glaze over.
After basic pay---a cash payment determined by one's rank and
seniority--there are more than 40 types of untaxed cash allowances. The two
most common--basic allowances for housing (BAH) and subsistence (BAS)---go
to everyone who isn't provided in-kind housing and food. There are also
three types of "incentive pay" and 30 types of "special pay," all combined
in one lump sum in every paycheck. A servicemember usually has only a vague
idea as to how many factors she qualifies for or how much she brings in from
each.
There's more. Don't forget the military's free life insurance (now paying
$100,000) and the very generous non-contributory retirement plan. It allows
servicemembers to retire after 20 years of service (as early as age 37) and
immediately collect half their pre-retirement cash salary for the rest of
their lives, indexed to inflation and in addition to Social Security.
There's also the free skill training the services provide in specialties as
varied as nuclear power plant operation and cooking, as well as generous
in-service and post-service education assistance funds. Then there's the
free medical and dental care, and a minimum of 30 days of paid leave per
year, along with tax-free stores on base and first-class, on-base recreation
facilities (including swimming pools, gyms, marinas with sail and motor
boats, movies, and racquetball courts.)
Also worth considering in the total compensation package are the federal and
state laws that allow servicemembers to shop around for a state in which to
claim residency for tax purposes. Military people also receive discounts
from civilian businesses ranging from movie theaters to theme parks to
rental car agencies to Amtrak; and there's even free, worldwide air
transportation on a space-available basis.
Show Me The Money
So far, I've deliberately used the word compensation rather than pay. In the
civilian world, employees might receive contributory retirement plans,
access to health insurance, and cheaper movie tickets, but cash wages or
salary are what really count. In contrast, in-kind benefits are nearly as
important as cash in the total military compensation package. The cash
portion, up to half of which--depending on pay grade--is untaxed, consists
of literally dozens of different types of pay, allowances, and bonuses. From
here on out, I'll use "pay" to denote the cash portion of the complete
military compensation package.
Before 1967, when legislation linked military and federal civil service
raises, military leaders lobbied hard for all pay increases. To ensure that
members of the administration and Congress looked sympathetically at
requests for a raise, military leaders encouraged the view that military
compensation was low. Navy Rear Admiral Lester E. Hubbell, who directed a
military compensation study group, wrote in the group's 1967 report,
"Modernizing Military Pay": "In the process of trying to convince others of
how bad pay was so it could get raised--because that was the only way it
could get raised in the absence of any accepted standard for what it ought
to be--the military sold its own career members on how poorly paid they
were. Much of this bad psychology remains as an integral part of the
military folklore."
But with the end of the draft in 1973, recruitment became all-important. One
of the things Congress did to make it easier for the services to attract
entry-level personnel was to dramatically increase military pay. This
brought the total military compensation package into rough parity with that
of civilians. Old habits die hard, however, and many military personnel who
were used to tiny paychecks--even when they started receiving much larger
ones--continued to complain.
Like most Americans, military personnel consider take-home pay when
comparing employment opportunities. And when they contrast their take-home
pay with that of civilian friends, servicemembers see a great disparity.
That's why, despite the large cash infusion at the end of conscription, the
folklore Admiral Hubbell noted in 1967 lingers even today.
Recognizing the complexity of the problem, Congress devised the concept of
Regular Military Compensation (RMC) to make analyzing and discussing
military compensation easier. It consists of the three main cash items noted
earlier and the cash equivalent of the advantage of tax-free basic
allowances for housing and subsistence. But even RMC is inadequate as a
measure of the military compensation package's value because it doesn't take
into account the other in-kind or cash elements.
The General Accounting Office (GAO), in a 1975 study, pointed out that "lack
of visibility of pay among military members was widespread. [Even] RMC was
underestimated by 40 percent of enlisted personnel and 20 percent of
officers." The report went on to say that "[a] potential effect is that
personnel needed to satisfy military manpower requirements may opt for other
careers based on erroneous assessments of relative financial rewards. This,
in turn, could result in unnecessary increases in military pay in an effort
to aid attraction and retention programs." Nothing of substance has changed
since the GAO wrote its report.
Pay Gap?
In November 1996, the Navy Times printed a story with the alarmist lead,
"The gap between military and civilian pay could grow a half percentage
point, to 13.5 percent in 1998, unless Congress and the next administration
can agree on a plan for larger military raises." The story's author's own
reporting indicates only a fuzzy understanding of the difference between a
true pay gap and a pay-raise gap, terms he and others use interchangeably.
A pay gap would be the difference between the pay of a military person and
that of a civilian doing the same or comparable job. The DoD has never made
any serious effort to make such comparisons. A pay-raise gap is a gap
between the raises given to military people compared with those given to
civilian workers.
On its Web site, the Retired Officers Association (TROA) has a table
purportedly "track[ing] the growth of the military pay gap by comparing
military raises with wage growth in the private sector," as expressed in the
Employment Cost Index (ECI). TROA goes on to say that "[f]or budget reasons,
pay raises have been capped most years since 1982, when military pay was
last deemed OEreasonably comparable' with the private sector. The cumulative
pay gap widened to 13.5 percent by 1999, with serious retention and
readiness consequences."
On its face, this assertion sounds reasonable. But looking closer, you will
discover that between 1982 and 1999, according to the Bureau of Labor
Statistics, the overall ECI rose by 103 percent: 94 percent for wages and
salaries and 125 percent for benefits. Benefits include: paid leave, life
insurance, disability benefits, health benefits, retirement benefits, and
unemployment insurance. Military personnel pay for none of these. Perhaps
the reason the cash portion of their pay didn't keep pace with the overall
ECI is that servicemembers didn't need it.
Even for the lowest grades, the problem isn't nearly what many people would
have you believe. Comparing RMC (not counting most allowances and in-kind
benefits) for enlisted personnel in the first four pay grades, stationed in
San Diego, compensation ranges from $1,852 for an E-1 without any dependents
to $2,249 for an E-4 with dependents, a pay grade military recruits advance
to within 18-24 months. That means between $22,000 and $27,000 a year for
men and women--almost all under 20 years old--just beginning their careers.
Moreover, with constant pay raises built into the system, military poverty,
to the extent it even exists, shouldn't last long. A bigger paycheck is
always guaranteed for next year. Although at the lowest enlisted grades
frugality might be required, the picture is hardly one of grim destitution.
The Food Stamp Legend
As to food stamps, the situation is even more complicated considering that
the Department of Agriculture uses two main criteria to determine
eligibility for food stamps: income and family size. If your income is below
a certain level, you qualify. In the military, cash given to those who live
off base is counted as part of one's income in determining food stamp
eligibility. Actual housing provided by the military (whether on or off
base) is not counted, however. Thus, if a servicemember has a low income
(i.e., is low in rank), lives in military housing, has an unemployed spouse,
and has a large family, it's quite possible she or he will qualify for food
stamps. Even those who live off base and receive the cash housing allowance
might qualify with a big enough family.
The reason there are servicemembers on food stamps, then, can be traced for
the most part to the size of some military families. The Air Force's senior
enlistee--Chief Master Sergeant of the Air Force Eric Benken--recognized
this years ago. According to a March 1997 issue of Air Force Times, he
didn't "see the fact that some airmen qualify for food stamps as proof there
is something wrong with military pay scales. Instead, it is a sign that
young people with low incomes are starting families before they can afford
it." A month later, Navy Times carried an interview with Fred Pang, then
assistant defense secretary for force management. Pang said he didn't "want
to appear insensitive . . .[but] the Pentagon's analysis shows the reason
service members qualify for food stamps is family size, not income."
Secretary of Defense William Cohen, trying to explain the food stamps
situation, told journalists in April 2000 that the problem "really has to do
with young people who are coming in who have a large family." Facts,
however, don't seem to have changed the popular misconception, as evidenced
by the large number of active-duty and retired personnel (and their spouses)
who routinely condemn Congress for the fact that military people are
receiving food stamps. A trip to the chat rooms and discussion boards of
Military.com or the letters-to-the-editor of Army, Navy, Marine Corps, and
Air Force Times bear this out.
The Roots of the Problem
I entered the military in June 1971. At that time, enlistees couldn't marry
unless they were at pay grade E-5 (approximately four years' service) and
had their commanding officer's approval. This practice at least prevented
the problem of destitute families headed by young enlistees.
At no time during the ensuing nine years I was in uniform, however, did I
read any official directives--and seldom did I hear any caution from
superiors--about spending within one's limits or prematurely taking on
family responsibilities before one was ready. Any admonitions or guidance
came after an individual had gotten in over his head. It's not that
servicemembers were encouraged to go out and immediately spend their whole
paychecks or to get married. They just weren't cautioned against doing so, a
problem that remains today.
Even when the services try to tackle this problem, they are shot down by
their civilian overseers. On August 11, 1993, the Marine Corps announced it
no longer would permit married persons to enlist. A few hours later,
however, the service renounced the planned policy, apparently after a
protest by President Clinton. Typical of overreactions was that of then-Rep.
Patricia Schroeder, who was a member of the House Armed Services Committee.
She "accused [Marine Corps Commandant, General Carl E.] Mundy of being an
anti-family 'neanderthal' . . .. Rather than reducing the number of military
families, Schroeder urged more funding for family programs," according to a
January 1995 commentary in Navy Times.
Schroeder, like most in Congress who never served in the military, didn't
understand that her proposal was precisely the wrong one. It doesn't take
Milton Friedman to figure out that paying more to people who marry than to
those who don't encourages marriage. Similarly, we don't need Dr. Joyce
Brothers to tell us that marriages entered into primarily for financial
reward are unlikely to last. A 1997 study bears this out. David W. Flueck
and Jeffrey S. Zax, economists at the University of Colorado at Boulder,
concluded that the additional benefits that come with marriages to
servicemembers "may S encourage them, perhaps excessively." They also
conclude that "[M]ilitary marriage subsidies cause higher rates of marriage
and lower quality marriages" and that "there is no compelling rationale for
subsidizing marriages among 18- and 19-year-old servicepeople, especially
when many of them will not re-enlist."
Going Overboard
Not only are ill-advised marriages tacitly encouraged, servicemembers are
surrounded by messages telling them to spend what money they have on
material goods that even exceed those civilians are exposed to. The base
exchanges sell state-of-the-art electronic equipment, jewelry, CDs, watches,
mobile phones, and the latest fashions in clothes for a fraction of what
they're available for off base.
Even slick new cars are within the reach of junior enlistees, given their
steady pay and predictable raises. And unscrupulous car dealers--many within
easy walking distance of the base gates--are more than happy to indulge
them.
Those who get into financial trouble are most often young people away from
home for the first time, earning more than ever before. It's no wonder so
many of the barracks-bound live from paycheck to paycheck, going on spending
binges immediately after payday, then living on mess hall food and the free
on-base recreation for two weeks until the cycle repeats itself. Similarly,
it's no wonder junior enlistees living off-base with families find
themselves cash-strapped most of the time.
We shouldn't be surprised, then, that they think they can afford everything
the culture tells them they should have if they want to be part of the
middle class, given the absence of countervailing messages from those around
them. Indeed, officers and senior enlistees even today survey this situation
with a smug sailors-will-be-sailors attitude, as if that were just the way
the world works.
The Devil's in the Details
Proposing military pay raises and subsidies for members with large families
is all very nice and politically correct but are the president's plans to do
so wise? Why is a Republican administration--the cheerleader for
privatization--putting a dime into building, refurbishing, or maintaining
housing when Republicans constantly tell us the private sector does such
things so much better than government does? And just what is an
"across-the-board pay raise for members of the military"?
Let's focus on this proposed pay raise. Cash counted in Regular Military
Compensation comes in three flavors: basic pay, basic allowances for
housing, and basic allowances for subsistence, the latter two of which are
not taxed. When Congress enacts a "pay raise," the president may apply it to
any or all of these three components.
Consequently, a "pay raise" evenly distributed among the three components is
better for junior personnel, because basic pay (which is taxed) increases
greatly with pay grade, but the housing allowance (untaxed) increases much
less from pay grade to pay grade and the subsistence allowance (also
untaxed) is the same regardless of pay grade. That is, a greater proportion
of a junior enlistee's total pay is untaxed than that of more senior
personnel. No one in the new administration is telling us how the planned
"pay raise" will be allocated among these three components, and no one in
the media is asking.
It's all well and good to be incensed about thousands of servicemembers
being on food stamps--if it's true. But we have no indication it is. DoD's
last estimate was that 5,100 servicemembers receive food stamps, but they
have never done a serious study, and the number they cite changes
constantly. Plus, the number is usually cited without mentioning that every
single person who may actually be on food stamps, is also in line for a pay
raise and therefore isn't likely to stay on food stamps for long.
Moreover, the current compensation system already pays married personnel
more than it pays singles. If pay increases by a certain percent so that a
tiny number of military personnel receive more money, in large part because
they've chosen to have large families, even greater disparities will exist
between personnel of the same pay grade and seniority. Married personnel
will receive more than singles, and those with larger families will be paid
more than married personnel without large families.
Sadly, Republican legislators, in the last session of the 106th Congress,
have decided to exacerbate the existing tendency in this direction in
military compensation by offering a provision that would give up to $500 in
additional cash per month to families qualifying for food stamps. In an
effort to make political hay in an election year, their scheme increases
existing disparities by skewing the system even more in favor of married
servicemembers with large families. That won't be helpful. What we need is
military leaders who, through command-level instruction and counseling,
promote responsible behavior in their subordinates with respect to money and
marriage. We also need a completely new and easily comprehensible system.
Otherwise, current perceptions that servicemembers live on the brink of
poverty--held by members of Congress, lobbyists, and servicemembers
themselves--will persist.
Only when we've tackled both individual attitudes and behaviors as well as
systemic problems will the myth of military poverty be put to rest.
A former Coast Guard officer, Andrew Webb is a freelance writer in San
Diego.