Understanding Trump's 2019 NDAA Military Pay Increases

Yesterday, standing on a podium between new Apache and Black Hawk helicopters and soldiers from the 10th Mountain Division at Fort Drum, President Donald Trump signed the 2019 National Defense Authorization Act. This marks the earliest in the year that this annual bill, which was first passed in 1961, has been signed since 1978.

The newest iteration of the NDAA, which lays the groundwork for how military spending will be arranged and budgeted for the upcoming fiscal year, allocates $717 billion to be spent on a variety of military improvements. President Trump touted a number of these advancements to an adoring crowd, citing how the bill will allow for the addition of 15,600 new armed forces members, as well as the replacement of “aging” equipment. In fact, the bill calls for 77 new F-35 Lightning II stealth fighters, 13 new battleships of varying models, and a broad collection of planes, helicopters, and other military vehicles and pieces of equipment.

The NDAA also authorizes over $6 billion for overseas military actions in Afghanistan and Iraq. However, among these countless advancements and specific allocations of funds, perhaps the most visible to the general public is the allotted 2.6 percent increase in the salaries of our military members. This provision of the 2019 NDAA brings up an interesting question that many members of the community are still confused about – how exactly does military pay work?

Many citizens may be wondering if this salary increase is warranted amongst the debates over minimum wages and poverty currently swirling around the nation. To understand this, however, one must first grasp exactly how our service men and women are compensated -- beginning with the fact that salary increases are set by a statutory formula based on the previous year's Employment Cost Index (ECI). This ensures that military salaries keep pace with those of the private sector. So that's the legal reality, one that must be dealt with by anyone seeking to argue current military compensation is too high. 

So how do current military salaries compare to the private sector right now? It's a complex question. 

According to the U.S. Army, base pay for an E1 Private with under two years of experience is a salary of $19,659.60 based on the 2018 pay scale. Compensation increases steadily as soldiers rise through the ranks and accrue more years on the job, with the salary for a Staff Sergeant with six years experience sitting at just over $38,000 on the 2018 pay scales. As expected, officers such as Lieutenants and Majors make more than active duty soldiers, with the base pay again increasing with rank and experience.

However, these numbers are not even close to the whole story. These numbers do not include “allowances” for things like housing and food, which change based on how many dependents the soldier or officer is supporting. In addition, service members can earn significant bonuses for different skills and responsibilities, with extra money for everything from culinary experience to fluency in multiple languages. Finally, military members in all branches are eligible for health benefits both during and after their tenure (although VA medical care and benefits have fallen under significant scrutiny).

Once the basic structure of military pay is understood, the next level is to compare that to the total compensation (and additional costs) of similar jobs in the civilian sector.  

While the military is not exactly clear as to the compensation scales of many available technical jobs, multiple reports place average salaries for positions like Army Cyber Network Defender at about $60,000. With the average salary for a civilian technical security specialist sitting at over $70,000 according to some reports, the base pay for working in the armed forces does appear to be lower.

However, once one considers the additional benefits and possible bonuses that come with the military job, as well as the potential of filing taxes in one of the 33 states that have special provisions for taxing military income less (or in some cases not at all), the gap is more than bridged. Jobs like these require college degrees in both cases, but when all is considered, it seems that the military compensation is already more than sufficient. This is the position of many Americans, including those who gathered in a square near Fort Drum to protest the President and the new NDAA.

There is one more matter to consider, however, when it comes to debating military salaries, and it is likely the biggest one – the risk-reward ratio. Inherent danger and increased responsibility exist in all armed forces positions, with about 35,000 soldiers being wounded or killed in the first six and a half years of Operation Iraqi Freedom. Even non-combat jobs such as those in the technical sector possess high levels of stress and a requirement for perfection, as perhaps nothing is more important to protect (and under more significant attack) than national security.

Freedom and mobility in military jobs are also sacrificed in comparison to civilian work, with some former military employees citing a desire for increased ability to choose their location, housing, and career direction as a reason for turning down what is, all things considered, likely a more lucrative compensation package. Finally, the increase allocated in the NDAA has to be taken with an understanding of the fact that the inflation rates in the United States have been generally increasing since the 2015 fiscal year, according to published reports from the U.S. Labor Department. That factors into the ECI and subsequent statutory formula that I mentioned earlier. 

So, are the men and women tasked with defending the United States of America deserving of the 2.6 percent pay increase? It depends who you ask. Regardless of what side of that argument you find yourself on though, it's clear that any changes to this status quo are deeply nested in American bureaucracy. 

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