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Underpaid Soldiers?

By Jonathan Chait
Posted Thursday, May 6, 1999, at 3:30 AM ET

To justify a new increase in military pay, the Pentagon and legislators are citing a 13 percent "pay gap" between the salaries of servicemen and their civilian counterparts. Ignoring for a moment whether a dramatic increase in military pay is needed, the 13 percent figure is bogus. Even though the Congressional Budget Office debunked the statistic in March, several military representatives continue to cite it in congressional testimony.

The 13 percent "pay gap" represents the difference in the growth of military versus civilian wages since 1982--that is, civilian wages have grown 13 percent faster. This does not mean that soldiers earn less than civilians, because it does not take into account the pay differential from 1982. If my wages have increased by 100 percent during the past five years while Bill Gates' have increased by nearly 50 percent, this does not mean that I am earning 50 percent more than Bill Gates, since he was making more to begin with.

Moreover, even as a measure of relative wage growth, the 13 percent figure fails. First, the 1982 starting point--as opposed to some other year--makes the gap look especially big, since there was a substantial military pay increase in 1981. Even worse, the comparison does not account for the fact that most members of the armed forces are younger and less educated than civilian workers. This is important because in recent years the wages of college-educated workers have grown much faster than the wages of high-school-educated workers. The better comparison would be between the wage growth of soldiers and civilians of comparable age and education.

So forget about 13 percent argument. Is there any pay gap? A rough study by the CBO found that enlisted service members earned higher wages than three-quarters of male civilian high-school graduates of the same age, and officers earn higher wages than three-quarters of college graduates of the same age. By that measure, soldiers earn more than their civilian counterparts. A RAND study has found essentially similar results.

Military service offers many advantages--self-improvement, adventure, travel, patriotism, the esteem of one's countrymen--as the services tout. It also has severe disadvantages, such as long hours, harsh discipline, isolation from loved ones, and the risk of injury or death. It may be a good idea to attract better soldiers, sailors, and airmen with huge salary increases, but military service is so different from civilian work that most wage comparisons are extremely suspect.

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Jonathan Chait is a fellow at the New America Foundation.
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