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Report says military and private sector pay are not apples to apples

By Alyssa Rosenberg April 2, 2010 on Government

A comparison between military pay and private sector compensation is difficult because of the special benefits and risks of a career in the armed forces, according to a new report from the Government Accountability Office.

“Military service is unique in that the working conditions for active-duty service carry the risk of death and injury during wartime and the potential for frequent, long deployments, unlike most civilian jobs,” the report said.

In terms of cash compensation, GAO reported many assessments determined military pay to be fairly competitive with civilian wages. The 2008 Quadrennial Review of Military Compensation found that salarywise, service members made more money than 80 percent of comparable civilians, up from 70 percent in the 2004 review. A Defense Department-sponsored study by CNA Corp. in 2006 found enlisted service members made an average $4,700 more than the civilians the company included in the study, and that on average officers made $11,500 more.

When CNA added the value of health insurance, retirement benefits and tax breaks to their calculation, the differences between average military and civilian pay rose to $13,360 for enlisted personnel and $24,870 for officers. But GAO said calculating the value of the full range of benefits available to service members, including the use of commissaries for grocery shopping, various bonus and incentive payments, and benefits such as burial expenses was complicated and could shift easily. The report said, however, that Defense should try to come up with an accurate assessment of the full value of those benefits to use as a recruiting tool.

GAO emphasized it is extremely difficult to identify which occupations are truly comparable to military service. It is not sufficient, the watchdog said, to compare service members’ salaries to those of law enforcement officers, who face similar risks on the job, because the military serves so many functions and includes various occupations.

And the report noted the military faces a special challenge when it comes to recruiting. In comparison to private sector employers that can bring in new talent at almost any age and level, the armed services need to recruit people who will spend their entire careers in the military gaining the skills necessary to become generals and colonels. As a result, their compensation strategies must be based on what will persuade recruits to make a long-term commitment to the military.

“Unlike nearly all other organizations, the uniformed services have closed personnel systems,” said the report. “By contrast, most other organizations can and do hire from the outside at all levels. Thus, the failure to meet recruiting or retention goals at lower levels in a given year can have significant consequences for a service’s ability to produce experienced leaders for years to come.”