Military Officer - December 2008 - (Page 32) washingtonscene Pay Raise Versus COLA History Retiree COLA and active duty pay raise percentages have never been the same in any year since the COLA system started in 1963. That’s because pay raises track civilian pay growth and COLAs track cost-of-living changes (prices). While we’ve had several-year stretches where one has exceeded the other, this 40-year history indicates the two tend to even out over time. Military Raise Retiree COLA Military Raise Retiree COLA 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 8.1 20.4* 14.4* 6 7.3 5.5 5 4.8 7 5.5 7 11.7 14.3 4 4 4 3 3 2 4.1 5.3 5.6 4.5 4.8 6.1 12.1 12.8 5.4 9.3 7.4 11.1 14.2 4.4 8.7 3.9 3.5 0 1.3 4.2 4 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 3.6 4.1 4.2 3.7 2.2 2.6 2.4 3 2.8 3.6 6.2 4.1 6.9 4.7 4.1 3.5 3.1 2.7 3.5 3.9 4.7 5.4 3.7 3 2.6 2.8 2.6 2.9 2.1 1.3 2.4 3.5 2.6 1.4 2.1 2.7 4.1 3.3 2.3 5.8 ensure that whatever purchasing power a servicemember’s retired pay represented on the date he or she left service isn’t eroded by inflation. Over time, the two tend to even out. During the 1970s, retiree COLAs were higher in five years and pay raises won out for the other five. In the 1980s, pay raises beat COLAs (6-4); in the ’90s, there was a 50-50 split (5-5). The first half of this decade, pay raises were higher, but with COLAs higher for three of the past four years, the pendulum seems to be swinging the other way again. Recruiting Improved But some problems remain. T * Most of the 1971-72 increases went toward large raises for first-term personnel, as draft-era low pay was raised to be comparable to private-sector pay for lower grades in the all-volunteer force. This is the third year of the last four that the retiree COLA has been higher than the pay raise for currently serving troops. The two are never the same because they are based on different things and have different purposes. Military pay raises are based on privatesector pay growth, as measured by the Bureau of Labor Statistics’ employment cost index. Their intent is to ensure military pay is kept reasonably comparable to privatesector pay, to allow the services to compete successfully for manpower over time. Retired pay COLAs track to inflation, as measured by the CPI. Their purpose is to 32 MILITARY OFFICER DECEMBER 2008 he Pentagon reported in October that all military services met or exceeded their overall recruiting goals for FY 2008 for both active and reserve components — gratifying news in a particularly challenging market. Pentagon leaders said the year’s recruiting effort was “probably the strongest recruiting year we’ve had overall, taking all elements into account, since fiscal year 2004.” The main recruiting concern is that the active Army missed its goal for high school graduates for the third year in a row and was forced to accept more non-graduates to meet its accession goal. Eighty-three percent of the Army’s enlistees for 2008 held a high school diploma — an improvement over last year’s 79 percent, but still short of the 90-percent standard. The other three active branches exceeded the goal, with the Air Force achieving 99-percent high school grads. Reserve components generally met the 90-percent high school diploma
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