An Analysis of Pay for Enlisted Personnel

RAND is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND ® is a registered trademark. RAND's publications do not necessarily reflect the opinions or policies of its research sponsors. All rights reserved. No part of this book may be reproduced in any form by any electronic or mechanical means (including photocopying, recording, or information storage and retrieval) without permission in writing from RAND. The RAND documented briefing series is a mechanism for timely, easy-to-read reporting of research that has been briefed to the client and possibly to other audiences. Although documented briefings have been formally reviewed, they are not expected to be comprehensive or definitive. In many cases, they represent interim work. iii PREFACE The research presented in this Documented Briefing grew out of two concerns: whether military compensation is adequate to enable the military services to meet their manpower requirements year in and year out, and the question of whether action to change military compensation is required now. These two strands of research consider not only long-term trends affecting the adequacy of military compensation, but also short-term circumstances. Further, since major military pay legislation was passed in 1999 and took effect in Fiscal Year 2000 (FY 00), there is a question of whether that pay action is sufficient to meet both short-term and long-term challenges in recruiting, retaining, and motivating personnel. And if it is not sufficient, what sort of actions should be taken? Given the breadth of the subject, this briefing draws upon the body of existing research on defense manpower and military compensation. However, the briefing also contains new material on military/civilian pay comparisons and first-cut predictions of the impact of the FY 00 compensation changes. Specifically, we examine how the pay of enlisted personnel compares to that of their civilian counterparts, how these comparisons have changed over time, how the FY 00 pay actions affect the comparisons, and how recruiting and retention have fared recently. The briefing also discusses the variety of policy options that might be considered. SUMMARY A major purpose of the 9th Quadrennial Review of Military Compensation is to determine whether the structure and level of military compensation remains adequate to meet the manning requirements of the military. Changes in civilian labor market opportunities may call the adequacy of military compensation into question. To address these issues, this briefing examines the compensation of active duty enlisted personnel …