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The Military Compensation Conundrum: Rising Costs, Declining Budgets, and a Stressed Force Caught in the Middle

Thursday, September 22, 2016

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/wp-content/uploads/2016/09/Defense-Military-Compensation-BPC.pdfNational security requirements should be the rationale for any major decisions impacting the U.S. military. Unfortunately, the Budget Control Act and sequestration are forcing civilian and military leaders to make critical decisions with limited regard for their national security implications. The effect on the military has been profound.

Driven by the need to meet budget targets set independently of strategic considerations, recent reductions in force size and underinvestment in training have combined to adversely impact military service members. Even though service members’ compensation has increased amid these cuts, the cumulative burden of budget reductions is causing a deterioration in their capability and well-being. A shrinking military, brought about by budget cuts, places an additional workload on the service members who remain. Additionally, current trends deter those who might be interested in joining the military, which further erodes the ability of the Defense Department to execute its national security mission.

In order to attract and retain high-quality personnel for an all-volunteer force, those who choose to serve must be compensated at a higher level than in a conscript military. Over the last 15 years, Congress and the DOD have made commendable progress in achieving compensation parity with the private sector, but additional troubling indicators of service-member dissatisfaction have not been addressed adequately.

A shrinking military, brought about by budget cuts, places an additional workload on the service members who remain.

Our analysis of DOD data indicates flat overall service-member satisfaction even as compensation rises. This disconnect between pay and satisfaction suggests that compensation is only one component that factors into service members’ overall satisfaction with military life—and their decision to continue serving or recommend it to others. After a certain point, the desire for additional compensation is outweighed by underlying concerns with the military lifestyle.

Evidence examined in this paper suggests non-compensation aspects of personnel policy—such as the number of deployments (operational tempo), influence over future assignments, predictability of activities that take the service member away from home, and viability of spousal employment—play an important role in determining the well-being and, by extension, readiness of the force, but have been overlooked in recent years. Service members who are dissatisfied with the conditions of military service are more likely to leave, negatively impacting retention efforts, which directly degrades military effectiveness.

Unfortunately, as we show in the report, cuts in the military’s personnel end-strength, and to some degree readiness and training, are undermining morale and making it much harder to sustain the force at high levels of quality and effectiveness. Without a broader review of how current DOD policies and budget decisions impact the well-being of service members, the United States risks creating the conditions for a dissatisfied and hollow force with lower morale, declining retention, and diminished recruiting all driving decreased military effectiveness.

Policymakers should not consider military personnel as a budget line-item that can be cut without strategic consequences or retained through only monetary means.

Our duty to those who choose to serve and protect our nation cannot be discharged solely by paying them ever more. Policymakers should not consider military personnel as a budget line-item that can be cut without strategic consequences or retained through only monetary means. A more comprehensive approach to military personnel, which understands the relationship of their well-being to our national security, is required.

The Task Force on Defense Personnel next year will make recommendations to address these underlying concerns and help strengthen the military as it prepares to confront a complex and unpredictable future.

KEYWORDS: BUDGET CONTROL ACT OF 2011, DEPARTMENT OF DEFENSE, TASK FORCE ON DEFENSE PERSONNEL

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