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Home | Blog | US Soldiers Are Paid Significantly More than Civilians with Similar Skills and Education

US Soldiers Are Paid Significantly More than Civilians with Similar Skills and Education

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10/29/2015
For years, Americans have been often exposed to a persistent myth that American military personnel are shamefully underpaid and generally taken for granted. Troops are "forced to rely on welfare, holiday charity" according to one Washington Times headline. News outlets frequently report on  how many troops are on food stamps

The problem with articles and back-of-the-envelope analyses like these are that they don't compare the troop's current income to what he would be likely to earn were he working in the private sector. It is often assumed that American military personnel are giving something up by working for US government within the Department of Defense. 

However, studies have shown that military personnel tend to earn more as members of the military than their counterparts in the private sector of similar age and education level. In other words, an enlisted soldier with no college education earns more in the military than someone of similar age and similar education in the private sector.  It is entirely plausible that those soldiers who "rely on welfare," would be at least as reliant on welfare were they relying on their meager skills and education in the private sector. 

In this report on military compensation, the Congressional Budget Office concluded:
With cash allowances and federal tax advantages included, regular military compensation for the average enlisted member exceeded the 75th percentile of civilian earnings. For several years, DoD has stated that its aim is to make RMC [Regular Military Compensation] comparable with the 70th percentile of civilian earnings. CBO’s analysis suggests that the goal has been achieved.
 
Americans have a tendency of thinking of their incomes solely in terms of the number on their paychecks, but when all compensation and benefits are considered, the CBO reminds us, the picture is rather different. After all, military personnel have access to a variety of non-cash benefits. The DoD concludes:
Benefits provided to service members are substantially more valuable than those provided to civilians with comparable education and experience, meaning that total compensation for service members is more generous relative to civilian compensation than the traditional comparison of cash pays would suggest.
In fact, the DoD reports military compensation is even more generous than thought when we look beyond Regular Military Compensation (RMC):
Military Annual Compensation package for both enlisted personnel and officers compares to approximately the 80th percentile of compensation for civilians, as compared to the 70th percentile when using only RMC as the point of comparison...
In fact, the average enlisted member earned approximately $5,400 more in 2006 than his or her civilian counterpart when comparing cash compensation, but $10,600 more when selected benefits are included in the comparison. The typical officer received an average of $6,000 more than civilians with comparable education and experience based on traditional cash comparisons, but $17,800 more with benefits included.
But that was in 2007. Since then, military pay has outpaced civilian work even more:
DoD recently updated that analysis, finding that average RMC in 2009 had risen relative to the civilian wage distribution. The average RMC for enlisted personnel reached the 90th percentile relative to the combined comparison group consisting of civilians with high school diplomas, those with some college, and those with two-year degrees; the average RMC for officers reached the 83rd percentile relative to the combined group of civilians with bachelor’s degrees and those with a master’s degree or higher.
Moreover, military pay increases have grown faster than civilian pay increases over the past decades: 
[B]y 2005, out-of-pocket expenses for the average military family had been eliminated. DoD reports that, as a result of those and other actions between January 2002 and January 2010, basic pay for the average service member increased by 42 percent (in nominal dollars), housing allowances increased by 83 percent, and the subsistence allowance increased by 40 percent. CBO estimates that cash compensation increased by 52 percent overall during that period, whereas private-sector wages and salaries rose by 24 percent.
According to the CBO, the median enlisted member is a single 22-year-old male in the E-4 pay grade (a corporal or specialist). The CBO found that the median soldier 
received a total compensation package worth about $70,450. Of that amount, 54 percent was in cash — basic pay, allowances for food and housing, and the tax advantage that military personnel receive because those allowances are not subject to federal income taxes. The rest of that member’s compensation took the form of noncash or deferred benefits. About 8 percent of his or her total compensation consisted of subsidized goods and services that could be used immediately, such as medical care or groceries purchased at commissaries. The other 38 percent of total compensation was the accrued cost of retirement annuities and other deferred benefits that the member may receive after he or she leaves active duty, including health care for retirees and veterans’ benefits.
As we can see, the non-cash benefits enjoyed by military personnel are extensive, and appear to be well above that commonly attached to the sorts of jobs available to workers of similar age and educational background. The CBO's median soldier has under five years' experience, so consider, for example, that the median annual wage for a construction worker is $31,000, and for clerical work, the median pay is $29,000.  These jobs typically do not come with anything resembling the non-cash benefits enjoyed by military employees.
 
Only a Fraction of Military Personnel Are Involved in Combat
 
But perhaps the high pay comes as compensation for the fact that soldiering can be hazardous work.
 
Those who are unfamiliar with the make up of the military perhaps imagine that the majority of enlisted soldiers are in combat zones facing hostile fighters. In fact, according to this study, only 17 percent of the 1.5 million active duty soldiers in 2011 were in "combat roles."  Today, in the absence of any military operations on a scale of the Iraq war, the number of soldiers who are in combat situations is much less than it was in 2011. 
 
Most soldiers, as those who have worked in the military are well aware, are in "support" roles that often occur far from any battlefield. These jobs include logistics, human resources, public relations — and nowadays — making sure that the military includes a sufficient number of transgender personnel
 
This isn't to say there aren't a large number of US military personnel in dangerous parts of the world. There are  thousands of US troops in Afghanistan, for example. But being deployed to a dangerous part of the world is not the same thing as being an infantryman or para-rescue soldier who specializes in combat situations.
 
In his extensive study on the ratio between combat and support personnel, John J. McGrath found that the ratio of combat personnel to service personnel has declined over time:
Since World War II; the ratio of U.S. combat troops to combat service support and support has gone from 4 support soldiers to 1 infantryman to 7 support soldiers to 1 infantryman in Iraq and Afghanistan...
 
There are many possible reasons for this decline. Perhaps the nature of warfare and technology has changed to the extent that lesser combat troops are needed. The large-scale introduction of civilian contractors into expeditionary warfare in the recent Iraq deployment is the most significant of such changes. Increased technology, primarily in the form of digital communications, provides, possibly, higher levels of command and control and situational awareness, allowing for decreased combat forces. Perhaps different types of operations require lower levels of combat troops or more specialized forces. However, as the percentage of combat troops deployed declines, it raises the question of whether such a deployment is, in fact, a military deployment at all, or some other type of operation not requiring military forces, or at least not the general purpose forces traditionally used in most overseas deployments. [emphasis added]
This dichotomy has been accentuated by the fact that some military personnel rarely deploy. In this 2010 graphic, the Defense Business Board noted that the military had the habit of deploying some soldiers multiple times while not deploying others at all. At the time of publication, 40 percent of active duty members had never deployed. Meanwhile, the report noted, hundreds of thousands of military personnel perform "commercial activities" that are not inherently military or governmental and could easily be performed by civilian workers. Given that military personnel earn so much more than civilian workers, the report contended, the military could save money by outsourcing more of its non-military jobs to cheaper (i.e., non-military) labor.
 
 
 
Naturally, soldiers involved with deployed combat units face lopsidedly higher risks while non-combat soldiers, or never-deployed soldiers, face far lower risks. As one might expect, during the Iraq War years, when the Army had a central role in Iraq combat,  the Army endured far higher casualty rates than any other branch of the military. 
 
Furthermore, in today's voluntary military, service in combat positions — where one is likely to be shot at — often go to those who volunteer for such position, and, contrary to old myths, combat deaths today do not fall disproportionately on soldiers from racial minority groups or from low-income families. In fact, low-income and racial minority groups tend to join the military in search of practical job skills, and thus gravitate toward non-combat logistical and administrative roles. Combat jobs, on the other hand, tend to go to ideologically-motivated white people, many of whom are middle-class or higher.  
 
Comparing Fatality Rates for Soldiering with Other Jobs
 
Over the past 35 years (as reported by the Defense Casualty Analysis System) rates of death due to so-called "hostile action" (i.e., combat deaths) have been very low if considered against accidental death rates in other professions. Combat death rates came in at zero most years of the 1990s. And even after the Afghanistan invasion in 2001, the combat death rate remained below the murder rate of the US population. The combat death rate was 1.0 per 100,000 in 2002 (the US murder rate is around 4.9 per 100,000). 
 
With the Invasion of Iraq, combat deaths surged and peaked at 52 per 100,000 in 2007. Of course, most of these risks were faced (at varying times, depending on rotations) by by the 17% of soldiers with combat specialties.
 
But, in order to make a better comparison with other lines of work, we must also include accidental death due to vehicle accidents, plane crashes, and so on. With accidents and on-the-job homicides (not to be confused with combat deaths) included, deaths peaked in 2007 at 90 per 100,000. A more typical rate is 50 per 100,000.
 
Even in the peak year, though, soldiering is still less risky than commercial fishing (with a fatality rate of approximately 120 per 100,000) and logging (with a fatality rate of approximately 100 per 100,000). Nevertheless, when all combat deaths are included during the Iraq War (2003-2011) soldiering does become a risky affair. These risks can then exceed other dangerous professions like ranching, farming, truck driving, and other jobs that involve moving and working with large pieces of equipment and machinery, or working in dangerous physical environments, and which bring with them fatality rates ranging from 30 to 50 per 100,000.
 
Nevertheless, even if we consider these risks, a young person with little education is unlikely to find any position that pays better than the US military. Dangerous civilian positions like fishing, logging, and roofing all come with much lower levels of compensation than work in the armed forces. Most of these laborious civilian jobs pay median average salaries of approximately $35,000, and few of them come with health care, retirement, and housing allowances included. Additionally, if one can avoid the more hazardous jobs in the military, such as infantryman, ordnance disposal, or helicopter pilot, a soldier may face workplace risks well below many working-class civilian jobs in America. 
 
Risk to life and limb is distributed highly unevenly in the US military, but pay well above median civilian wages remain rather uniform in the armed forces. The picture of military personnel as struggling to survive at the hands of stingy members of Congress and taxpayers is based on little evidence. Members of the military, like government employees in general, enjoy far greater benefits than those with similar educational levels outside government.

Ryan McMaken (@ryanmcmaken) is the editor of Mises Wire and The Austrian. Send him your article submissions, but read article guidelines first. Ryan has degrees in economics and political science from the University of Colorado, and was the economist for the Colorado Division of Housing from 2009 to 2014. He is the author of Commie Cowboys: The Bourgeoisie and the Nation-State in the Western Genre.

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