Pros and cons of military pay raises
President Joe Biden signed the National Defense Authorization Act (NDAA), ensuring military members receive a 4.6% pay increase in 2023. It's the most significant hike in two decades, and military members received their first increased paycheck on Jan. 13, 2023.
But will it be enough to support the troops in this uncertain economic environment? Can this step increase the U.S. military's chance of increasing the recruitment rate? Let's find out.
Two major pros of military pay raise
I believe there are two primary reasons why the government planned on increasing military pay: high inflation and low recruiting rate.
1. A fighting chance against inflation
The primary objective of this pay raise was to provide troops and their family members a fighting chance against inflation.
Inflation has come down heavily on America. The inflation report of 2022 found a staggering 24% surge in energy prices, the most substantial annual increase in forty years. This, coupled with an 11.4% spike in the cost of food products, has resulted in a profound financial strain on most Americans, including our esteemed active, guard, and reserve service members.
The inflation crisis has prompted military families to make tough decisions, such as prioritizing between food and gas.
A good number of them were already struggling with debt. According to a survey, 27% of service members had more than $10,000 in credit card debt.
Now add to that the high inflation and military families are exhausting their savings rapidly. Many increasingly rely on commissaries, while others seek assistance from food banks to meet their basic needs.
The pay raise initiative, therefore, comes as a timely solution to address the debilitating impact of inflation and enable military personnel and their families to maintain a decent standard of living.
By enabling them to get adequate resources, the pay raise initiative will offer much-needed relief and stability to military families as they navigate through these difficult times.
2. Possibility of improving recruitment
While the military is easily meeting its retention goals, recruiting new members has proven challenging. The Army, in particular, fell short of its active-duty soldier recruitment target by a staggering 15,000 personnel, or 25% of its objective in the last fiscal year.
This recruitment shortfall can be attributed to various factors, including the negative public perception of the military as a political pawn, apprehension regarding living conditions on military bases, and concerns over undesirable job assignments.
Additionally, the lower annual base pay for several military positions compared to their civilian and private sector equivalents further exacerbates these issues.
Service members aren't seeing the same growth in their annual pay compared to civilians in the private sector, making it even more attractive for talented individuals with specialized skills to pass over military service.
Considering these challenges, it was the right move to increase the base pay and align with the growing demands of the workforce.
By addressing the aforementioned issues and increasing base pay, the military can attract and retain top talent, ensuring the highest military readiness and effectiveness.
Cons of military pay raise
1. Military pay raise can put more strain on the federal budget
As the U.S. grapples with mounting debt and the threat of national bankruptcy, concerns are growing regarding the impact of increased military spending.
The nation has recently increased its debt ceiling to avoid defaulting. But this isn’t a sustainable way of dealing with debt. And if the government doesn't address its over-the-top spending, it'll soon face the risk of being unable to pay its bills, including military salaries.
2. The raise isn't enough
While the military pay raise for 2023 represents a step in the right direction, the 4.6% increase may not be sufficient to address the financial strain military service members face, particularly in light of the 8% inflation rate.
While a pay raise can help alleviate some of the concerns, it does not provide a comprehensive solution.
According to experts, the military pay raise must be part of a broader effort to create a more attractive benefits package for enlisted personnel to attract and retain the caliber of talent required to serve effectively.
The bottom line
While the military pay raise is a welcome development for service members, the government must tackle the national debt issue and curb the rising inflation to ensure its long-term sustainability.
Also, beyond pay increases, the Department of Defense must make the military career a more attractive option for talented individuals. Improving living conditions on military bases and addressing public perception issues are crucial steps toward achieving this goal.
More than simply boosting pay will be required in attracting and retaining the kind of personnel needed to serve.