This Key Military Pay Indicator Is Bouncing Back. But Will It Matter?

This Key Military Pay Indicator Is Bouncing Back. But Will It Matter?
Soldiers keep watch on targets during a joint combat live-fire event at Bemowo Piskie Training Area, Poland, on Feb. 2. (Photo by Staff Sgt. Elizabeth O. Bryson/Army)

The Employment Cost Index (ECI) for private-sector wages and salaries, a metric that guides future military pay raises, ticked up slightly in the first quarter of this calendar year – good news for servicemembers, but not a guarantee.

 

The quarterly ECI of 2.8% was up from the 2.7% reported Oct. 30, 2020. That October figure is used yearly as a guideline in setting the military pay raise – the 2020 figure, for example, should offer a hint at the FY 2022 raise. And while the October number was down from 2018 and 2019 figures, it would still represent the third-largest raise in the last 12 years.

 

The 2.8% figure released in January sets a good trend for servicemembers, who could see future raises in line with a growing index. But those pay hikes aren’t set in stone … and that’s a major reason why fighting for military pay raises remains a key MOAA advocacy mission.

 

[RELATED: Here Are MOAA’s Priorities for the 117th Congress]

 

While the military pay raise has reflected ECI in every National Defense Authorization Act (NDAA) since the fiscal year 2017 version, there is no rule that Congress or the administration must tie proposals or the final raise to that figure. One doesn’t have to look far into the rearview to see the administration ignored this guidance in the following NDAAs:

  • ECI Q3 FY 2012: 1.8%, FY 2014 raise: 1.0%
  • ECI Q3 FY 2013: 1.8%, FY 2015 raise: 1.0%
  • ECI Q3 FY 2014: 2.3%, FY 2016 raise: 1.3%

 

Fiscal pressures could lead elected officials to seek savings in many corners of the budget. And while these figures may seem small to those outside the uniformed services community, MOAA and other groups are well aware of the damage undercutting military pay can do to those in uniform – not just meeting short-term financial obligations, but suffering from thousands in lost retirement funds as pay cuts ripple into the future.

 

[RELATED: MOAA’s COLA Watch]

 

MOAA tracks these figures and others to ensure budgets are not balanced on the backs of the military community. But because ECI is a guideline, not a requirement, it’s even more vital for MOAA to remain engaged with lawmakers to ensure military pay keeps pace with the private sector and remains an incentive to recruit and retain those who make up the all-volunteer force.

 

Help MOAA maintain its voice by remaining engaged with ongoing advocacy efforts, and consider joining or upgrading today to add your voice.

 

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About the Author

Kevin Lilley
Kevin Lilley

Lilley serves as MOAA's digital content manager. His duties include producing, editing, and managing content for a variety of platforms, with a concentration on The MOAA Newsletter and MOAA.org. Follow him on Twitter: @KRLilley