The latest data informing military pay raises points to one of the smaller hikes this decade.

The June Employment Cost Index (ECI) for wages and salaries in private industry, released last month, stood at 3.5%, one-tenth of a percentage point higher than the March figure but six-tenths lower than the June 2024 number. Congress regularly uses this measurement of employment cost change to set the military pay raise – figures from September’s ECI, which will be released in October, will inform the 2027 military pay hike.

If trends continue, it would mark the lowest raise since 2022 (2.7%). It would come after a 3.8% raise set for 2026, barring an unexpected change in this year’s National Defense Authorization Act (NDAA) process – both House and Senate NDAA versions use that figure, making it likely to reach the final bill.

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MOAA and Military Pay

MOAA has worked with lawmakers to ensure the ECI figures inform the annual military pay raise, helping to keep military compensation in line with the private sector. Without this index, the all-volunteer force could undervalue its current and prospective members, which would threaten recent recruiting successes and put retention at risk.

But our work has stretched beyond ECI – MOAA backed a targeted 10% raise for junior members in the FY 2025 NDAA on top of the 4.5% raise received by all in uniform. This generational fix to the pay table provided these servicemembers and their families with additional resources to face mounting financial challenges triggered by high rental costs near some installations, skyrocketing child care fees, spouse employment difficulties, and other service-specific factors.

We will continue to work with members of Congress – including the House Armed Services Committee’s Quality of Life panel, which spearheaded the junior enlisted raise among other improvements – to maintain pay parity with the private sector, but the first step is preserving the ECI connection as a baseline. Without it, we risk repeating the lower-than-projected raises faced by servicemembers from 2014 to 2016.

Military compensation trailed the ECI by at least eight-tenths of a percentage point in each of those three years, resulting in a pay gap that’s never been closed and will affect servicemembers throughout their careers and into retirement.

While the FY 2026 NDAA process includes the ECI figure, there’s no guarantee that future Congresses, facing increasing budget pressures, will do the same. That’s why MOAA continues to track the issue, and why it’s critical for members (and others) to register at our Legislative Action Center, where you’ll be able to interact with your lawmakers on this and other key MOAA priorities.