Less than a month after a MOAA-backed targeted pay raise began providing much-needed financial support to junior enlisted servicemembers, a new figure shed some light on potential future pay increases.

And that light may not shine as bright as it has in previous years.

The March Employment Cost Index (ECI) for private industry wages and salaries, released April 30, sat at 3.4%, down three-tenths of a percentage point from the December figures and down nine-tenths of a point from the March 2024 number. That trend matters to those in uniform, as the third-quarter ECI, released in late October, will inform the 2027 military pay raise proposed by Congress.

While not codified in law, the figures have mirrored one another for nearly two decades except for a three-year decline from FY 2014 to FY 2016:

• ECI third quarter, 2008: 2.9%, informing a 3.4% military pay raise in the FY 2010 National Defense Authorization Act (NDAA).
• ECI Q3 2009: 1.4%, FY 2011 raise: 1.4%
• ECI Q3 2010: 1.6%, FY 2012 raise: 1.6%
• ECI Q3 2011: 1.7%, FY 2013 raise: 1.7%
• ECI Q3 2012: 1.8%, FY 2014 raise: 1.0%
• ECI Q3 2013: 1.8%, FY 2015 raise: 1.0%
• ECI Q3 2014: 2.3%, FY 2016 raise: 1.3%
• ECI Q3 2015: 2.1%, FY 2017 raise: 2.1%
• ECI Q3 2016: 2.4%, FY 2018 raise: 2.4%
• ECI Q3 2017: 2.6%, FY 2019 raise: 2.6%
• ECI Q3 2018: 3.1%, FY 2020 raise: 3.1%
• ECI Q3 2019: 3.0%, FY 2021 raise: 3.0%
• ECI Q3 2020: 2.7%, FY 2022 raise: 2.7%
• ECI Q3 2021: 4.6%, FY 2023 raise: 4.6%
• ECI Q3 2022: 5.2%, FY 2024 raise: 5.2%
• ECI Q3 2023: 4.5%, FY 2025 raise: 4.5% (does not include targeted increases)

The 3.8% figure from Q4 2024 is expected to be part of the FY 2026 NDAA, which is now being assembled on Capitol Hill. It would be the lowest raise since FY 2022, and the FY 2027 increase is trending lower yet.

Why MOAA Tracks ECI

Military compensation must keep pace with private-sector pay or the viability of the total force is put at risk. MOAA works with Congress each year during the NDAA process to ensure a range of quality-of-life improvements for those in uniform, chief among them a paycheck that provides security for servicemembers and their families.

[RELATED: What the Proposed $1 Trillion Defense Budget Means for Servicemembers, Families, and Retirees]

In some instances, as with the targeted pay raise that took effect in April, ECI doesn’t tell the whole story, and an increase beyond the index is necessary to provide for the all-volunteer force. But when compensation dips below ECI figures, as it did from 2014 to 2016 (bolded above), ripple effects from a pay gap continue for decades, especially for career servicemembers who retirement pay will suffer.

Protecting your earned benefits in both the short and long term remains MOAA’s core advocacy mission. We will continue tracking key indicators to ensure proposed increases match the needs of all who serve. Keep up with this issue and others on our legislative priority list by visiting our advocacy news page.