Uniformed servicemembers should see a 4.5% pay increase in 2025 based on an economic indicator released Oct. 31 by the Bureau of Labor Statistics – but that rate, which would be the third-highest since 2002, is far from guaranteed.

MOAA tracks these figures as part of its work to ensure members of the uniformed services receive fair compensation for the sacrifices they and their families make. And while this raise would not be the “largest in decades,” as was the case in recent years, it could still be targeted by those seeking costs to cut as part of the ongoing budget debate.

The 4.5% figure reflects the September 2023 Employment Cost Index (ECI) for wages and salaries. By statute, the third quarter ECI should be used to set the pay hike for the uniformed services in the 2025 calendar year. But pay raises can be separated from the ECI figure by either Congress or the president, according to law.

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A decade ago, servicemember pay fell behind the ECI by a combined 2.6 percentage points over a three-year span (2014-2016). That created a gap between uniformed and civilian compensation that remains to this day – one MOAA continues to work to close.

The Data

Here’s a look at the raises in past years:

• ECI third quarter, 2008: 2.9%, informing a 3.4% military pay raise in the FY 2010 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%, Expected FY 2024 raise: 5.2% (pending NDAA)
• ECI Q3 2023: 4.5%, Expected FY 2025 raise: ??

Is It Enough?

A fair pay increase is not the only way to shore up end strength and maintain readiness, but it can be an immediate indication of the value placed on those who serve by lawmakers and the administration. That’s why MOAA believes it is critical to keep the raise at or above the ECI figure – otherwise, we put the all-volunteer force at further risk, as the small pool of talented recruits may seek other, more financially rewarding, opportunities in the private sector.

MOAA supports ongoing efforts to ensure the military pay chart reflects the needs of the services. We also will continue our work in other avenues to make service more attractive to potential recruits and to those already in uniform, to include:

• Restoring the Basic Allowance for Housing to 100% of local rental and utility costs. (Take Action)
• Supporting the overall financial health of military families by incentivizing business to hire from the untapped talent pool of military spouses. (Take Action)
• Protecting the value of the military health care benefit, to include opposing TRICARE for Life fees, fixing the young adult coverage gap to align with civilian plans, and ensuring a strong pharmacy network.

Keep up with MOAA’s work on these issues and others by subscribing to our weekly newsletter and visiting our Advocacy News page.