Pay, pay raises, pay allowances, pay charts - Marine Corps Times

Basic Pay

Basic pay, which is taxable, makes up the largest portion of most service members’ paychecks. In 2007, basic pay starts at $1,203.90 a month for enlisted people with less than four months of service. Pay theoretically tops out at $16,795.50 per month for four-star officers with 38 or more years of service under a new pay formula that took effect this year. But by law, officer pay is limited to Level II of the federal Executive Schedule, which sets pay rates for various government officials. In 2007, that cap limits maximum monthly military pay to $14,000.10.

Basic pay is determined by rank and length of service, and is set in law in a pay table. All service members get at least one raise each year that is approved by Congress. Service members also get automatic raises when they are promoted to a higher rank, as well as longevity raises for time in service within one rank. Longevity raises generally are given every two years.

The pay raise approved by Congress each year usually takes effect Jan. 1 and historically has applied to all ranks. But raises have varied by rank in some years. From 2000 through 2004, for example, the Defense Department departed from its traditional practice of one-size-fits-all pay raises and targeted varying increases to different ranks and years of service. The goal was to make the pay of midgrade and senior enlisted members and warrant officers more comparable to their private-sector peers with similar levels of education, job responsibility and experience.

For 2005 and 2006, the Pentagon and Congress reverted to traditional all-ranks raises, but targeted increases returned in 2007. All troops received a 2.2 percent raise on Jan. 1, but on April 1, additional raises — ranging from less than 1 percent to more than 8 percent — were given to many E-5s, E-6s, E-7s and warrant officers.

Another major change in the pay table took effect April 1, when new longevity raises were set for senior enlisted members, warrant officers and commissioned officers with more than 26 years of service, the point at which longevity raises previously ended.

The longevity raises, a key initiative of former Defense Secretary Donald Rumsfeld, were aimed at providing incentives for highly skilled senior people to remain in uniform longer, rather than taking their expertise and experience to the private sector.

No more targeted or longevity raises are planned because Pentagon personnel officials and White House budget officials believe pay levels are now adequate to keep experienced people in the ranks.

Annual pay raises for all ranks, which apply to basic pay and to drill pay, are designed to keep pace with overall salary increases in the private sector. The 2.2 percent raise that took effect Jan. 1 and the 3 percent raise proposed for Jan. 1, 2008, track with changes in the Employment Cost Index, a Labor Department measurement of private-sector wage growth, although Congress can approve raises that are higher or lower than the ECI if it chooses.

Setting military raises by precisely tracking the ECI prevents military pay from losing its competitiveness, but it does nothing to close a gap between military and private-sector pay that grew in the 1980s and 1990s when military raises lagged private-sector wage increases.

At one point in 1999, military wages were judged to be 13.5 percent behind the private sector, prompting Congress to order five years of military pay hikes that were greater than the annual increase in the ECI. But the combination of all-ranks and targeted raises since 1999 still has left a pay gap estimated to be about 4 percent.