Advertisement

You will be redirected to the page you want to view in  seconds.

How do your pay raises stack up vs. inflation?

Over past 5 years, your buying was strong - but will that last?

Feb. 20, 2013 - 04:11PM   |   Last Updated: Feb. 20, 2013 - 04:11PM  |  
  • Filed Under

If the Pentagon gets its way, your basic pay will increase only 1 percent next year, which would be the smallest across the board pay raise in at least 40 years.

After a decade of robust annual pay bumps that outpaced private-sector wage growth, and several more in which military pay raises at least matched the private sector, defense officials now are pushing hard to cut back on military pay. If Congress doesn't go along and simply follows current law, the 2014 raise would be about 1.8 percent.

But whether next year's raise is 1 percent or 1.8 percent, an equally important question is: Has military pay been keeping pace with the cost of the things you want to buy?

That question can become obscured because, unlike annual cost-of-living adjustments in retired pay designed to maintain the purchasing power of military retirees against inflation, basic pay raises are based on private-sector wage growth because the services need to remain competitive with the civilian job market to recruit and retain a quality force.

So what do the data show when you stack up military raises against the inflation rate over that span? Military Times took a close look, using inflation rates for various types of goods and services as tracked by the Labor Department's Bureau of Labor Statistics.

The data show that the overall increase in military basic pay from 2007 to 2012 — 14.6 percent — outpaces the inflation rate in many of the categories tracked by BLS. In other words, troops' buying power increased relative to those categories; it's cheaper today for those in uniform to buy shoes, alcohol, cars, fruit and vegetables.

But basic pay is not keeping up with cost growth in goods and services, such as candy and sweets, meat and poultry, education and eating at restaurants.

And you're especially out of luck if you're a smoker — tobacco prices have soared compared to military pay, mainly because of tax hikes in many states.

But feel free to hit your local Best Buy on the way home from work — the comparative cost of music and videos has dropped since 2007.

More In Pay & Benefits

Start your day with a roundup of top defense news.

VA Home Loan
Rates

Search By:

Product Options:
Zip Code:

News for your in-box

Sign up now for free Military Times E-Reports. Choose from Money and Education. Subscribers: log in for premium e-newsletters.


This Week's Navy Times

This Week's Navy Times

The education edge
Sailors with higher ed. degrees advance faster, data show

Subscribe for Print or Digital delivery today!

Classifieds
MilitaryTimes Green Trusted Classifieds Looking to buy, sell and connect on Military Times?
Browse expanded listings across hundreds of military installations.
Faces of valorHonoring those who fought and died in Operations Iraqi Freedom and Enduring Freedom.
hall of valorThe Hall of Valor is a searchable database of valor award citations collected by Doug Sterner, a Vietnam veteran and Military Times contributing editor, and by Military Times staff.
Woman who cried rape
(3 replies)
   Last Post: TJMAC77SP
        May 3, 2014 1:32 PM
   Last Post: garhkal
        May 1, 2014 5:03 PM
Cliven Bundy
(45 replies)
   Last Post: Chief_KO
        Apr 26, 2014 9:49 AM
Handbooks

All you need to know about your military benefits.

Benefits handbook

Guard & Reserve All you need to know about the Guard & Reserve.

guard and reserve handbook