How do your pay raises stack up vs. inflation? - Navy News | News from Afghanistan & Iraq - Navy Times

How do your pay raises stack up vs. inflation?

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.