During and after the Revolutionary War, the Continental Congress passed the first rudimentary laws regarding service pensions, which were administered by individual states. As the nation grew, the federal government developed and authorized the first major pension plan for Revolutionary War veterans and their families.
Since that plan's early framework, modifications to and debates over the military compensation system have continued.
In 1848, Congress approved life pensions for widows of Revolutionary War veterans married before 1800. In 1861, 13 years after Congress proposed initiatives for Revolutionary War veterans, the Civil War began. Both Confederate and Union soldiers were to be paid at the end of every month, but the pay schedule depended on how quickly the postmaster traveled. Army monthly pay for Confederate privates was $11 and $13 for Union privates.
Efforts to increase military pay along with inflation have started in 1917 when Congress passed legislation for a 100-percent pay raise for privates based on the minimum standard of living at the time. Historically, military pay depended on many factors and conditions. During the depression in the 1930s, President Franklin D. Roosevelt cut military pay by 15 percent as part of a plan to reduce federal spending.
After World War II, Congress authorized the Hook Commission to assess military compensation, leading to the Compensation Act of 1949. The act became the first major legislation in 40 years to dramatically change the military compensation system, increasing military pay 18.8 percent and matching the average for industrial wages. The act also introduced criteria based on rank, the amount of time served, special rewards, incentives, bonuses and reimbursements.
During the Cold War, from 1945 to 1991, the nation maintained a standing military (full-time career soldiers). The draft, however, ended in 1973, after the United States withdrew from Vietnam. This prompted Congress in the early 1980s to pass two pay increases, a total of 25 percent. Incentives were implemented to recruit, retain and produce a quality all-volunteer force. Whether it was a time of peace or war, the nation's all-volunteer force needed to consist of qualified personnel ready for action at a moment's notice.
Historically, military pay raises coincided with wage earnings in the private sector. The Bureau of Labor Statistics' uses the Employment Cost Index (ECI) to adjust military wage increases. But, according to the MOAA (Military Officers Association of America), the gap between military and private-sector wages accumulated from 1972 to 2010 is at minus 2.4 percent.
Guidelines are used to determine special incentive pay for certain military personnel. Those with specialized skills that are highly sought after in the civilian labor markets such as doctors, aviators, engineers and nuclear power officers, qualify for special pay compensation as do service members exposed to hazardous duties such as parachuting, flight-deck duty and demolition.
Some studies argue that there is an unfair gap in pay among military branches; others like, MOAA compareS the difference between military and private sector wages. In 2003, the Department of Defense and other government agencies introduced the initiative "Forward Compatible Military Pay" to address claims about an outdated and inconsistent military pay system. Moreover, Congress in 2007 and 2008 approved military raises exceeding the ECI.
As history demonstrates, military compensation will continue to be examined, reviewed and debated among policymakers representing a variety of constituencies.
