This research brief describes work documented in Military Pay Gaps and Caps (MR-368-P&R).

Excerpt: In spring 1993, the Clinton Administration proposed a series of caps on military pay increases as part of its overall effort to reduce defense expenditures. These caps would reduce the rate of growth in military pay relative to that of civilian pay by 9 percent from 1994 to 1997. This reduction would come on top of an almost 12 percent gap in wage growth that developed between 1982 and 1992, according to the Employment Cost Index (ECI) — the index currently used in setting military pay increases. Paradoxically, this 12 percent gap was not accompanied by recruiting or retention problems even though it was greater than the wage gap of the late 1970s — a period known for recruiting and retention problems.

This research brief describes work done in the National Defense Research Institute.

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