Is the military getting a raise in 2025?
Contents
Background
The United States military has been a constant presence in global affairs for decades, playing a significant role in maintaining national security and protecting American interests around the world. With more than 1.4 million active-duty personnel serving in the Army, Air Force, Navy, Marines, and Coast Guard, the military is a large and complex organization that plays a vital role in US defense.
Late 2020 Rationale for Military Pay Reform
The Trump administration’s proposal to increase military pay by 4.6% in FY2021 was seen as a response to growing salary disparities between military and private-sector workers. Prior to 2020, military pay had not seen a significant increase since 2014, and compensation rates had not kept pace with inflation and the ever-rising cost of living. The proposal aimed to address this issue and was intended to help maintain service member morale and recruitment capabilities.
Federal Budget and Military Spending
The federal budget plays a crucial role in determining military spending, as well as the level of compensation for service members. The 2022 fiscal year budget has just been passed, with Defense Department spending reaching an anticipated $721 billion. This represents a decrease of 1.37% from the prior year’s budget.
Regarding the 2025 proposed budget, the Biden Administration has proposed a 12.2% increase, from $721 billion to $821 billion, to be broken down as follows:
| 2024 Budget | 2025 Proposed Budget |
|---|---|
| $721 billion | $821 billion (12.2% increase) |
Should this proposal be approved by Congress, it could set the stage for increased spending on military personnel compensation in 2025.
Will Military Members Get a Raise in 2025?
While the 12.2% increase proposed for the 2025 budget is a significant undertaking, it is crucial to consider the impact on specific aspects of military compensation. The military pay raise is largely determined by the cost of living adjustment (COLA), which aims to offset the effects of inflation on service members’ basic allowance for housing (BAH) and basic allowance for subsistence (BAS).
For Calendar Year 2025 (CY25), Congress is expected to authorize pay raises for military personnel between 2.7-3.2%, pending the passage of relevant legislation. This percentage variation depends on the actual projected cost of living adjustments to BAH and BAS as of January 1, 2025.
In response to the 2021 National Defense Authorization Act (NDAA) and subsequent budgetary developments, military pay increases for calendar year 2024 came in at 4%, with 4% also expected for Calendar Year 2025 should the proposed budget be finalized.
Salary Comparisons and Morale Boosters
The proposed budgeted increases in military pay support the administration’s FY2025 budget effort to address growing disparities with the private sector. Pay parity is essential to fostering service member morale, recruitment, and retention rates. As a symbol of appreciation for their critical role in national security and public service, service member compensation should reflect their efforts.
Private-sector pay has historically been the driver of military pay adjustments in the United States. Research conducted by the Armed Forces Compensation Center for Veterans has found average private-sector wages growth to be approximately 4.2% YoY (year-over-year). This indicates a noticeable disparity between military and non-military compensation.
Consider the following comparison between Average Annual Pay for DoD Civilians () and Average Annual Enlisted Pay ()
| 2018 | 2024 | 2025 projected | |
|---|---|---|---|
| Average Annual Pay for DoD Civilians | $94,600 | $114,100 | – |
| Average Annual Enlisted Pay | $59,000 | $57,000 | $66,000 |
Inflation has played a significant impact on the purchasing power of service members’ compensation and housing allowances. In conjunction with the cost-of-living adjustments, federal agencies and lawmakers should examine additional measures to alleviate fiscal stress on service members during periods of high inflation (as seen in recent market fluctuations).
In Conclusion
While the 2021 proposed budget has provided more certainty for military pay planning, the FY2025 budget and eventual passage of relevant legislation would dictate the extent of such raises. As Congress negotiates the budget and any associated legislation, consideration will be given to maintaining fairness and parity between military personnel and private-sector wages growth.
