US military members' wage growth has outpaced American average

By Personal FinanceFOXBusiness

Why the new defense bill is crucial to the military

Gen. Jack Keane (Ret.) discusses the importance of the 2019 military authorization funding bill, which will provide $717 billion to the military.

While many middle-class Americans have been frustrated by stagnant wage growth for years, one sector of the population has had a different experience where salary growth is concerned: active-duty military members.

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Over the past 18 years, pay increases among active-duty military members rose meaningfully faster than those enjoyed by civilians, according to a new analysis by The Brookings Institution. In 2000, a midlevel soldier made 10 percent less than the average American – but just 11 years later, the same soldier was making 10 percent more, without including benefits.

As of 2016, a midlevel military member was earning base pay around $31,745, compared with $30,533 for a non-military employee. In 2000 those compensation rates were $18,905 and $20,957, respectively, according to the analysis, which named the military “one of the last bastions of middle-class social mobility.”

One likely contributor to the trend is the fact that while American civilians were undergoing a financial crisis in 2008, the military was engaged in conflicts in both Iraq and Afghanistan.

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President Trump’s spending bill for 2019 calls for a 2.6 percent rise in military pay – the largest increase in a decade. He has also called for a freeze on federal workers’ salaries.

Military members also have access to one of the best pension plans, with benefits that begin upon the day of retirement, regardless of age. After 20 years of service, members receive a pension equal to between 40 percent and 50 percent of their last paycheck.

Recent economic indicators show signs that pay stubs for the average American worker are beginning to rise again, too. In October, wages climbed 3.1 percent year-over-year, which was the biggest jump since 2009. Economists predict that number could be similar, or potentially larger, in the November reading.