Compensation and Enlisted Manning Shortfalls

One of the biggest issues of concern to military personnel is the military "pay gap". Many are troubled by the possibility that the level of military pay has declined significantly relative to that of civilian wages. A common concern is that a civilian-military wage differential will quickly lead to retention and recruiting problems for the military. Furthermore, many in the Navy believe that the differentials are more prevalent in some ratings than in others-specifically, that the highly technical ratings are having the largest retention and recruiting problems as a result of relatively high civilian pay. Given these concerns, the objective of this study is to examine the correlation between manning shortfalls in various Navy enlisted ratings and the relative earnings of enlisted personnel in these occupations. We also examine differences in military compensation from one rating to another and compare these differentials with those in the civilian sector. In addition, we examine the relationship between military compensation and the propensity to reenlist, using our mew measure of occupation-specific relative military compensation. This analysis yields estimates of the responsiveness of reenlistment rates to changes in relative pay, which can be used to estimate the change in compensation necessary to achieve manning level targets on a rating-by-rating basis.