Research for Formals

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.

Early in FY00, the U.S. Army asked each of the other services to consider joining it in proposing, through the Unified Legislative and Budgeting (ULB) process, legislation that would change the military's personnel target from an end-strength goal to a goal based on average strength, calculated across the fiscal year. The Deputy Chief of Naval Operations, Manpower and Personnel (N1) asked CNA to evaluate the average-strength scheme to help the U.S. Navy formulate its response to the Army. We provided the N1 staff an earlier draft of this report that raised concerns about the scheme (as this final version of the report continues to do). The Navy shared the draft report with the Army, which decided not to continue pursuing the proposal.

In June 1999, the Navy's Five Year Development Plan included roughly 80,000 civilian positions as part of its "competitive sourcing initiative." As a result of competitive sourcing, half or more of the positions involved with commercial activities (Navy activities that are similar to activities in industry) could be removed from the civil service roles either because of outsourcing or internal efficiencies. Because the competitions were planned for the most part, as isolated actions, the broader consequences of these competitions for the overall civil service workforce were not fully understood. For this reason, the Assistant Deputy Chief of Naval Operations (N1B) asked CNA to develop some guidelines that would help decision-makers plan for the consequences of the Navy's competitive sourcing initiative. Specifically, the request was to (a) establish a baseline of the current and past civil service workforce, and project changes that could result from the competitive sourcing initiative; (b) benchmark the Navy system and its

The Navy Surgeon General has asked CNA to evaluate physicians' job satisfaction and retention within the existing climate to determine if major issues exist. The scope of the study was expanded to include a comparative analysis of compensation for Navy physicians continuing a military career versus leaving for a private-sector track. We find that a substantial current compensation gap exists between military and private-sector physicians, particularly at the end of the 7-year career point, and the disparity in total compensation varies widely by medical specialty. Our finds show, however, that as Navy physicians accrue more military service, it becomes more lucrative for them to complete 20 years, retire, and then pursue a private career. This information memorandum documents the results of these compensation comparisons.