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Thomas A. HustedMichael L. Hansen
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The literature focuses mainly on a comparison of an individual's (or family's) income with some minimum level of income-a threshold. Following this practice, we also examine the extent to which enlisted personnel are able to surpass these thresholds. In doing so, however, it is important to emphasize that this threshold is a lower bound on the level of compensation necessary to sustain the AVF. Providing a person with this minimum level of compensation, while necessary, is not suf­ ficient to ensure that the level of military compensation is appropri­ ate. The reason we focus on a minimum threshold for the standard of living of enlisted personnel is to assess whether the current system allows its members to attain at least some minimum standard.

Conventional measures are relatively easy to use and interpret, but some criticize the degree to which these metrics reflect a person's standard of living. Therefore, we focus on different measures of the standard of living of enlisted personnel, to give a detailed sense of the degree to which the military compensation system has been successful in meeting one of its primary goals.

We begin by reviewing common methods, both objective and subjec­tive, used to measure standard of living in the literature. Following this discussion, we use these different concepts to evaluate the stan­dard of living of enlisted personnel.

Our results suggest that relatively few enlisted personnel have incomes below the poverty line. Using basic pay as our measure of military compensation, about 4.5 percent of enlisted personnel earn less than the poverty thresholds. When considering regular military compensation (RMC), a more appropriate measure of compensa­ tion, virtually no personnel are below the poverty line. A comparison of levels of military compensation and the poverty thresholds indi­cates that family size, not the level of compensation per se, determines whether enlisted personnel are in poverty.

When looking at alternative measures of the standard of living of enlisted personnel, the evidence does not overwhelmingly support the notion that the standard of living of military members and their families is low. Although some participate in federal welfare pro­grams, such as Food Stamps and Aid to Families with Dependent Chil­ dren (AFDC), the participation rates are substantially lower than those of the civilian population. In addition, many who do participate are able to do so because qualification standards don't fully account for the value of allowances. And, even though a large number of fam­ ilies report "substantial financial difficulties," our analysis suggests that these difficulties are driven by substantial personal debt rather than low levels of compensation.

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  • Pages: 37
  • Document Number: CRM D0002907.A2 / Final
  • Publication Date: 3/1/2001
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