The genesis of this thread is the “federal civilian pay vs. private industry pay” discussion being had elsewhere. Admittedly, the military has very different demands than the civilian life, be it government or private. Nonetheless, here’s my view on the military and their pay.
As most of you know, I spent five years in the Marines, most of it in San Antonio, working in a joint-service environment. (That is–I worked closely with the Army, Navy, and Air Force as well.) I spent another five years in San Antonio after I got out. So I base this not-entirely-hypothetical example on what I saw there.
In San Antonio, an E-5 with 4+ years of service with no dependents makes about $54,000 per year. This includes base pay, housing allowance, food allowance, and the tax difference. (Food and housing allowances are not taxed, so you add a “tax difference” to equate it to “normal” pay.) A first-year accountant at a Big-4 firm can expect about the same pay.
It’s very possible (the norm, in fact) to make E-5 around the four-year mark. I knew a great many people who were in their first enlistment that made E-5. And believe it or not–you can make E-5 in any branch of the military just by doing the absolute bare minimum. Just for simplicity, let’s pretend he’s been in for five years.
The 23 year-old accountant has already spent four years in undergrad, another year in his Master’s program, and is currently studying for the CPA exam. He has been without a paycheck for five years, spent about 4,000 hours in class/studying, and still has another 300-ish to go for the CPA exam. His education has probably cost him between $20k and $200k, just in tuition, fees, and books, depending on where he went to school. (This doesn’t include room and board.) He might have up to $50,000 in student loan debt. That’s a $400/month payment every month for the next 30 years. But that’s okay–he’s got a BBA, MPA, and soon, the CPA designation to put behind his name.
The vast majority of military enlisted graduated from high school on Friday and shipped off to boot camp within just a few weeks. Most of them never went to college (beyond what was required and provided by the military), never paid a dime in tuition, and owed zero dollars on their student loans. They spent zero time in a classroom, unless it was required and provided by the military, and they were paid their normal salary to go to class. They have no degree and no professional certifications. (Yet they make the same amount of money as the person who has worked their butt off for five years.)
The accountant has medical insurance that is paid for by his work. (If he’s lucky, that is.) He has a $25 copay every time he goes to the doctor, a $3,000 deductible, 20% coinsurance beyond the deductible, and a maximum $5,000 out-of-pocket expense every year. His prescriptions cost ~$10 to $50, depending on what he’s getting. And if he gets sick, he gets no pay (unless he uses his disability insurance, which he probably pays for out of pocket).
Military people pay ZERO for doctor’s visits. When I say ZERO, I mean ZERO. No copay. No coinsurance. No deductible. No prescription payments. No nothing. And if you’re off work for a month or two or three (for whatever reason–even if it’s not work related), you continue to receive your normal paycheck and allowances.
The accountant probably doesn’t have a defined-benefit pension plan. He might have a 401k (that he paid into). And he has social security (for what that’s worth). He can start taking withdrawals from the 401k at age 60, and can start taking social security at age 65.
Military people also have their pension to look forward to. Granted, not everybody stays in and retires, but those who do put in 20 years can expect to get half a paycheck every month for the rest of their life. Granted, it’s only half of your base pay, not including allowances. But the thought of being 38 years old, doing absolutely nothing and collecting a $2,000 check every month is pretty appealing. (Especially considering that you didn’t have to pay into it.)