Veteran earnings are competitive

Military pay with benefits is comparable to its civilian counterpart, and there is no statistical evidence that veterans earn less than non-veterans in civilian life.

The facts

Data shows that military service does not harm one’s earnings or chances for socioeconomic advancement in comparison to the career paths of non-veterans.  The enlistees can potentially use their military training as a substitute for college education, though they will not earn as much as college graduates. The military has taken great strides to increase the pay of soldiers, particularly in recent years. 

Pay depends on the chosen career path after the military (in addition to expertise gained while in the service).  The closer a career relates to military expertise (managing, technology, etc.), the greater the possibility of earning more than if one entered an entirely different job market.  Admittedly, health issues can negatively impact pay, but that is a reality for civilians as well as veterans.  Innate characteristics play a role, but they are difficult to study.

Laying the burden of establishing high post-service salary levels on the military is misguided, though in-service pay should be competitive.  Aid in finding suitable, financially supportive jobs after service must remain a priority.  There are no definitive studies on the matter, since the military does not release very detailed information about the salaries of its veterans, but all available data indicates no significant differences between veterans and non-veterans in earnings.  Even studies that assert the military ultimately harms earnings admit that even possible disparities would dissipate with time (see Krueger).

According to the military, every service member gets 30 days paid vacation annually, many allowances are tax-exempt, members receivediscounts for childcare, vacations, etc.  The services offer up to a $20,000 enlistment bonus.  These benefits are often discounted in studies that compare earnings of civilians and veterans.

Many of the referenced studies by anti-military groups focus on Vietnam Era, pre-All Volunteer Force service, and the circumstances have changed drastically since.  Yet, even from 1980 we have data attesting to relatively comparable pay, even considering innate productivity and discipline of the actors.

The Varieties of Veteran Experience: Peacetime Cold War Military Service and Later Life Attainment – Alair MacLean, University of Wisconsin

• "I examine [veteran’s] occupational status, income, and wealthmeasured when they were in the middle and near the end of their workinglives…I find that they did not benefit from military service as asubstitute for formal education, but rather as a supplement." [Abstract]
• "More educated veterans and veterans who became officers benefited from their service." [Page 1]
• "Enlisted men without pre-service college degrees experienced no effect of their service on the rest of their occupational and economic lives." [Page 2]
• "…The majority of veterans, those who served as enlisted men, did neither better nor worse than non-veterans over the course of their civilian work lives. Military service had a neutral effect on socioeconomic attainment, and therefore did not substitute for additional formal education among these veteran enlisted men."  [Page 34]

• Military pay does need to remain competitive in the future, particularly in comparison to college graduates, but it is not uncompetitive.
• "The all-volunteer force the military has always had to offer a "premium"—pay that is higher than average—to attract the quantity and quality of personnel it needs. The question is how the premium has fallen or risen relative to private-sector opportunities. Thus, the comparison between current pay and career pay allows us to ask whether the value of a military career is falling behind that of alternative private-sector careers, even though the military’s current pay, when compared with that of high school graduates, may seem as competitive as ever."
• Military pay is clearly beholden to market forces; the government has adjusted its levels to remain competitive with the private sector as the economy fluctuates.  "Looking to the future, officers’ military pay will rise faster than civilian pay, causing the negative pay gap to diminish, although a negative gap will remain. Pay for enlisted personnel will also rise. The rise will overcome the decline in military pay during the economic boom and then reach still-higher values."  [See graph below]

• "Enlisted pay growth is steeper than for high school graduates in civilian jobs."

• "…If you are planning to use your recent military background and go to work for a company that supports the military or the government, you are going to be using your military expertise and thus should be able to make at least as much as you made in uniform. Go to work for a company that can’t tap into your direct military experiences, and you may be surprised to learn that you won’t necessarily make as much as you did in the service."

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• "Across veterans of all time periods, races, and ranks, we find a small but positive 3 percent wage advantage among veterans. If the analysis is restricted to enlisted personnel, the average treatment effect is effectively zero. In short, among the population of reservists, active-duty military service on average appears to have little causal impact on subsequent civilian earnings, a year of military service contributing no more or less than a year of civilian experience. This finding dovetails with the conclusion reached by Angrist (1998), although he notes that veterans receive higher earnings than their nonveteran counterparts while in the military, are somewhat more likely to be employed, and increase subsequent investment in schooling." [Page 23]

• Their study analyzes both Vietnam era and recent veteran earnings.   Extensive information can be found in the report. 

• Controlling for factors such as age and education, veterans earn more than non-veterans in the civilian labor force.  This "veteran premium" is as high as 10% when attributed to service in the armed forces.  The study also looks at innate productivity differences among trained veterans, other veterans and non-veterans.  Military training improves civilian productivity.

The Impact of Military Training on Veterans’ Earnings in the Private Sector: Is there Complimentarity Between Military and Private Training for Veterans – Eric McCoy, March 1994

• The results of the study indicate that military training increase private sector earnings of veterans by .18% per week of training.   For nonveterans, the payoff is .14% per week of training.  
• "No complimentarity was found between military and post-service private sector training."  Even accounting for the type of training only decreases the wage effect to .14% – comparable to civilians. 
• "The military has been an important source of training during the all volunteer era that is comparable to that received by nonveterans in the private sector."