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Wednesday, October 5, 2011

Military Salaries: Army & Navy

I was reading today that the announced job cuts this past September was triple what the figures were from last year  The reason being according to Bloomberg, "Army’s five-year troop reduction plan, and at Bank of America accounted for almost 70 percent of the announcements."

That got me thinking.. what would the economic consequences be if magically at a snap of a finger, all our military involvements ceased- no Afghanistan, no Iraq, No Libya, etc..  Certainly the overall military expenditure would decrease (or well, one would assume though never a guarantee).  But what about the troops coming home?

According to the Department of Defense's figures from May 2011, there are over 1.4 million American men and women serving within the various branches.  If the US military reduced its total forced by just 20%,  that means 280,000 newly unemployed people to enter the workforce and compete for the few-and-far-inbetween jobs out there.  The official unemployment rate would increase, new benefits would need to be paid out, etc.

Sometimes people forget that the US Military doesn't simply protect the nation and engage in war, but also serves the function of employer particularly of the poor and high-school educated.

So how much do servicemen and women get paid?  I did this chart a few months back:

Here's the breakdown for non-officers:

Pay Scale    Army rank                         Navy rank                 Salary (ave.)
    E1          Recruit (Basic Train.)    Seaman Recruit (Basic)    $15,655/yr
    E2               Private                      Seaman Apprentice         $17,551/yr
    E3           Private 1st Class                    Seaman                  $20,797/yr
    E4         Specialist/Corporal        Petty Officer 3rd Class     $24,813/yr
    E5              Sergeant                  Petty Officer 2nd Class     $26,691/yr
    E6            Staff Sergeant             Petty Officer 1st Class     $30,086/yr

If the military was a 40/hr week job like civilian workforce, the salary per week and per hour of each pay scale would be as follows:

E1 --  $301.06/wk --  $ 7.53/hr    *Minimum wage in US is $7.25/hr
E2 --  $337.52/wk --  $ 8.44/hr    * Salary of McDonalds' cashier
E3 --  $399.94/wk --  $ 9.99/hr
E4 --  $477.17/wk --  $11.93/hr   *Salary of BestBuy "GeekSquad"
E5 --  $513.29/wk --  $12.83/hr
E6 --  $578.58/wk --  $14.46/hr

~ To give some perspective, Alex Rodriguez, All Star baseball player of the New York Yankees earned a salary of $25million dollars for 2011.  It took him less than 2 innings of 1 ball game to earn $34,293 which is more than the yearly salary of someone in the E6 pay scale.  In only 1 inning of 1 ball game, he earned the yearly salary of someone in the E2 pay scale.

$25 million dollars to hit, catch and throw a baseball.

Guess there are worse jobs out there where the salary is completely undeserved-- like Professional Investing/trading.