Do Military Personnel Earn More as Contractors or Civilians?

The question of whether military personnel earn more as contractors or civilians is often a complex one, filled with nuances and varying factors. This article aims to shed light on the financial realities and benefits of both paths, providing insights that will help individuals make informed decisions.

Understanding the Differences: Military vs. Civilian Work

Service members who are on active duty are typically on the clock 24/7, with the exception of authorized leaves. In contrast, most civilians work a standard 40-hour week from 9 to 5, and receive time and a half for overtime. To determine the hourly wage of both, one must account for the different conditions and benefits provided by each sector.

The Pay Dichotomy

For individuals born in Gen Z and beyond, understanding these financial nuances might be challenging. A critical question arises: do people get paid more to work in the U.S. military than they would as civilians? The answer can be subjective, depending on various factors.

Comparing Pay and Benefits: Active Duty vs. Military Contractor

I served 21 years as an active duty Air Force member and an additional 24 years as a military contractor. In my experience, being a contractor often resulted in a higher income and a significant pay raise based on individual performance and AWD mandates (Area Wage Determination). My active duty pay was primarily based on rank, with modest annual increases that averaged less than 1.1 to 2.1 percent. This amount is only about 60 percent of the actual pay, which can include housing and food allowances depending on marital status.

In contrast, as a military contractor, I often experienced pay increases of 3.5 percent, with the best increases reaching up to 10 percent due to delayed AWD adjustments. This fluctuating increase meant that contractors could enjoy a more substantial raise than what was offered in the civilian sector. Even civil service positions can provide a higher income for many, particularly those with less technical skills.

The Bottom Line: Retirement and Social Security

The combination of active duty and military contractor pay resulted in a decent and comfortable retirement, far from the necessity of working at Walmart as a greeter. However, if I had relied solely on military pay for my Social Security or retirement needs, I would be facing challenging financial situations.

Unique Scenarios: Career Paths and Pay Disparities

The relationship between military and civilian pay is not a straightforward apples-to-apples comparison. Some positions in the civilian sector offer better pay, while others do not.

Career Coordination: Opportunities and Limitations

A Certified Nurse Midwife in the Army, for example, saw her civilian practice salary almost double upon resignation, highlighting the potential for more lucrative opportunities in the civilian sector. On the other hand, military positions like tank commanders may not have equivalent civilian employment options.

Additional Considerations: Benefits and Retirement

Service members benefit from additional perks such as meals, rations allowance, on-post housing, or housing allowances, and fully paid medical care for themselves and their families. Moreover, military personnel qualify for retirement after 20 years of service. When all these factors are considered, many military personnel do at least as well as their civilian counterparts.

Some fields that can offer higher pay include those with highly technical skills, such as medical professionals, information systems and technology specialists, and aviation experts. While these fields also offer incentive pay, it might not match the salaries found in Silicon Valley or major airlines.

Conclusion

The decision between military and civilian work depends on a variety of factors, including personal skills, desired location, and lifestyle preferences. Understanding the nuances of military pay, contractor pay, and the unique benefits provided in both sectors can help individuals make well-informed choices that align with their long-term career objectives and financial needs.

Key Takeaways:

Military personnel can earn more as contractors due to higher pay raises and additional benefits. Retirement, healthcare, and housing allowances are significant benefits provided by military service. Civilian sectors offer variable pay opportunities, which can be better or worse than military pay depending on the specific job and field.

Keywords:

military pay, contractor pay, civilian pay, retirement benefits, healthcare