First Indicator for 2024 Pay Raise Released
Written by Thomas Goering, NCCM USN(RET)
Published: October 28, 2022
Updated: October 28, 2022
Just as last year, only the House of Representatives has passed their version of the National Defense Authorization Act for 2023 (NDAA). The Senate’s version remains on the table as the Senate takes time off for the mid-term elections. The NDAA for 2023 will be a priority when they return. Both versions of the bill support President Biden’s initial budget proposal of a 4.6 percent military pay raise for 2023.
Once the full Senate finishes their bill markup and approves it, both Houses must then reconcile their differences. Once that process is complete, the finalized bill will be forwarded to the President for his signature. Over the years, the National Defense Authorization has been a priority and this year should be no different. Expect the President to be able to approve a finalized bill with enough time for Servicemembers to see the benefits of the raise effective January 1, 2023 (in paycheck of January 15th — delivered January 13th because the 15th is a Sunday).
Basic military pay raises are tied to Title 37 of the United States Code, and based on the section of the law that mandates the raise process, today is vitally important for 2024. For the 2024 raise not to be what today’s release directs, would be an outlier.
Military raises to basic pay for those currently serving are not driven by the Consumer Price Index (CPI) as is increases in pay for retired military and those Veterans who may be receiving disability payments. Military basic pay raises are driven by private sector wage inflation. Two completely different measures. Consumer price changes tend to be more volatile, and is normally compensated for via adjustments in allowances like Basic Allowance for Housing (BAH) or Cost of Living (COLA) payments. For example, it isn’t unheard of to see a locality’s BAH go up and down from one year to the next; you never see basic pay go down. Now, to the main reason for the post…
This morning at 0830 EST, the United States Employment Cost Index (ECI) was released by the United States Bureau of Labor. Per United States Code Title 37, the specific ECI stat used is “wages and salaries, for private industry workers for the period ending September 2022”; this morning’s number is 5.2. So, unless the President decides to propose a different figure in the coming Spring when he delivers his budget proposal, or if Congress decides to write as part of the National Defense Authorization Act of 2024 a different amount, then the statutorily driven pay raise for 2024 will be 5.2 percent. Varying from the ECI figure has happened in the past, but as I mentioned, it would be a relatively rare occurrence.
A 5.2 percent military pay raise for 2024 will be the largest raise since 2002.
Add the 5.2 percent figure to 2023 Basic Pay, and you get what the military pay chart for 2024 would look like. Military basic pay for O-7 through O-10 is limited by the Level II of the Executive Schedule (ES), and basic pay for pay grades O-6 and below is limited to the rate of basic pay for Level V of the ES. Those figures for 2024 will be released separately at a much later date.
The 2024 basic pay charts will be immediately updated if/when the raise percentage changes via either Presidential proposal or Congressional action.
And, now we wait for the President’s next budget release, expected sometime in the Spring of 2023.