Getting Rich In The Submarine Force
(Disclosure: After “seeing the real Navy” during this summer’s NROTC training, our progeny announced a desire to join the submarine force. She’s smart, she’s persistent, and she’ll be good at it. She’s a contender for “command at sea”. I’m happy to support whatever decision she makes, as long as she has enough facts to make an informed decision. And then after she makes that decision, just like me 30 years ago, she’ll have nobody to blame but herself…)
I was recently reminded about a persistent rumor circulating through the NROTC program: “Submarine junior officers earn a six-figure income!!”
Well, not right away, but eventually. They certainly earn it. But before we get into the pay scales of those filthy-rich nukes, maybe a little perspective is in order. I went waaaay back into my storage closet and pulled out my Leave & Earnings Statements. (Yes, I’ve saved over 30 years of pay statements. I’m worried that someday DoD will claim I owe them a refund.) In 1982 I was a brand-new ensign, finally earning the big bucks we’d been fantasizing about during four years of college. I was living in a somewhat gritty part of Alexandria, VA while on temporary duty at the nearby Naval Research Lab. My take-home pay was $1280/month and I remember being quite concerned about shelling out $355/month for a one-bedroom apartment.
I made the following table by taking those 1982 numbers from my LES and adjusting them to 2011 equivalents using this Employment Cost Index calculator and these tables. (It’s reasonably accurate. If you know of a better method of comparing two different pay scales over time then I’d be happy to upgrade.) Finally I looked up the pay scale for this year’s brand-new ensigns, 29 years later:
|Monthly Compensation||1982||ECI-adjusted to 2011 (x 2.87)||2011|
* Basic Allowance for Housing. Actually BAQ+VHA, but for purposes of this post it’s close enough to BAH.
** Basic Allowance for Subsistence. It’s the officer version of a food allowance.
(Note that a military pension is based only on… base pay, which is just 71% of this total. Bonuses and other types of pay are not part of the pension calculation, and neither are allowances for housing or food. The Department of Defense would much rather hand out specialty pays, allowances, and bonuses that don’t count for retirement instead of adding to the base pay tables.)
It’s a relief to see that a 2011 ensign is keeping up with the ECI over the last 29 years.
By 1987 I’d served my obligation and had the option to leave active duty for the Reserves. Coincidentally I had also finished my first sea duty, so my retention decision was going to be tied directly to the quality of my shore-duty orders. The assignment officers were keenly aware of this synchronicity, and part of their retention efforts included an update to the Nuclear Officer Incentive Pay program: a $12K/year bonus for signing a contract of 3-5 years. I could certainly use the money (I wasn’t even remotely near financial independence) so I stayed on active duty.
In 1984, after finishing nuclear training, I had also picked up eligibility for submarine pay. “But wait, there’s more!” By the time I returned to sea duty in 1989, I had over three years of sea duty and was entitled to sea pay. (Retention was still low, so I was worth all of this extra money.) Finally I added in the pay & bonus numbers for today’s six-year lieutenants:
|Monthly Compensation||1989||ECI-adjusted 2011 (x 2.09)||2011|
That NROTC rumor is correct— even without the bonus program, submarine junior officers can earn six figures after just six years of service!
Note that submarine pay hasn’t risen in over 20 years, and sea pay hasn’t done much better. Their actual value today is less than half of what it was only 22 years ago. NOIP has risen considerably to $30K/year, but that was boosted in 2009 due to the submarine force’s truly miserable retention numbers. It’ll probably stay at that level for at least five more years.
BAH seems to have gone up quite a bit again. This may still be due to the inflated real estate values around Navy bases, but in the 1980s (especially in Alexandria) the housing allowance was only intended to cover about 85% of the actual off-base housing costs. Over the last 20 years BAH has been raised to cover 100% of the area’s average housing costs.
An interesting side effect of all these incentives is that base pay in 1989 had dropped to 50% of the total, and in 2011 has shrunk even further to only 48% of the compensation package. In other words, if that 2011 O-3 submariner (with only six years’ service) could retire right now then they’d only receive 50% of $5188.80/month or $2594/month… about $31K/year or less than a quarter of their total active-duty compensation.
The good news is that the submarine officer’s overall pay has kept up with the last 30 years. Perhaps the not-so-good news is that submarine quality of life (and work/life balance) hasn’t changed substantially in 30 years, either. But that’s just my opinion.
You submariners are chuckling ruefully and shaking your heads at the reasons behind these numbers. Even if you’re not a submariner, you more experienced service members are already asking the question: “Why are they being so nice to the submariners?” The answer: judging from the retention statistics, money seems to be the only way that the Navy can make up for the submariner’s quality of life… or lack thereof. I don’t have 30 years of retention statistics at hand, and I don’t think the Navy wants those numbers to be publicized, but I suspect that they’d validate my opinion on submarine quality of life.
Luckily my daughter will have two more summers of NROTC training aboard ships & submarines to ask more questions and to help her make her choice. (Feel free to offer additional info in the comments!)
Most of all, it’ll be interesting to see what the submarine lieutenant in her NROTC unit decides to do when his tour is finished. He’ll be eligible to either leave active duty or to start picking up his own six-figure paychecks. If he shares his thoughts with the midshipmen about his own retention decision, he could help them avoid the “What if I miss this $$$ chance?” thinking which might make them feel compelled to go submarines.
Of course it’s good to have a job, let alone to assess these difficult choices. But it’s even better to be able to contemplate them when you’re financially independent!
Sea story: Looking for an Engineer in all the wrong places
Sea story: “Hang on!!”
Sea story: “Secure blowing sanitaries!!!”
Sea story: “Battle Stations Missile”
Saving base pay and promotion raises
Where to put your savings while you’re in the military
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